U.S. Future Inflation Gauge Tumbles to 81-Month Low

Underlying inflationary pressures plunged further in October, according to the U.S. Future Inflation Gauge (USFIG) published by Economic Cycle Research Institute (ECRI). The value of ECRI's USFIG lies in its ability to measure underlying inflationary pressures and thereby predict turning points in the U.S. inflation cycle.

The USFIG dived to 95.5 (1992=100) in October from 103.5 in September, while its smoothed annualized growth rate plummeted to -28.1% from -18.2%. The gauge was pulled down in October by disinflationary moves in all available components.

Lakshman Achuthan of ECRI states:

With the USFIG plunging to its lowest reading in nearly seven years, U.S. inflation pressures are being eviscerated.

Disclosure: none

Comments

[investor88:]

After inflation, is it deflation before hyperinflation? Look forward to postings on inflation, deflation and hyperinflation!

2008 Nov 09 08:26 AM

[patio:]

These definitions are too simplistic, but its a start.
Inflation is too much money chasing too few goods. Deflation is too little money chasing too much supply.
Clearly the American consumer, and much of the rest of the world, is tapped out. In debt, more and more unemployed, wages shrinking, and most importantly, we get it, No more consuming, a seacahnge in attitude.
Even those who want to borrow more, can't, the rules have changed, no more easy credit.
I f ther e is another stimulus package, in whatever form, I think people will save it or pay down debt, IMO. I will need to have it explained to me how the printing presses re-inflate, if the money doesn't get into the hands of the populus, and to be spent not saved ( the banks are "saving" also, not lending ), how does demand increase and prices reverse??
I hope someone can explain this to me, so we can watch for the action and act accordingly.
Oh, and what vehicles to ride, with any cash that is now in savings.
Thanks.

2008 Nov 09 09:23 AM

[ussmls7:]

Untill these over paid folks that put out this False Data,are toss out on thier asses because False Data does nothing to help stop the Train Wreaks coming at the American Public.True Facts,will make people realize we are in serious trouble and if we continue to do the same damn thing,it will only get harder to try to recover the Losses Americans Suffered at the Hands of Big Banks & the Illumuni that Gamed the World with the Toxic,Worthless Crap they Created like SIVs,CDOs,OCDs,ie Suckers Time Bonbs! If these people that give out the inflation/deflation data,PAY,depended on it being correct,they would be Broke & Homeless! Its time to rid this Nation of the lieing Bastards that Control the Money & Black Mail Congress to go Along with the Special Interest & Lobbyest that Write the Bills Passed into Law,Like they Did on a Cold Winter Night in 1933,When most of Congress Where Gone on Winter Vacation,with out the Means to Return like they can today. It was a Sad Time in our History,When Our Law Makers Let Bankers Author & Write the Bills that Give them Total Control of This Nations Money. We are seeing the Results of it Today! As the dollar gives false hope to many,it will shoot higher,only to fall like a Rock as many already know & are Protecting their Wealth,while the Clueless Mass of Americans will be Hit Hard. History is often written to paint over the truth,to make it more Rose Colored to the Masses,but this time those that studied the Great Depression & think they have full Control, & will not have to pay the piper, have another thing coming! Data that Lies to Gain Trust from the Masses,Will Back Fire on those that Push those Lies!

2008 Nov 09 12:14 PM

[CLH:]

Another good article showing that we are in deflation and not inflation. Gold? I think not.

2008 Nov 09 09:26 PM

[NOWHEREMAN:]

You are absolutely correct, CLH. But don't let georealist in on that fact. It can't possibly be true because he expects $1000 gold by spring.

2008 Nov 10 11:20 AM

[Jason Rines...:]

"After inflation, is it deflation before hyperinflation? Look forward to postings on inflation, deflation and hyperinflation!"

Just pick some forecast dates in years or quarters.
Inflation peak = 2008 and over
Deflation = Q3&Q4 2008 - 2009
Hyperinflation 2010-2011

Geopolitics and energy is a real wild card at this point. My belief is that we'll see Netanyahu reelected in Israel but a surprise will be that there is a peace deal that lasts 3-4 years until some larger hostilities break out. My guesses/assumptions.

2008 Nov 10 12:43 PM

[Smarty_Pants:]

I always thought inflation was a loss of value in the dollar due to excessive printing of same.

Given the abandon with which the FED is printing lately, I'd say that inflation is coming our way in the not too distant future.

The FED's adjusted monetary base has increase nearly 44% in the last two months. If that's not sowing the seeds of future inflation I don't know what it would take.

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2008 Nov 10 12:52 PM

[Smarty_Pants:]

Since SeekingAlpha won't handle long urls, try this one:

research.stlouisfed.or...

2008 Nov 10 12:53 PM

[Mr. Boater:]

How can things get better when people like Robert Rubin, Summers, and Geithner are still playing and now attached to the new administration.
They caused this mess! They lobbied for the repeal of the Glass-Steagall Act and then created the derivative mess aided by the support of fellow "secret society" member Alan Greenspan.
One thing even Greenspan knew is that Gold will outperform in "times of extremis." That means hyper inflation and/or deflation. Real Estate crash 2 begins in May of 2009 andruns till Dec 2012. $1.1 trillion more of interest only, option, and liar loans will reset and the failure rate will be twice as large as the 615 billion in subprime that started this mess. How can we make a decentliving and have descent investments when the greedy wealthy elite own the Government??

2008 Nov 10 01:07 PM

[The Count:]

i am usually a contrarian when it comes to prophecies... and EVERBODY (CNBC,GS & Co) are saying deflation deflation deflation and inflation is nowhere in sight. well, my gut feeling is telling my the deflation part is just about over.. maybe a couple more months at best, and then its whoopass for the greenback and highooo silver for commodiites....

analogy= first you exhale before taking a reallllllllly big breath

2008 Nov 10 09:00 PM

[NOWHEREMAN:]

Some Insider buying has started in CDE on the open market, it has been many years since this has occurred.

Caveat, could be that whatever stock options they have are exercisable at prices higher than present levels. I would love to see a 1 for 10 reverse split to maintain its Nyse listing and allow future earnings to be relevant again.

2008 Nov 11 12:16 AM