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Inflation Monitor – April 2015

Inflation Monitor / By Kirk Chisholm / 05/01/2015

Inflation Monitor Summary – Composite Ranking

* The Inflation Equilibrium is a quick summary for the whole data series of the inflation monitor. If you don’t like statistics, this is the chart for you.

Inflation Monitor – April 2015 – Introduction

Spring is finally here and with it comes the warm weather. Unfortunately the warm weather has not been able to thaw out deflation or the wintery economic chill that has gripped certain parts of the US economy and many European nations.

The CPI continues to hit negative territory on an annual basis for the second month in a row. The PPI is well into negative territory as well. This does not bode well for the US economy.

Commodity prices have also continued to show weakness. The bright spot in the US economy is housing which has been climbing for the past few months and started to pick up its pace.

There are many excuses that have been proposed for these numbers: the heavy snowfall in the North East this past winter, the significant drop in oil prices, the rising US Dollar, and more. These are all valid reasons for the drop in the CPI, PPI, and other economic data. However what I find amusing is the commentators who claim the high oil prices were a good thing for the economy, now say that low oil prices are good for the economy… Well which is it?

The stock market is not the economy” – Author Unknown

This axiom is more important than any you will learn about the stock market. What it means is that the economy does not always lead or follow the actions of the stock market. While they are obviously related, they are not the same.

The US stock market is currently holding up well considering the negative economic data. While the two are highly correlated, they do not always act in unison. However I do expect the stock market to follow the economic trends in the second half of this year unless we see a sharp reversal in trend of the US Dollar and Oil.

In this months Inflation Monitor I have some very interested charts to share with you. Enjoy.

As always, please contact me to send your feedback on how I can make this monthly Inflation Monitor a better tool and resource for you. Thank you for reading and I hope you enjoy this month’s issue – Inflation Monitor – April 2015.

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Kirk Chisholm

Inflation Monitor – March 2015

Inflation Monitor / By Kirk Chisholm / 03/23/2015

Inflation Deflation Composite Ranking

* The Inflation Equilibrium is a quick summary for the whole data series of the inflation monitor. If you don’t like statistics, this is the chart for you.

Inflation Monitor – March 2015 – Introduction

It is March and as of today spring is finally here. It doesn’t feel like spring. I only hope that the weather warms up so I don;t have to wear a winter parka in April.

Boston finally broke the record for snowfall this year with 108.6 Inches. The prior record was 107.9 inches in 1872. This broken record was no reason to celebrate since the Governor had to call in the National Guard to help with the snow. Having experienced prior large snow storms in the City of Boston, I can tell you that the situation this year was mismanaged. There was no reason to call in the national guard.

Boston’s lack of preparedness is much like the financial markets with deflation. Deflation has caught a lot of people off guard. A number of European countries currently have negative interest rates, Germany and Switzerland rates are negative out to 6 and 10 years. What the future holds with negative interest rates is anyone’s guess, but the idea of negative interest rates is a dangerous one if the trend continues lower.

Is the US stock market safe from global deflation?

The S&P 500 and US Treasuries are an anomaly in the global equity and bond markets. The US Treasury has the highest interest rate compared to any other developed country. The S&P 500 continues to rise despite the global deflation effecting countries and equity prices around the world.

Inflation Monitor – February 2015

Inflation Monitor / By Kirk Chisholm / 02/14/2015

Inflation Monitor – February 2015 – Introduction

It is now February and it is off to a good start with the New England Patriot winning the Super Bowl… Sorry the big game. Even if you were not a fan, it was a great game to watch up until the last play. The win helped warm the city from the cold chill of deflation setting in around the US. It has been a few months since I have started the Inflation Monitor and each of those months has been marked with deflation. I have been saying for the past few years that deflation is in our future despite all the money printing by the Federal Reserve. It appears as if this is now become apparent to everyone else. Although there are many deflation deniers out there who think it cannot happen and wont happen.

I just got back from the TD Ameritrade conference in San Diego. One of the keynote speakers was Craig Alexander, the Chief Economist at TD Bank. Normally this is one of my favorite speakers at the conference each year, however this time I noticed something different…

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