By Addison Wiggin
06/16/09 Baltimore, Maryland We note a couple of peculiar celebrations in the world of economic data today.
First, much to Wall Street’s delight, housing starts jumped 17.2% from April to May. The Commerce Department blew expectations out of the water on this one, as the Street was hoping for a 7% climb. Permits to build new property rose as well, up 4% and also nearly double trader expectations.
“Wow” we heard a CNBC talking face beam. “Another good sign,” said The Washington Post. Maybe we’re just too thickheaded… but with a 10.1 month supply of homes already on the market, how does building more make us all better off?
Second, producer prices posted a 5% annual decline in May, its biggest yearly fall since 1949. The PPI actually inched up 0.2% from April to May, but still far less than the Street’s 0.6% estimate. Thus, as CNN declared, inflation remains “in check.” We certainly won’t argue that idea in the near term, but as you may have gathered from yesterday’s 5, we don’t have the stomach to bet against a trend like this one:
Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, an independent financial research firm based in Baltimore, Maryland. His second editions of international best-sellers Financial Reckoning Day Fallout and The New Empire of Debt, which he co-authored with Bill Bonner, were updated in 2009. His third book, The Demise of the Dollar… and Why it’s Even Better for Your Investments was updated in 2008, the same year he wrote I.O.U.S.A. Read more about Wiggin’s best-selling books here.
Wiggin is the executive producer and co-writer of I.O.U.S.A. an acclaimed documentary nominated for the Grand Jury prize at the 2008 Sundance Film Festival and the 2009 Critics Choice Award and shortlisted for a 2009 Academy Award. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs.
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The end of Bretton-Woods shows up pretty clearly on this chart, doesn’t it.