At last a good negative stat ! 😉
The Producer Price Index is down 10,54 % in june, compared to june 2008.
I know… I didn’t speak about CPI and PPI… for a long time.
But I feel a little update is necessary.
I wrote in february about PPI :
Due to the base effect, we are going to get in the coming months extremely negative values (in % of difference, year on year)…
This is the -10,54 % we have had in june.
Remember, summer 2008…. the Peak Exports… the Peak CPI… the Peak Olympics…the Peak everything… before the big bubble burst… Oil prices were burning… and were infecting a whole range of products due to higher costs.
Barrel was at 150 USD… And today 70… So of course, PPI is going down, year on year.
The item “Petroleum Products” (8 % within the index) is crashing by 44 %. “Food products, beverages, tobacco” (15,9 % of the index) is down 0,8 %.
Only fools look at those figures with fear : lower prices are good for everybody.
What the fools do not understand is that our modern economy is by essence deflationary… it’s called productivity : we do more with less, therefore “prices” (per unit) should go down.
Only the fools are calling for “inflation” (of prices)… Just to save the current order… Just to save their positions and the banks…
Deflation is good. Deflation favors savings and work.
Inflation is for the messy politicians, the debts lovers, the addicted to bubbles and cheap money.