Sunday, May 15, 2011

Inflation is just a shadow in the jump toward a better economy

"After weeks of pain at the gas pump and the grocery store, the worst appears to be over.  Oil prices have fallen, with gas soon to follow. Demand for farm commodities, like the corn used in everything from cereal to soda, has dropped. And businesses remain slow to pass along higher costs because customers aren’t getting raises and might walk away.

Inflation isn’t much of a worry for economists these days. “I think the bulk of the big price increases are over,” said Gus Faucher, an economist at Moody’s Analytics.  Lower prices — or at least a break in their steady rise — will come as a big relief. Consumer prices rose 3.2 percent for the year ending in April, the most since October 2008. Higher food and gas prices drove the gains. Excluding those two categories, prices rose 0.2 percent in April. They rose 1.3 percent over the past year, below what the Federal Reserve considers healthy. Economists study this figure, known as core inflation, because food and energy prices are volatile.  

Some inflation can be healthy for the economy because it encourages people to spend money and invest rather than sitting on their cash. More spending drives corporate growth, which makes businesses more likely to hire people."  Full article from the San Mateo County Daily Journal 5/14/11.

Posted by Kathy Meeh


Anonymous said...

Bllzzzt! Just wait until QE3. Numnuts.

Anonymous said...

Consider this possibility: the economy is not going to get better. Neither are you. Deal with it.

Kathy Meeh said...

Ha, ha, ha..."..Just wait until QE3." Isn't that what you said last year, ol' Prince or Princess of darkness? Maybe some of your Congressional friends can block raising the debt ceiling. USA defaulting on its debt should be a barrel of fun. And your dream economy collapse and major inflation will come true.

Otherwise, the Federal Reserve monitors issues of inflation, deflation and stagflation. So far so good. Maybe when you've lived longer you'll get it.

Tea Party Patriot said...

Who cares if the USA defaults and the world economy collapses. At least we'll be able to point our finger at Obama.

Anonymous said...

The Obama administration will begin to tap federal retiree programs to help fund operations after the government loses its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.

Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With the government poised to reach that limit Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.

Kathy Meeh said...

"Who cares if the USA defaults and the world economy collapses. At least we'll be able to point our finger at Obama." Scary, but ironically funny, PT 6:56am.

Anon 8:06am, the US dollar has been declining more than 10 years, its part of a dollar vs. other currencies strategy (having to do with the relative value of our currency vs. others). If the dollar is cheap other countries tend to buy our products, if the dollar is strong by comparison we tend to import. A strong dollar is generally better (sign of a healthy economy), but will bring in some inflation. George Soros (age 80) and his related corporations are currency traders, of course he would understand such issues).

Raising the USA debt ceiling is a given. Multiple congresses from other presidential administrations have done the same; including congress under President George W. Bush. Raising the debt limit is done so that the USA can continue to transact business. Otherwise default of the USA government is not an option, and has never happened. Yet those of you with little knowledge and "big simple ideas" have a plan. Either way, do not "plan" on winning the next Presidential election with such reckless advocacy.