{"id":10558,"date":"2009-12-15T11:22:57","date_gmt":"2009-12-15T18:22:57","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=10558"},"modified":"2009-12-15T11:22:57","modified_gmt":"2009-12-15T18:22:57","slug":"manufacturing-inflation-how-art-laffer-got-it-wrong","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10558\/manufacturing-inflation-how-art-laffer-got-it-wrong\/","title":{"rendered":"Manufacturing Inflation (How Art Laffer Got It Wrong)"},"content":{"rendered":"

If you’ve wondered where that inflation was<\/a>, you might start seeing signs of it today.\u00a0 Economic data released today are a great example of why inflation is a monetary consequence and not an economic one:<\/p>\n

New York metro manufacturing activity slowed WAY less than expected<\/a>:<\/p>\n

\n

Factories in the New York region unexpectedly expanded at the slowest pace in five months in December, indicating manufacturing may provide less of a thrust for the economy in coming months.<\/p>\n<\/blockquote>\n

Wholesale prices<\/a> jumped WAY more than expected:<\/p>\n

The 1.8 percent increase in prices paid to factories, farmers and other producers was more than twice as large as anticipated and followed a 0.3 percent gain in October, according to Labor Department data released today in Washington. Excluding food and fuel, so-called core prices also exceeded the median estimate of economists surveyed by Bloomberg News.<\/p><\/blockquote>\n

Industrial production rose a tad<\/a>, mostly from exports which may be a consequence of a weaker dollar :<\/p>\n

Manufacturers are benefiting from rising demand overseas as the global economy recovers from the worst slump since World War II. A 12 percent drop in the value of the dollar from a four- year high on March 3 against its major trading partners is making American goods more competitive. Exports have risen for six consecutive months since reaching a three-year low in April.<\/p><\/blockquote>\n

What’s this all mean? <\/strong> It could very well mean that all this cheap money is starting to work its way into the economy…from the producers’ side.\u00a0 If those producers can’t pass along the higher prices to the consumer, because of a paradigm shift in consumer demand, we’re going to see a lot more business failures.\u00a0 That could lead to higher unemployment.<\/p>\n

OR…it could mean something much worse;<\/strong> it could mean the feared currency collapse is underway<\/a>.<\/p>\n

Art Laffer once suggested that America’s “great export is our monetary policy<\/a>” (VIDEO).\u00a0 Since that utterance to Peter Schiff<\/a>,\u00a0\u00a0 Laffer’s written a book<\/a> admonishing the Government for the very strategy he endorsed. \u00a0 Laffer’s lost credibility aside, it is instructional to note that we, as a Nation, have become overly reliant on foreign capital.\u00a0 It looks like that party could be over.\u00a0 If Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

If you’ve wondered where that inflation was, you might start seeing signs of it today.\u00a0 Economic data released today are a great example of why inflation is a monetary consequence and not an economic one: New York metro manufacturing activity slowed WAY less than expected: Factories in the New York region unexpectedly expanded at the […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,5],"tags":[],"class_list":{"0":"post-10558","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2529,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2529\/amaze-your-friends-why-the-surprise-fed-funds-rate-drop-isnt-impacting-mortgage-rates\/","url_meta":{"origin":10558,"position":0},"title":"Amaze Your Friends : Why The “Surprise” Fed Funds Rate Drop Isn’t Impacting Mortgage Rates","author":"Dan Green","date":"January 22, 2008","format":false,"excerpt":"Advanced Fiscal Literacy For Real Estate Professionals The Fed Funds Rate is a fair proxy for economic health.\u00a0 When the economy is growing, the FFR\u00a0rises to fight inflation. 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