Inflation, Overt and Covert, Rages

One of the curiousest (no that's not a word, I'm feeling kinda malapropy) debates on the economic/financial scene these days is how the Fed and accomplished geniuses like the Ben S. Bernanke are working overtime because they see deflation as a significant threat, yet many others see inflation, either in the offing, mildly with us now or in fact raging like a tornado. As for me, I know all the textbook economic mumbo-jumbo and I have my opinions, but I always defer to what I see with my own lyin' eyes. I buy alot of milk. Looking at milk, it's a "yup" on inflation. I just finished a 1,600 mile round-trip family vacation road trip (where ironically I drove on the Ben Bernanke Interchange). Obviously gas is a big "yup". Got a little one? Diapers are a "yup" (potty train, potty train, potty train!!! I recommend hosing them down post diaper removal, trust me, they'll get on that potty before too long). I could go on, but a more subtle form of inflation that you don't see if you are not paying close attention is the gyppiness and/or crappifying that is going on with goods and services. Getting less, in quality and/or quantity, for the same old price is every bit as inflationary as nominally rising prices, and it is rampant. As an example, the Baseball tykes love a good outing to the California Pizza Kitchen and mom and dad don't mind it either as the food is pretty tasty for the price. So we hit the CPK often and for the last few times, inherent inflation in the crappifying of the food has been glaring. Nobody can convince me that the bean counters at CPK HQ haven't sent out highly calibrated instructions on how to lower food costs by marginally skimping on ingredients (literally "bean counters" as my last Chipolte Chicken pizza had almost a laughably reduced number of black beans on top along with a proportionate reduction in almost everything else). We know that the foodservice industry is struggling with rising input costs. The first line of defense on holding price points is always the "gyp" or the "crappify" maneuver, so I've been on the lookout. I have many data points on this one...it's happening big time and has been for six months to a year. Sorry to tell you folks but nominal prices are next. So many of the visible things that we buy that have heretofore held constant in nominal dollars are going to break the dam soon and the flood of inflationary data will be undeniable as will the flood of inflationary angst as Jeff Lord notes in the linked post. And as Lord explains, Dear Leader will get the blame. He's not the guilty party on this one (most people have no clue who or what the Ben Bernanke is anyway) but so what. Not that there isn't some cosmic justice in Dear Leader taking in on the chin for things mostly out of his control, there is plenty within his control that he's screwed up anyway, no sense cutting too fine.

...and what is a NBfPB post without a good "You Heard It Here First"...

UPDATE: And here is a little color...