Rowingboat, I think you're spot on with your analysis. The only thing I would add is that you seem to give the official CPI and PPI rates a greater respect than I do. If the USA was still using the same method of calculating CPI as they did up until the early 1990's, the official inflation rate would be about 12%, making the real negative interest rate much greater than your calculation.
As I understand classical Austrian economic theory, the best definition of inflation is simply the increase in money-supply, minus GDP growth. By this measure, real inflation also comes out well above 12%, and real interest rates VERY strongly negative.
Sooner or later, one way or another, inflation is going to become much more apparent than it is now
http://www.msnbc.msn.com/id/25873551/
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