Friday, May 15, 2009

Deflation Over 12 Months

Here's the updated CPI (the press release for April just dropped this morning).

May 2008 0.84% 0.34%
June 2008 1.01% 0.41%
July 2008 0.53% 0.46%
August 2008 -0.40% 0.44%
September 2008 -0.14% 0.40%
October 2008 -1.01% 0.30%
November 2008 -1.92% 0.09%
December 2008 -1.03% 0.01%
January 2009 0.44% 0.01%
February 2009 0.50% 0.02%
March 2009 0.24% -0.03%
April 2009 -0.22% -0.10%

We haven't seen annual deflation for 50 years. It is the greatest fear of the money people at the Fed.

Now is the time to be turning cash into hard assets. Food, gold, property, etc. We are in a window now where your money will buy good deals, so use it wisely folks.


Big Jay said...

Mark - What are you buying? I'm not really coming up with any good ideas at the moment other than food storage, and other durable goods. I'm not in a position to even buy a house, let alone pay it completely off. I'm pretty much just seeing a storm on the horizon, but not sure what to do about it personally.

Mark said...

Food storage is important, but I'm in the process of trying to keep my business going, so I'm not exactly in the position to buy lots of goods.

I would like to be buying gold coins, 1 ounce and 1/10 ounce. Silver is also a good choice, and can often be purchased locally. Both will be good hedges against inflation.

Generally I'm avoiding purchases that aren't essential. We're buying some homeschooling materials we'll be needing later this year.

My guess is that serious inflation will hit next year, around election time, when most of the stimulus money starts hitting the economy.