Inflation in the UK—and nowhere else?

Alone among the over-indebted economies of the world, the UK is admitting that inflation is a concern.

“Give us a kiss, luv.”

November’s figures for the pound sterling came out on Friday: Wages rose at a pace of 1.1% increase per year, whereas inflation—as the Brits measure it—ie., realistically, unlike the Europeans and the Americans—was on a 3.3% yearly pace.

Nevertheless, the Bank of England will be keeping rates steady, at least in the short term—clearly, they want to inflate away their over-indebtedness.

Be that as it may, the Brits are the only ones facing up to the inflation tiger—in the United States, CPI numbers are steady-as-she-goes, Titanic-to-the-iceberg 1.1% year over year. BLS stats here.

The BLS is not taking into account “shortchange inflation”, whereby products are being sold at the same price, but in smaller packages. Even Diane Sawyer has wised up to shortchange inflation—and by the time Diane Sawyer figures it out, everybody has figured it out.

But not the BLS—they’re sticking to their head-in-the-sand CPI numbers.

Someone else with their head in the sand—not to say up their ass—is the Federal Reserve, which famously sticks to the “core inflation rate” (actually, they use what’s known as the Personal Consumption Expenditures Price Index): That is, a variant of the Consumer Price Index stripped of food and energy (which leads one to wonder exactly what is being measured by this so-called “core inflation rate”: The price of air? The price of sunshine? What, exactly?).

The Brits are having none of this cleverness—they’re looking at inflation in the face, and calling it as they see it.

Who’s better, who’s best: The Brits, who are pointing at the inflation tiger and saying, “Look! A tiger!”? Or the Americans (and to a lesser extent the Europeans), who have their heads in the sand, their fat behinds sticking out in the air, just begging to get their asses bit by the inflation tiger?

You decide!