You Have To Admit, The Prospects For Defeating Deflation Do Not Look Very Good

Earlier we mentioned how there will be a lot of focus on core CPI on Wednesday, to see if Bernanke’s aggressive monetary action can finally create a little inflation.

It might, but you have to admit when looking at a really long-chart of core inflation, the trend is certainly not on our side. Deflation has been ruling since the inflation of the early 80s, with only brief breaks. Of course, this is a virtually identical chart to Treasury yields, which suggest that the bond bulls, though suffering at the moment, will probably get the last laugh.

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