On the other hand we could just be honest and acknowledge that this is STILL the longest cycle in U.S. history now running on record stimulus.
"The ISM survey's measure of prices paid by manufacturers rose last month to the highest reading since July 2008, when the economy was in the midst of the Great Recession. That bolsters expectations for higher inflation this year"
"The ISM survey's measure of prices paid by manufacturers rose last month to the highest reading since July 2008, when the economy was in the midst of the Great Recession. That bolsters expectations for higher inflation this year"
Of course July 2008 was the end of the cycle. Back then economists expected inflation to worsen but when the Great Crash of 2008 took place, the exact opposite occurred.
First off, as I pointed out on Twitter, the reason there is so much "inflation" hysteria is because the middle class has been obliterated and therefore small price increases have outsized impact on household budgets. It's a poverty trap in which wages can never rise because inflation hawks immediately call for higher interest rates to quash the recovery. They have a well brainwashed populace taught to believe that prices at Walmart can only go down, never up. The virtuous circle of rising wages and rising output/productivity that created the middle class in the first place cannot exist under this current paradigm. Likewise, amid record debt, small increases in interest rates have outsized impact on credit markets. In other words, this is a Mr. Creosote economy. Always only a wafer thin mint away from exploding.
Due to the year over year "base effects" of comparing a re-opening economy to a locked down economy, all of the various metrics economists use are skyrocketing. Unlike anything we've seen in modern history. This is all due to year over year comparisons against a zero baseline.
If we look at more absolute indicators, we quickly realize that this "recovery" is by far the weakest in U.S. history. Which portends badly for what is coming on the other side of asset super crash.
First off, looking at the ten year Treasury yield, what used to be the floor for interest rates, is now deemed to be the ceiling. According to today's inflation hawks a 2% bond yield would be the end of the world.
If we look at air travel (passenger miles) as a proxy for tourism and business travel, here is what we see:
This is through January, nevertheless the increase is nominal:
If we look at vehicle miles as a proxy for people commuting to work and/or taking vacations, we see they are at a twenty year low as a 12 month moving average.
This data is through February:
No surprise, crude oil is languishing amid demand still at an eight year low. This is the third echo bubble since 2008.
Crude oil demand is from mid-April:
Here we see the big "housing boom":
Housing starts are fractionally above pre-pandemic levels:
Housing starts are from March:
And if we look globally, we see that the Baltic Dry Index which is a measure of shipping costs, is a pale shadow of its 2008 levels.
Bear in mind, this is all the good news, imagine what happens when the asset bubble crashes.
BDI is updated weekly:
