A Quote by Stephen Moore
The best measure of inflation is what is happening with commodity prices.
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If global oil prices or commodity prices are high, then it is bound to create inflation. So, we should not be too worried if the inflation is created by global commodity prices. When they come down, inflation will automatically come down.
There is no such thing as agflation. Rising commodity prices, or increases in any prices, do not cause inflation. Inflation is what causes prices to rise. Of course, in market economies, prices for individual goods and services rise and fall based on changes in supply and demand, but it is only through inflation that prices rise in aggregate.
What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation.
Models used to describe and predict inflation commonly distinguish between changes in food and energy prices - which enter into total inflation - and movements in the prices of other goods and services - that is, core inflation.
Because food and energy prices are volatile, it is often helpful to look at inflation excluding those two categories - known as core inflation - which is typically a better indicator of future overall inflation than recent readings of headline inflation.
When they say inflation is bad, deflation is good, what they mean is, more money for us 1% is good; we're all for asset price inflation, we're all for housing prices going up, and we're all for our stock and bonds prices going up. We're just against you workers getting more income.
A commodity doesn't have the same characteristics as a security, characteristics that allow for analysis. Other than a recent sale or appreciation due to inflation, analyzing the current or future worth of a commodity is nearly impossible.
No politician can praise unemployment or inflation, and there is no way of combining high employment with stable prices that does not involve some control of income and prices. Otherwise the struggle for more consumption and more income to sustain it-a struggle that modern corporations, modern unions and modern democracy all facilitate and encourage-will drive up prices. Only heavy unemployment will then temper this upward thrust. Not many wish to confront the truth that the modern economy gives a choice only between inflation, unemployment, or controls.
Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they're likely to increase prices, since they've learned that if they don't, and inflation hits, their businesses will be wrecked.
The idea that when people see prices falling they will stop buying those cheaper goods or cheaper food does not make much sense. And aiming for 2 percent inflation every year means that after a decade prices are more than 25 percent higher and the price level doubles every generation. That is not price stability, yet they call it price stability. I just do not understand central banks wanting a little inflation.
The best taxes are such as are levied upon consumptions, especially those of luxury; because such taxes are least felt by the people. They seem, in some measure, voluntary; since a man may choose how far he will use the commodity: They naturally produce sobriety and frugality, if judiciously imposed: And being confounded with the natural price of the commodity, they are scarcely perceived by the consumers. Their only disadvantage is that they are expensive in the levying.
To measure prices by a currency that is called by the same names as gold, but that is really inferior in value to gold, and then - because those prices are nominally higher than gold prices - to say that they are inflated, relatively to gold, is a perfect absurdity.
Government policies try to prevent the emergence of serious unemployment by credit expansion, i.e., inflation. The outcome was rising prices, renewed demands for higher wages and reiterated credit expansion; in short, protracted inflation.
If commodity prices are no longer going up then food prices in the grocery store will no longer go up, at some point.
Just being able to trade financial commodities is a serious limitation because financial commodities represent only a tiny fraction of the reality of the real commodity exposure picture. We need to be active in the underlying physical commodity markets in order to understand and make prices.
The good thing about the dividend-paying stocks is, first of all you have stocks, which are real assets if we have some inflation. I think we're going to have 2%, 3% maybe 4%. That's a sweet spot for stocks. Corporations do well with that. It gives them pricing power. Their assets move up with prices. I'm not fearful of that inflation.
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