Krugman says no inflation worries

Inflation? Pssshh. Ain't no inflation coming. So says economist Paul Krugman, writing as columnist at the New York Times in this article. Really? Yeah, all this nonsense about inflation is totally overblown. As Krugman says:

First things first. It’s important to realize that there’s no hint of inflationary pressures in the economy right now. Consumer prices are lower now than they were a year ago, and wage increases have stalled in the face of high unemployment. Deflation, not inflation, is the clear and present danger.

Well, sort of. But from the news I'm reading lately, prices are indeed moving up--some at record paces. Consider the price of crude oil, which is experiencing the largest one-month gain in the last ten years (you may have noticed when filling up last). Metals are also doing well, taking a look at industrial metals such as copper and even silver. In fact, if a person bought silver just a few months ago, they'd see an increase in dollar value of ~30%! Not bad--and certainly better than Wall Street of late.

Oh, but that's the value of things relative to the dollar. That means relative to things of intrinsic value (such as oil or copper), the dollar is falling--a sign of inflation. But Krugman just said "there’s no hint of inflationary pressures in the economy right now". Hmmm. That's odd--I wonder why an established, influential economist like Paul Krugman would say something like that in light of the evidence I just cited. Maybe he's simply overlooked some trivial details concerning the economy? Probably happens all the time. After all, economists like Paul Krugman didn't seem to notice any signs of danger with the economy just a couple of years ago, either, did they? Of course, it's easy to have perfect vision of things past.

Notice how Paul Krugman is strongly stating that there's no need to worry about inflation--everything's under control and looking quite rosy considering the circumstances. Why would he do that? Going out on a bit of a limb, isn't he? Couldn't this have some serious consequences to his credibility as an economist if he's wrong? (Didn't something like this recently happen to Jim Cramer?) I wonder if he's got a safety net of some sort--perhaps someone willing to pay for some good news from such an influential economist--maybe someone who can pluck some policy strings somewhere?

Look, I'm just in industrial designer, and certainly no economist. But some of these signs--at least in the short term--are quite telling. These are things I'd expect a real economist to at least notice, and perhaps even write about. After all, we use economists to gain a preview of the future--and often base our decisions on such prognostications.

If inflation is of no real concern in the near future, you'd do just as well to hang on to your dollars. But if inflation does become a real issue, you can do something about that by getting rid of your faith-based Federal Reserve Notes in exchange for something of true, intrinsic value--and in doing so, you remove opportunity for wealth extraction at the hands of those who control the value of the dollar (and your work).

In times of inflation, the last person you'd want to be is a Baby Boomer at or near retirement with a cash nest-egg in the market or in the bank. Your dreams of the golden years will dissolve as quickly as the numbers of dollars to buy gold rockets upward--and the true value of your golden egg declines.

So to all of you who could actually do something now to maintain the value of the career you just worked--nah, don't worry about inflation. Consider it a healthy donation to your country at the expense of your dreams.