From what we see of the CPI, there is no inflation. Of course that fact has been pounded home by Mr. Bernanke as well as every Fed Governor.

The conflict is between PPI and CPI now and that may hurt the consumer if the divergence continues. As wages are stable, the idea of stagflation enters into the picture again as the wholesale goods pricing may move higher. It is still unclear if this is a trend or an aberration as both the PPI and the CPI should match up better.

Either way, there is only one way to go if the recovery is at hand…. Right?

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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.