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Atle Willems, CFA
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Atle Willems, CFA, is an equity investor with a long-term view investing in undervalued listed shares with solid operational track records and sensible balance sheets. He holds a master's degree in finance from Nottingham University Business School, a bachelor's degree in business... More
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EcPoFi - Economics, Politics, Finance
  • The Chart Warning Of A Potential Surge In U.S. CPI 0 comments
    Feb 3, 2013 10:37 AM

    Robert C. B. Miller wrote, in an article named "The Austrians and the Crisis", in the September 2009 issue of Economic Affairs, p. 33 (subscription only),

    The current danger is the combination of monetary expansion (so-called 'quantitative easing') and massive long-running budget deficits will result in both a (temporary)'recovery' and a surge of inflation.

    This statement referred to the U.S. and the UK economies and since writing the article (in 2009) there have been further QEs taking place and continued deficit spending in both countries which are not apparently expected to end any time soon, especially for the U.S. Here is what the above mentioned situation looks like at the end of 2012 for the U.S. And it does not bode well for future consumer price inflation if his assessment proves correct.

    (click to enlarge)

    Of course, based on official U.S. CPI data, we are still waiting for this "surge" more than three years on since he wrote the article. But, the effects of money printing and deficit spending, on a scale never seen before in U.S. history, are yet to be played out in full. Time will show, but at least you've been warned.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Macro View
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