What do you get when you combine a quarter percent increase in the base interest rate on Tuesday and the largest price deflation in 56 years the month before? Well, if you throw in a nice Smoot-Hawley type trade war, you get Alan Greenspan looking like the biggest fool since 1929. Let’s see if Greenspan and Company get as scared of an oil price shock induced deflation as they were of the specious idea of oil price increases causing a general price inflation.
On a seasonally adjusted basis, the CPI-U decreased 0.6 percent in
November, its largest decline since a 0.9 drop in July 1949.