Using google insights, I attempt to gauge the ‘winning’ side of the famous ‘inflation vs deflation’ debate. This week’s chart update shows that inflation worries are starting to be overcome by deflation worries. Since the 2009 low, fears about inflation have been on the rise, and their antithesis – deflation fears – have been waning. The charts below could indicate a reversal of this trend.

 

The first chart uses plain search volume indices from google insights, whereas the second chart uses the relative out-performance of those indices (over searches about ‘finance & investing’). I invert the ‘deflation’ parts (red) to show how the two search items are competing with each other. When the blue parts are high, people are searching for ‘inflation’. When the red parts are very negative, people are searching for ‘deflation’. The yellow line is the aggregate of these two. When it is rising, inflation fears dominate, and when it is falling, deflation fears dominate.

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An update of the daily treasury statement charts:

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