This blog post originally appeared on RealMoney Silver on March 29 at 8:07 a.m. EDT.
"Life is full of misery, loneliness and suffering, and it's all over much too soon." -- Woody AllenInterest rates went up across the board last week, likely reflecting a combination of four factors:
- a strengthening economy;
- a growing deficit caused by geometric growth in government spending, which, in some circles, has called into question the creditworthiness of the U.S.;
- concerns about the upcoming supply of U.S. notes and bonds; and
- forecasts of higher inflation.
"Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often manipulated government reporting." - John Williams, Shadow Government StatisticsWilliams might be hyperbolic, but I continue to believe that, by including owners' equivalent rent (OER) as well as other substitution and hedonic adjustments, reported inflation understates the real rate of inflation ( see Barry Ritholtz) and the pressure on the middle-class consumer and on small businesses, which remain an important engine to domestic economic growth and job creation.