With all of this money being flooded into the economy, common sense tell me that inflation should have reared it's ugly head long ago. Oil, Gold, grain.... all at historic highs, yet low inflation numbers. The 10 year and long bond are yielding historic lows also. The dollar is very weak. What is going on here? With the Fed saying it is ready to lower rates in an agressive manner I would think the 30 year bond would drop like a stone and send the yield sky high. Yet other countries are STLL not dumping treasuries. It seems nothing is normal anymore. Will this all suddenly catch up to us and one morning when we will wake up to the Fed in a panic and hike rates to the moon? Where is my thinking wrong. So confused.....
U.S. has for a couple of years a new export hit : switching inflation to China ! China itself saying "Thank you, uncle BEN for the trade surplusses..." And then Paulson visits Bejing and asks for some repatriation of USD into U.S. economy.... Chinese very friendly and warmth people : of course they say ! Why not ? We have 1500 Billion USD ? How much do you need ? And Paulson says : well, we have MER, CITI, BSC, MS; JPM, WB, BOFA in trouble... Please choose !
Global inflation and US inflation is rising fast and the FED is yelling it's going to cut rates. The FED are NUTS!!! Next week the Producer Price Index for December will be released on Tuesday, and the Consumer Price Index on Wednesday for signs of growing inflation. Be ready. http://www.bloomberg.com/apps/news?pid=20601086&sid=a_zETVJ4TySM&refer=news Brazil December Inflation Accelerates on Food Prices (Update3) By Andre Soliani and Carla Simoes Jan. 11 (Bloomberg) -- Brazil's consumer prices rose the most in more than two years last month, making it harder for the central bank to further cut Latin America's highest benchmark lending rate. Consumer prices, as measured by the IPCA index, jumped 0.74 percent in December, the biggest increase since October 2005, the national statistics agency said. The gain, fueled by food prices, was almost twice the 0.38 percent increase in November and pushed the annual rate to 4.46 percent. http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10486374 Inflation tipped to breach 3pc mark 5:00AM Saturday January 12, 2008 The Reserve Bank (of New Zealand) may not be able to ignore for much longer the effects of rising energy prices, which economists and the central bank expect to help push inflation above the target band for at least the next year. For the last four quarters, consumers price inflation has remained within the Reserve Bank's 1 to 3 per cent target. However, inflation is expected to rise 1 per cent in the three months ended December, lifting annual inflation to 3 per cent from 1.8 per cent in September, according to economists polled by Reuters. The data is released next Thursday, giving the central bank a week to consider its next move on interest rates. While the Reserve Bank forecast annual inflation of 3.1 per cent, and at least 3 per cent for 2008, there may be some nasty surprises within the figures, economists said. http://www.bloomberg.com/apps/news?pid=20601086&sid=a8AWLaSe2dHg&refer=news Peru Inflation, Growth to Slow This Year, Armas Says (Update2) By Alex Emery Jan. 11 (Bloomberg) -- Peru's inflation rate will decline this year as slowing economic growth crimps consumer demand, Central Bank Research Director Adrian Armas said. ``The bank is taking into account the slowing world economy,'' Armas said today on a conference call. ``Peru will see lower growth, and consumer demand will be more consistent this year.'' Consumer prices climbed 3.93 percent in 2007, above the bank's target, on surging costs for imported commodities such as soybeans, wheat and oil. Peru's economy is slated to grow 6.2 percent this year after expanding 8.3 percent in 2007, Finance Minister Luis Carranza said Jan. 8. http://www.guardian.co.uk/feedarticle?id=7217288 ECB sees increased wages, prices risks-WeberReuters Friday January 11 2008 BERLIN, Jan 11 (Reuters) - European Central Bank (ECB) policymakers see an increased risk of higher than expected wage gains and a resulting quickening of inflation, Governing Council Member Axel Weber was quoted as saying on Friday. After leaving interest rates on hold on Thursday, the ECB had made it clear that it had zero tolerance for any wage-price spiral or firming inflationary trend, Weber said in comments to Germany's ZDF television published by the Bundesbank. "We certainly see an increased danger that higher than previously expected wage increases are coming and also subsequently the resulting price gains," Weber said. "That would extend the current short-term acceleration in inflation. We would then need longer to get back to stability. We would not tolerate that," he said. The interview was conducted on Thursday, the Bundesbank said. Weber, who is president of the German central bank, said the ECB expected the combined euro zone economy to grow by around 2 percent or slightly less which was "satisfactory". "What is more important to us at the moment: we have clearly stated that we will nip any inflationary tendencies in the bud if they threaten to spill over into future inflation trends," he said.
With a recession already here, the supply/demand equation changes. Less demand equals more supply equals cheaper prices. Our Central bank here in Canada is lowering our interest rates...to stave off recession,not worried about rising prices. Heck, real estate is tanking, oil comes down in a recession, less cars etcetera are purchased. Sorry folks, don't see the inflation at this point. I am seeing prices come down lower and lower, though.
You aint seen nothing yet. wait til oil hits 140/50. Ask your self why "the strategic oil" clowns are stepping up their reserves in the last two month, adding 75 million barrels a day if not more. I doubt its in prep. for a war with IRAN. A war with Iran is not their worry. Hummm
prices have yet to come down! what prices are you looking at other than housing in certain areas. Housing in the south west region has not dropped, it is still strong in places like Texas. Austin, Houston, dallas are thriving for example. I agree oil will drop once a true global recession kicks in. But right now, Inflation is key, and double digits.