News. The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.2 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.0 percent before seasonal adjustment.
My point. The gurus were predicting soaring inflation and sharply higher bond yields because of government deficits.
I have always maintained that large government deficits reduce our purchasing power because we have to pay the interest to the bond holders who are financing the deficit.
There is a huge transfer of wealth from us to them. We just cannot afford buying what we used to. Prices have to come down.
Deflation is the issue. Not inflation.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest
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