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There is and has been, plenty of inflation. This is the result of Central Bank ‘easing’ throughout the world and why Joe Average feels and is, far worse off.

We have had massive housing inflation, stock market and bond market inflation, or, asset price inflation around the world.

This chart depicts ‘consumer price’ inflation which includes your weekly grocery shop etc.

The word is that ‘inflation’ is set to rise. Commodities are setting up for the pre-2005 run-up in prices that saw oil hit $120+/barrel.

Usually that means that the Central Bankers will start to tighten interest rates, or in other words raise them. The only problem with that is that consumer credit is high and the quality dropping. Certainly here in NZ, new mortgages, say in the last 5yrs, after a massive increase in house prices cannot sustain any sort of interest rise without triggering significant defaults.