hi. doesn't greenspan and the fed use the crb index as a inflation indicator? i thought back in the 90's around the time of"irrational exburence" he used to talk about the crb index. or am i wrong?
oh good. then how come all they can talk about is deflation? when they were talking about raising interest rates in the 90's,the crb was important but now its around 260? and pointing up but nobody cares(so they say anyway) i find this very strange.not that this has any affect on my life or anything but when listen to the knuckleheads on tv blab about how this does not matter i have to wonder. i'm just waiting for people to start with" its differn't this time"
I think it's more a function of the Fed waking up to the fact that while the targeted Funds rate may have much to do with stimulating much needed job creation, short rates have very little say in what the price of Live Cattle futures or Soybeans should be.
I think people generally use whatever supports what they want to do and make people think. Greenspan apparently wants to create inflation to keep the shakey economy from caving in the aftermath of the stock bubble. Eventually he will have to raise rates to chase this inflation out of the now parabolic CRB index as shown on this historical chart. You can see the divergences forming now...
And shouldn't be used that heavily as an index of inflation. There are better indexes out there to use.
Well at least one thread is alive and thinking... CRB mentioned here and the Fed hints at the threat of inflation is almost a big a threat as deflation --which in english probably means, we gonna have to start raising the rates. S&P homebuilding index down 5%, mortgage lender Washington Mutual down pretty good over the past two days....