Inflation Fear: Rear-View Mirror Thinking?

Testing, testing.... In what could be a new feature, and not to be confused with Tuesday's With Morrie, here is Monday's with Mish? As the venerable Mish Shedlock commented on inflation...

Rear-View Mirror Thinking 

Those looking for a huge inflation boost fail to understand credit dynamics.

Austrians who only look at money supply keep expecting pent-up inflation. The Monetarists at the Fed (central banks in general), are clueless about the situation they fueled. 

Perhaps we get consumer inflation for a quarter or two, but inflation is in the rear view mirror, primarily having impacted asset prices, not consumer prices. 

Rising interest rates are already starting to impact the housing market. The auto market, home supply markets, and consumer credit in general got a temporary housing boost. 

What's next won't be pretty, and almost no one sees it coming. They can't. Inflation is in the rear-view mirror.

What economists expect to happen, already has. They don't see it because they do not understand what inflation really is. 

The economy is weakening and the Fed, fearing inflation is hiking right into it.  

Moreover, real median wages have fallen in seven of the last eleven years! 

This helps explain the falling savings rate. It certainly does not support consumption.  

I expect another round of asset-based deflation with consumer prices and US treasury yields to follow.

We Natter... although the conclusions we envision are ever so slightly different, well put, and Mish is one of very few pundits who "gets" it. 

Rates will continue to rise due to factors OTHER than the traditional demand side driver - inflation. What we suffer is stagflation of rising nominal and decreasing real wages with stagnant GDP.

Like Mish, we clearly SEE what is coming up dead ahead (pun intended). It will be sudden, seem to materialize out of thin air (ex nihilo), blindsiding most and eliciting many a WTF? 

Especially from those who have been driven to a vitiated state of half truths, and false doctrines by misinformed economorons, and a steady diet of MSM parrot food.

Those bold underlined sections above, apply to many we know who have been inebriated by the growth and inflation hysteria Kool-Aid, while being misguided by bad theory.

To reiterate MISH's comments, those who FAIL TO UNDERSTAND, and THINK they know, but really DON'T.  We can only offer the facts, truthful analysis based in good theory and this...

"The obscure we see eventually. The completely obvious, it seems, takes longer." - Edward R. Murrow

Inflation is in the Rear-View Mirror