PPI Hits 27-Year High

In July the Producer Price Index went up 1.2% (over a 15% annualized rate), and yr/yr it had risen 9.8%, the biggest annual rise since 1981. Details (and scary graph) here.

So Dr. North, when is that deflation kicking in? If I understand your position, we should expect massive inflation in the future, when Bernanke lets it all hang out. But right now we're supposed to be experiencing falling prices, I thought...


  1. Well, that's no big deal, because short-term government bonds over that same month yielded 15% on an annualized basis.

    Oh, wait, that was in the fantasy world where interest rates actually cover inflation, and you *don't* become poorer by saving. (No, this isn't a subtle criticism of something you said 12 years ago, just something Bryan Caplan said 12 days ago.)


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