Consumer Price Index rose 0.8 percent Nov and annual rate of 4.2 percent

Inflation is almost at a 5% annual rate.

http://news.yahoo.com/s/ap/20071214/ap_on_bi_go_ec_fi/economy;_ylt=An4fW5PgYYNWrDCi5fWyStmyBhIF

 

This has already been covered today.
http://forums.digitalpoint.com/showthread.php?t=567937&page=7

 

How is inflation at 5% if prices are going through the roof on about everything

 

Core CPI. Does not include Food or Energy costs, which we all know are the two industries that get hit first.

You can thank Clinton for the change from good old CPI to core CPI because energy and food fluctuate too much. Of course, by leaving out those two measures, you never see the 6th month impact of higher food prices, because the trickle down is delayed and diluted.

Not to mention that the Housing Boom did a great job of suppressing rental prices, even if the boom is really a bust. If there is a credit contraction, people will be forced to give up their homes and rent. The only offset I can see is that people with homes that can keep them, might be inclined to sublet to make up for the loss in equity, which seems to be what a lot of people are relying on for equity these days.

 

Did anybody notice that Morgan Stanley issued a full-scale recession alert? We are talking about Wall Street people, they are always the last to admit that the economy is bad, since that hits their bottom line. Hyperinflation is unavoidable.

For hardcore believers, it is always "economy is robust" and "inflation is under control". I am sure even when the bank throws them out of their houses they'll explain it away. I don't know how, but they WILL find a way.

Faith and emotions are bad for your family well-being

 

Smells like stagflation to me

Just like the 1970s -- High commodity prices and recession

 

http://www.marketwatch.com/news/story/mild-recession-likely-morgan-stanley/story.aspx?guid=%7BB3B506BA%2DFF11%2D4D76%2D849D%2DB8B4A16797A1%7D

They didn't say that the economy is in a recession they said its likely to go into one.

 

Yes, and a bunch of other lies - that's why it pays to listen to what economists have to say instead. But it's quite telling that even Wall Street admits that at least something is wrong

 

Some more bad news:
Adding to the List of Worries, Signs That Inflation Is Bubbling Up

 

At least they have method to calculate economic activity whether you believe in it or not.

 

A slowing economy should alveite some of the inflation concerns.

 

WTF are you talking about? You're clueless m8.

 

I don't dislike Soniqhost personally, but I have him on ignore, because he posts a lot of stuff that is totally illogical and there is not enough time in each day to correct all of it in depth.

Inflation can survive in the short term if the economy is active due to the velocity of money. When it slows, you have stagflation. Rising prices and recession. The worst of both worlds.

 

Exactly!!!

 

The only way to alleviate stagflation to to increase interest rates and reduce the monetary supply

It took ten years of 10-20% interest rates to tame the stagflation of the 1970s

 

Is it just me, or is anyone else surprised that we haven't seen any deflation in decades?

Inflation and deflation are natural, offsetting conditions.

I mean, with economies of scale, shouldn't the price of a Big Mac or a loaf of bread be going down?

 

Not really. Its the law of supply and demand. The poulation is going up and the US loses 1.2 million acres of farmland to development eary year. That's 2 acres per minute paved over.

 

So basically, population is outpacing economies of scale and innovation.

That's a reasonable argument. I don't like it, but it's reasonable.

 

Economies of scale will work with manufacturing but wheat production is another story.

Population is growing and at the same time we are losing 1.2 million acres of farmand per year. Wheat is currently $9 per bushel and demand is growing in India and China and the US population has also increased 100 million over the last 20 years.

 

Wheat prices surged above $10 a bushel for the first time ever on Monday amid concerns that strong demand globally could result in a grain shortage in the United States next year — worsening food price inflation.

Unprecedented demand for agricultural products from fast-growing countries including China and India has exacerbated the supply crunch.

http://news.yahoo.com/s/ap/20071217/ap_on_bi_ge/commodities_review;_ylt=AizaTVafIXcG1aAmFfKeDdys0NUE