Kass: Not-So-Little Lies in Inflation Data

This column by Doug Kass was originally published on Feb. 12 at 8:44 a.m. EST on Street Insight. It's being republished as a bonus for TheStreet.com and RealMoney.com readers. For more information about subscribing to Street Insight, please click here.

On Wednesday at his semiannual testimony before Congress, Federal Reserve Board Chairman Ben Bernanke will discuss the state of the economy. More specifically, he will likely comment on whether the economy can sustain itself free of inflationary pressures that are typically associated with the current trajectory of economic growth.

The level of inflation affects the term structure of interest rates. And the general level of interest rates determines, in part, the value of stock prices.

Most readers know that I believe that the government's inflation figures are bunk, and that the current benign inflationary readings (low) have misrepresented the true rate of inflation (higher). ...