Monetary Watch February 2011: Obama’s budget, the GOP and its implications for US inflation

``Turning to our longer-term twelve-month rate of change metrics – more indicative of the underlying trends – and focusing on our preferred TMS2 measure, we find that TMS2 saw another healthy increase in January, growing at an annualized rate of 9.9% for the second month in a row. As we said in last month’s Monetary Watch, we think that’s close enough to 10% to mark January 2011 as the 24th time in the last 25 months that TMS2 posted a twelve-month rate of growth in the double digits. That equates to a cumulative increase in TMS2 of some 26% over those 25 months. To put those numbers into perspective, the run-up to the now infamous housing bubble turn credit implosion turn Great Recession saw a string of 36 months of double digit growth for a cumulative increase of 48%. So yes, today’s inflationary largesse may be only 54% of that which brought on the Great Recession, but this one’s still going strong.''