Chart of the day – US inflation since 1913

With all the talk about deflation today it’s like we’re being fooled into thinking that we have no inflation. The truth is that you can have inflationary and deflationary forces in play simultaneously in an economy, which is exactly what’s happening now.

As a reminder of inflation I dug out this chart from inflation.com showcasing the extreme take-off of inflation since President Nixon’s New Economy in 1970. The explosion of debt since economies were lifted from the peg to gold is understandable, but how long can it continue? When are we going to pinch ourselves and wake up to reality?

Paying the interest off existing debt by issuing more debt is an accepted Central bank policy. And of course the public is to blame for not consuming and spending enough to support these policies. The moral obligation to one day pay off your debt has eroded as quickly as we have forgotten about why the world looks the way it does today.

This is why this chart is important to remember.

Cumulative_Inflation_by_Decade

Read the entire article titled Cumulative Inflation by Decade Since 1913 by following this link

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