A sign that hyper/inflation is coming soon?

[ImpeachKingGeorgeII]

"Survey Finds the Rich Returning to Familiar Spending Habits" ... http://adage.com/article?article_id=139009

Watch out for the QE wave!

 

[Zippyjuan]

But there are fewer of them (from the article):

The number of affluent households in which someone plans to start a business, however, dropped around 24% to 1.7 million in 2009 from 2008.

No, the rich still spending less than they were does not mean hyperinflation is coming. That is trying to make a massive leap from one to the other. The most recent CPI report:
http://www.marketwatch.com/story/us-cpi-up-04-in-august-on-higher-gas-prices-2009-09-16-83100

In July, the CPI was unchanged in July, while the core rate rose 0.1%.

The CPI report indicates little inflationary pressure on consumer prices in an economy that is still underperforming on an historical scale.

Fed officials have lowered their concerns about outright deflation in recent months, but they have said inflation is likely to remain low for some time as slack in the economy constrains pricing power.

"Labor market slack, high rental vacancy rates, and falling import prices are a powerful disinflationary cocktail that will remain in place next year," wrote economist Michael Feroli of JP Morgan Chase ahead of the report.

"Firms' pricing power remains limited as households are still struggling with rising unemployment and worsening personal income prospects," wrote Anna Piretti, an economist for BNP Paribas. "As a result, we expect core inflation to remain on a moderate downtrend for the rest of the year and to ease more rapidly into 2010 as downward wage pressures intensify."

Another economist disagrees with the disinflationary tale. "As the economy returns to solid growth in 2010, we are quite confident that, in sharp contrast to the consensus Fed view, core inflation will be creeping higher," wrote Stephen Stanley, chief economist for RBS Securities. Stanley said prices have bottomed on key items: cars, airfares, hotel rates and apparel.

Over the longer term, the massive fiscal and monetary stimulus being pumped into the economy threatens to unleash inflation. The government will have to be nimble to remove the stimulus at the right time. For now, getting the economy growing again is the only job that matters.

The Cleveland Federal Reserve Bank said its two alternative measures of core inflation, which do not automatically exclude food and energy prices, also showed very low core inflation in August. The median CPI rose 0.1% and was up 1.8% in the past year. The trimmed mean CPI rose 0.1% in August and was up 1.1% in the past year, the smallest gain in the 26-year history of the data.

 

[ctiger2]

The most recent CPI report:
http://www.marketwatch.com/story/us-cpi-up-04-in-august-on-higher-gas-prices-2009-09-16-83100

The CPI is a report of past inflation levels. It doesn't forecast coming inflation.

 

[Zippyjuan]

True but the article also says why there is probably still very low inflation in the near future.

The article in the original post is even less evidence of hyperinflation or even inflation of any kind. It says this group plans to spend less than they did the previous year. This is no evidence of coming hyperinflation in that. Lower spending does not lead to higher inflation let alone hyperinflation.

Of course, it's still hurting: The 2009 Ipsos Mendelsohn survey of the affluent, being released a year to the day of the Lehman collapse, finds consumers in that income bracket planning less overseas travel than in 2008 (down 10%); fewer are planning on buying new cars (down 18%); and are less inclined to invest in securities (down 5%).