WSJ article; Minutes Trump Inflation Fears Stocks Make a Comeback Despite Inflation Signals February 20, 2008 5:10 p.m. Investors shrugged off signs of inflation past and future on Wednesday, opting instead to go on a buying spree fueled by confidence that the Federal Reserve is more concerned about the economy grinding to a halt than prices heating up. Data on retail-level inflation in January were surprisingly strong and crude-oil futures rallied to a second straight record settlement over $100 a barrel. If that rally persists, it could nudge other prices higher in the months ahead. That concern kept stocks in the red for much of Wednesday's session. But a rally took hold in the afternoon after minutes of the last Fed meeting bolstered Wall Street's confidence that the central bank will cut its key interest-rate target next month to shore up the economy, despite expectations that prices will keep rising. The Dow Jones Industrial Average rose 90.04 points, up 0.7%, to 12427.26. The Standard & Poor's 500 gained 0.8%, or 11.25 points, to 1360.03. The technology-focused Nasdaq Composite Index rose 0.9%, or 20.90 points, to 2327.10.
According to the Austrian School, the problem with managing inflation is that we have no instrument for measuring inflation that's remotly accurate. The indexes we use don't reflect the real picture, because in order to reflect reality you need to have an index that reflects peoples preferences ... and people's preferences change way too often... you would need to update the index several times a year... I think that the internet could change this, if someone figures out a way to keep an index that reflects every single item bought and sold... and compares the last price to the previous price paid for that particular item... that way the index would keep track of the actual increase in consumer prices relative to the volume of consumption for every single item... However, this would be a huge step foward... and I don't see it happening any time soon.
I think your right about that. Given the current inflation crisis that is starting to unfold a better system of measuring real inflation will have to be created as a result.
When inflation hits home its going to be hard for me to feel sorry for anyone hurt by it. Ron Paul warned everyone about it, time and time again, most people laughed him off and didn't think twice about supporting or voting for him. I've had my money in gold since it was at $750, if you can't beat them, join them. <object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/glrgcz4y5i8&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/glrgcz4y5i8&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>