The Fed's Nonchalance Is Scary

So the Case-Shiller index is out today and it looks like housing prices are way up.  Scott Grannis has a handy-dandy chart as well as a warning that housing prices, via "circuitous route," filter into CPI (inflation).



It is also worth noting that gas prices are up significantly this year.  Housing, fuel ...what else that people don't have any need for is getting more expensive?  That's right, food!

Housing, fuel and food all getting more expensive, but the Fed doesn't see any inflation, in fact they see the opposite.  An on that score, I wish I had thought of this to say...

“We occasionally worry about asteroids hitting the earth, or a major solar storm that could bring down the power grid for a long period of time and result in the deaths of millions of people,” according to the letter. “Either scenario is more likely to happen than the deflation that evidently keeps the world’s central bankers up nights.”