“Textbook Stagflation”

Poor economic numbers continue to rattle Americans.
Today the May consumer price index was up .2% with the the index for all items less food and energy increasing .3% in May. This is the largest increase since July 2008. Year over year this amounts to a rise of 3.6%.
In other words, inflation is on the march. The government says “the food at home index repeated its April increase of up .5% as four of the six major grocery store food group indexes increased, with the index for meats, poultry, fish and eggs rising the most.”
Combine those increases with reports such as today’s Empire manufacturing number, which plunged from up 11.8 to minus 7.79, and that is what economist Rick Santelli calls “textbook inflation.”
The future General Business Conditions index fell 30 points, reaching 22.5, its lowest level since early 2009. Tyler Durden at Zero Hedge agrees with Santelli. “And the kicker: margins continued to collapse as prices paid fell less than prices received. This is what stagflation is, pure and simple.”
World wide, there is also brewing domestic uncertainty in China. The Wall Street Journal reports, “A wave of violent unrest in urban areas of China over the past three weeks is testing the Communist Party’s efforts to maintain control over an increasingly complex and fractious society, forcing it to repeatedly deploy its massive security forces to contain public anger over economic and political grievances.”
India is also seeing food prices rise about 11% and Brazil is experiencing inflation, too.
In short, everything is going in the wrong direction.

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