Currencies & Inflation/Non-Inflation

[JEast]

Last month I posted a topic to continue our friendly debate on either non-inflation, or inflation titled 'Where is the pricing power'.  I bring this topic up again as major currency fluctuations this year appear to be influencing this issue considerably.  Of only 6-9 months ago, many were calling for the death of the $US dollar, but over that time frame the $US dollar is up significantly in currency terms.  True this may be temporary, but people and companies are making long-term planning arrangements on what they see today.

 

As per Partner16 indicated previously,

If you look at the high cost parts of most value chains (distribution and US labor), there is surplus supply leading to continued deflation.  The parts where there is inflation (some commodities) are a small portion of most value chains.

  I would to agree strongly with this statement.  However and to counteract this outlook, most of all my previously laid off colleague and acquaintances are now starting to be hired again as the job market is slowly coming back, at least in the Southeast region of the US.

 

Reference: http://pragcap.com/a-deflationary-red-flag-in-the-u-s-dollar

 

 

Cheers

JEast