Whoa, consumer prices jumped 1%

tho not the end of the world that is a huge acceleration. Has it begun?

news.yahoo.com...


WASHINGTON – The government says consumer prices shot up in June by the largest amount in 11 months, reflecting the biggest jump in gasoline prices in nearly five years.

The Commerce Department said Wednesday that inflation at the consumer level rose by 0.7 percent last month, slightly higher than the 0.6 percent increase that economists were expecting. It was the biggest one-month gain since a similar 0.7 percent increase last July.

Not much being said but the mean is usually .01 or something this is almost a 300% jump. I have always denied inflation was going to happen because of the loss of trillions during 2008. I may have been wrong

Definately needs some discussion

[edit on 15-7-2009 by Spartak_FL]

I suppose it is a scary trend setter and something to really keep eye an on

Tough to say. An early alert to a changing trend would be one qtr of data. Even then its too short. 2 qtrs of data is really the minimum to confirm a trend. Although I do believe inflation is coming, I think it is a little ways off.

Originally posted by johnny2127
Tough to say. An early alert to a changing trend would be one qtr of data. Even then its too short. 2 qtrs of data is really the minimum to confirm a trend. Although I do believe inflation is coming, I think it is a little ways off.

ya but we are supposed to be in a deflationary period. There is nary a sign of recory anywhere. A jump in inflation is well....not supposed to happen

If i remember right gas prices always jump high before the 4th, now gas here is back down a bit and even cheaper when i went camping in another state.. As for other things i havent really noticed yet still paying an arm and a leg for food like i have been for the past 2 years..

shocked by the lack of interest on ATS about this topic consider all the hyperinflation talk

Originally posted by lighter78
If i remember right gas prices always jump high before the 4th, now gas here is back down a bit and even cheaper when i went camping in another state.. As for other things i havent really noticed yet still paying an arm and a leg for food like i have been for the past 2 years..

I know the article says otherwise but it is not correlating it too the actual index. but gas/service prices are not used in measuring Inflation in the USA.Hence when gas was 5 dollars a gallon we were 'officially' having no inflation last year.Not part of the official measurement. Hasnt been since the late 70's.

[edit on 15-7-2009 by Spartak_FL]

reply to post by Spartak_FL


Probably because those of the prepper mindset knew it was coming, aren't phased, and are simply adjusting their stockpiling strategies to compensate for the increase in the price of goods.

This may not be the right thread to ask silly questions in, but - isn't inflation also tied to all kinds of loans in the fractional banking system? When a bank can hand out 10% of it's deposited money as loans, isn't there 10% more money? Formulated more directly: is inflation related to the amount of debt created by loans?

Originally posted by Spartak_FL

Originally posted by johnny2127
Tough to say. An early alert to a changing trend would be one qtr of data. Even then its too short. 2 qtrs of data is really the minimum to confirm a trend. Although I do believe inflation is coming, I think it is a little ways off.

ya but we are supposed to be in a deflationary period. There is nary a sign of recory anywhere. A jump in inflation is well....not supposed to happen

Depends who you talk to and the underlying driving factor. This jump was based on the surge in oil prices, which was driven primarily by the same factor as the stock market rally: the assumption of a recession bottom and recovery coming soon.

That has shown to be false and the markets and oil have fallen accordingly. Hence this 1% inflation number doesn't reflect the current economy that we are living in today, unless we see crude oil go back to where it was when this indicator's equation data was entered. This very well may happen, but it also may not. Point being why one month of data means nothing. There are blips up and down for all indicators, it takes a longer trend to draw real conclusions......

No doubt! It's probably more.

But I don't need a government survey to tell me - a can of Progresso chicken noodle soup, my son's favorite, went up 28 cents in one month where I shop.

LOL.

The MSM blew it nicely.

The big jump was seen as a temporary blip, however. Inflation is not expected to be a problem any time soon given a severe recession which is keeping a lid on wage pressures.

In order to play down the jump calling it "temporary blip," the writer admitted that we are still in a severe recession -- a condition that would tame any inflationary trend to worry about.

It's more than obvious that when the high unemployment figures go down, high inflation figures will kick in -- there is no other way.

Well to put it in perspective. Its like pulling the clutch on your car down a hill. You have to throw the brake on at the exact time or you will have inflation. Its been tried before and honestly its never been pulled at the right time by anyone in the history of economics. The best example of it working was japanese stagflation in the 90's but that is not a good outlook. The names are familiar. Wiemar, Hungary, Zimbabwe.

[edit on 15-7-2009 by Spartak_FL]

Originally posted by stander
LOL.

The MSM blew it nicely.

The big jump was seen as a temporary blip, however. Inflation is not expected to be a problem any time soon given a severe recession which is keeping a lid on wage pressures.

In order to play down the jump calling it "temporary blip," the writer admitted that we are still in a severe recession -- a condition that would tame any inflationary trend to worry about.

It's more than obvious that when the high unemployment figures go down, high inflation figures will kick in -- there is no other way.

Theoritcally the Fed should hike interest rates considerably at the first signs of recovery. But this will stall the recovery but keep inflation tame, done in intervals we should see a controled recovery. Thats the only playbook to this that can be used. There is no other. Hence my pulling the brake analogy above. If it works the outlook is still moderate contraction/Growth and high unemployment.



[edit on 15-7-2009 by Spartak_FL]

reply to post by stander


I think inflation is coming, big time in fact. But I don't think it is coming anytime soon. Like I posted before, this increase was primarily due to the run up in crude oil prices. Which have fallen again.

The issue is that there is asset price divergence right now. What I mean by that is, consumer staple items (items necessary to live) are the same price or higher (much higher in many cases), while consumer discretionary items (luxury items and non necessity items) are declining. So there IS inflation in some areas, while there is deflation in others. We can not see true inflationary figures pick up until the assets that are in deflation stabilize. That will be a while longer because those are also the items being sold in huge numbers due to deleveraging. So while inventory number for items like that stay high and increase there will continue to be deflation in that area. When that stabilizes, we will see bad inflation numbers.

Aren't prices gauged every month when hyperinflation kicks in?

Today, in the UK, there were murmurs about hiked fuel prices prices once the cap 'n trade kicks in next april. That is when TSHTF, but only once the election is out the way as neither party wants admission of guilt about the inevitable public spending cut and higher taxes/interest.

The halcyon days are over and the economic strangle-hold begins...it has to.

p.s. evil Goldman Sachs posted massive profits the other day and they are the major instigators of creating a commodities bubble based on fuel, where the paper trade is worth more than the actual existence of the product. Keep your eye on GS, they are the underlying architects of all this crap.

Originally posted by johnny2127
reply to post by stander

 

I think inflation is coming, big time in fact. But I don't think it is coming anytime soon.

Others feel that it could be around the corner, coz the demand for indexed bonds ("inflation bonds") rose yesterday. The gas prices wild fluctuation can start someting, coz gas is high on the list of items people buy and companies always try to adjust the price of their products according to the increasing cost in distribution. Since the oil futures trading has proved to be the best weapon against inflation, the avalanche is ready to roll.