Although the stock market isn’t deflating due to constant pumping, the economy is.

The Bureau of Economic Analysis has revised its estimates for the personal consumption expenditures price index. It’s an important number, because this is the index the Federal Reserve targets. And remember, it’s aiming for inflation of 2 percent.

Instead, the index fell in the second quarter. That is, the U.S. is experiencing deflation.

Obviously this should increase the attractiveness of the most hated asset class. And of course slowly erode whatever credibility the Fed may have remaining. We are so going Japanese.

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