The CPI is largely discredited. All you have to do is look at the prices of what you buy to know that we are, and have been, experiencing massive inflation for a few years now.

What the CPI is picking up right now is due to the large degree of discounting going on at the wholesale level to clear out stocks built when sales were higher. I am seeing that in my business now. As production levels come down to match quantities demanded, the CPI, however flawed, will again begin to rise.

Regardless, considering the amount of funny money the U.S. is pumping into the world economy, you can expect nothing less than continud, out of control inflation (devaluation).

[edit on 19-11-2008 by Grumble]

Originally posted by Grumble
All you have to do is look at the prices of what you buy to know that we are, and have been, experiencing massive inflation for a few years now.

We have indeed.

However, with a combination of contraction of credit and destruction of debt,
meaning the "credit crisis" and the ever-increasing defaults,
we've entered a phase of deflation. It isn't fully reflected in key areas like food yet (have you seen the price of cheese lately???), but it's happening.

The bailout bucks and other funny money won't be enough to cause inflation .... yet. This deflation must happen to correct the rampant inflation we've experienced for the last several decades, and once that correction happens we'll be free to ride the inflation train again. And ride we will; there will most certainly be another "bubble" or "boom" once this is all over.