Inflation posted a HUGE jump - we're getting closer to the edge...

LINK to story

Quote:

The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected.

Wonder what effect this will have on things....

[edit on 19-2-2009 by shrike071]

Yes, but we by God have to fight even rumors of deflation right now! Ignore the facts, clearly they aren't news worthy because Ben Bernanke and the other pirates on the Fed's ship have told us that inflation isn't an issue, but deflation is swimming the water like a school of sharks after a blood trail.

At what point will the majority of Americans become so sick and tired of being blatently lied to that we start seeing rotten produce being thrown at these theives like Bernanke everytime they appear publically?

Most of the increase is from a supply and demand issue, not an "inflation" issue. Our currency (USD) is strong right now, getting even stronger today.

When the credit markets froze up tight, import shipping pretty much came to a halt. In fact in most ports there is still a lot of containers that have yet to be moved out to their final destinations.

When you don't have the supplies, but you have the demand, the price rises.

Originally posted by redhatty
Most of the increase is from a supply and demand issue, not an "inflation" issue. Our currency (USD) is strong right now, getting even stronger today.

Supply and demand is an essential component of the 'inflation' dynamic.

Currency 'strength' is relative. The US dollar is only 'strong' in it's relationship to a basket of other rapidly weakening currencies.

The last time we experienced double digit inflation was during the 1974/75 recession - cpi peaked around 14% - the dollar @ 109+...much 'stronger' than today's 87+.

IOW, US dollar performance relative to other major currencies should not be considered a metric for gauging inflation.


*DTWEXM is equivalent to the NYBOT USDX.

When you don't have the supplies, but you have the demand, the price rises.

Exactly...it's called price inflation. With declining profits, limited access to new credit, and the inability to roll-over existing loans...supply destruction is the inevitable result of producer cut-backs...suppliers going out of business. Those that believe an inflation scenario is the ultimate end game, will point out that cutbacks in base metals & energy production, are soon to be joined by serious shortages from the drought stricken wheat producing nations.

GL

Edit add: Protectionist measures to curb exports in order to satisfy domestic demand, will only fuel the fire of global shortages.

[edit on 19-2-2009 by OBE1]