Some stories are so obtuse that there is absolutely zero way I could make them up. For example, please see Deflation Disappears With Bond Market Showing Growth
Oct. 25 (Bloomberg) -- The bond market is showing Federal Reserve Chairman Ben S. Bernanke will succeed in sparking inflation after the smallest gain in core consumer prices in half a century increased concerns that the economy will deflate.
This is classic logic fallacy. Its also classic PR . . . a great example how news leads are written to lead astray.
The same data could show that after a record amount of stimulus, core consumer prices showed the smallest gain in half a century, increasing concerns that the economy is deflating.
Notice too the story headline, how it flatly states deflation has disappeared. Certainly it would be wonderful for the Fed if everyone agreed, but then we learn the article is merely based on expectations.
Expectations for rising consumer prices have increased faster in the U.S. than any other bond market this month as central bankers made the case for monetary easing through additional asset purchases. Yields on 30-year Treasuries climbed as much as half a percentage point since September to 2.61 percentage points more than similar maturity inflation-indexed debt, the widest gap since May and an indication for anticipated gains in consumer prices.
PR masquerading as news seeks to manage your expectations by framing the argument and subtly leading you toward its own conclusions. The antidote is to ask the age-old question: Cui bono?
Who benefits?
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