That would be inflation swining wildly down, professor Krugman

Says the Professor:

What’s kind of shocking about this is that official Fed doctrine is to focus on core inflation, not react to short-run fluctuations in commodity prices. And the history of the past decade or so has showed that this is very much the right thing to do — headline inflation has swung widely, while focusing on core inflation has been a much better (though not perfect) guide to appropriate policy.

What is his point? We have a disinflationary trend over the last thirty and the ten year bond has been dropping right along. The ten year has been continuing to drop, to negative rates as we see here.

This is the shadow policy rate, the returns on the treasury curve as computed by the economy. Which gives us the real return on the ten year bond, about -1%. Inflation, no matter how you measure it is going down as the Fed commits fraud on behalf of government. 

What is the outcome? Money markets abandon the low income consumer and serve only the wealthy. The low end consumer, without the utility of money, rebels. The result should be a better formed democracy, or alternatively, the result could be Venezuela. I think the former. I think the rich who are well served by Krugman philosophy will realize that the only hope is a fair democracy, like the one Tim Draper is proposing.