Keystone's Inflation-Deflation Indicator Signals DISINFLATION

The drop in the 10-year yield and weak commodities has dropped the ratio under 3.0 signaling that the U.S. is currently in a disinflationary environment.

CRB/10-Yr = 299.42/100.50 = 2.98

Over 4 = Inflation
Between 3 and 4 = Neutral; inflationists and deflationists fight it out
Between 2.9 and 3.0 = Disinflation
Under 2.9 = Deflation

Chairman Bernanke will step in with QE3 when we drop into deflation.  For now, Bernanke will simply start to lose sleep each evening. The CRB losing the 300 level is a big deal.

Note Added on 12/14/11 at 2:32 PM: CRB/10-Year = 294.93/100.75 = 2.93; clearly in Disinflation and now only a smidge away from Deflation.

Note Added on 12/14/11 at 4:15 PM: CRB/10-Year = 295.32/100.92 = 2.93; clearly in Disinflation and now only a smidge away from Deflation.

Note Added on 12/15/11 at 4:14 AM: CRB/10-Year = 295.32/101.08 = 2.92; clearly in Disinflation and now only a smidge away from Deflation.