Understated Words of Wisdom

[Kathianne]

My guess is inflation will hit sooner and with more impact than this warning:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aKsf3mmmoaCg


Fed’s Plosser Says Inflation to Increase, Warns of Complacency
By Vivien Lou Chen and Scott Lanman



May 22 (Bloomberg) -- Federal Reserve Bank of Philadelphia President Charles Plosser said prices may rise 2.5 percent in 2011, a rate well above central bankers’ preferred range, and cautioned against complacency on inflation.

“The economy may be at greater risk of inflation than the conventional wisdom indicates,” Plosser said in a speech yesterday in New York. “While inflation expectations appear to remain anchored, we should not become sanguine about our credibility. It can be easily lost.”

The bank president’s inflation forecast for 2011 exceeds central bank officials’ long-run preferred range of 1.7 percent to 2 percent, and contrasts with the concerns of some officials and economists that the economic slump may provoke a broad decline in prices....

[mundame]

2011 is a long way out to be forecasting prices.

At the moment we have mild deflation; 0% financing is a sign of deflation, as is the lowering of wages that many people have experienced as an alternative to their jobs being lost.

[Kathianne]

2011 is a long way out to be forecasting prices.

At the moment we have mild deflation; 0% financing is a sign of deflation, as is the lowering of wages that many people have experienced as an alternative to their jobs being lost.

I don't know about that. Interest rates have been on the rise. Gas prices have zoomed up to over $2.60 a gallon. Clothing prices are up, as are many staple products at food stores. The government playing games with financials isn't helping, but seems to be no stopping them:

http://www.forbes.com/2009/05/21/barack-obama-banks-protest-opinions-columnists-clifford-asness.html


The Protest Of A Patriot
Peter Robinson, 05.22.09, 12:01 AM ET
"I run an approximately $20 billion dollar money management firm," Clifford Asness explained in a note that he circulated to friends and investors earlier this month. The note criticized President Obama's economic policies. Despite his company's assets, Asness continued, "I am indeed fearful in writing this. It's really a bad idea to speak out. Angering the president is a mistake."

A graduate of the Wharton School and the holder of both an M.B.A. and a doctorate in finance from the University of Chicago, Asness worked at Goldman Sachs before founding his own firm, AQR Capital Management, more than a decade ago. If he isn't worth millions, Asness hasn't been applying himself. Afraid? A man who could barricade himself in his mansion behind pallets of hundred-dollar bills?

Asness, of course, was merely engaging in some clumsy attempt at humor. Or so I might have supposed if I hadn't just observed the following conversations.

In one, at a neighborhood barbecue, a businessman who ran a manufacturing concern spent a good quarter of an hour railing against Obama's plans to nationalize health care. He had informed himself about the pending legislation in minute detail. He had devoted hours to studying the effects on hospitals and HMOs. He had become utterly convinced that Obama's plans would harm millions.

Well, then, one of his listeners asked, why had the businessman failed to say any of this in public?

The businessman paused, astonished.

"Isn't it obvious?" he replied. "I have an obligation to my shareholders. Keep your head down. Don't speak out. In this climate, that's just being responsible."

At a party the following evening, a partner at a private equity fund told the table about his banker friends. "They're just outraged," he said.

First, the administration had forced the bankers to accept government money to strengthen their balance sheets. Then it had excoriated them for failing to lend amounts that would have weakened their balance sheets. Now? The bankers just want the government off their backs--but the administration is refusing to let them repay the capital they had never wanted in the first place.

Why haven't the bankers spoken out?

"These days," the private equity partner replied, "the government owns the banks. Nobody's going to speak out against his owners, right? That's just basic business practice. At least that's what the bankers are all saying to themselves."...

[Jeff]

I don't know about that. Interest rates have been on the rise. Gas prices have zoomed up to over $2.60 a gallon. Clothing prices are up, as are many staple products at food stores. The government playing games with financials isn't helping, but seems to be no stopping them:

http://www.forbes.com/2009/05/21/barack-obama-banks-protest-opinions-columnists-clifford-asness.html

When your fuel prices go up so does everything else, everything you buy is moved by truck, when the trucking company's have to pay the high fuel prices it is just passed along to the consumer, and yes the fuel is going up quickly( for the summer travel I am sure) so be ready when ya go to walmart to pay more.