Greenspan might be suggesting to Bernanke not to worry about inflation until it actually flares up. Which is the correct modus operandi for them....
What? Inflation IS 2% just because a lying, thieving cadre of criminals with an agenda claims such? Duh! THEY produced the numbers. They are farkin' LIARS!
Food e.g. is "only" weighted at 15% of consumer expenses in the CPI. Transportation 17.5%. Housing is 42%. Rising oil prices and agri commodity costs are (so far) partly offset by lower housing costs. http://www.bls.gov/cpi/cpiri2007.pdf
And the sad part of it is that NOTHING is going to be changed. Soon another crock (or bunch of them) will be elected and all preelection talk about "changes" will be forgotten. What a f^%#ing world we live in.
The CPI is such horse sh.t Hedonic pricing for everything. The myth that you get more for what you pay for every year even if you have no alternative but to pay more and can't pay less. Housing prices are lower but for most of the population who already have a mortgage, it doesn't make a difference. The current mortgage payments you are stuck in don't go down because house prices are lower. Anyway, get long commodities, that's the only way to protect yourself, you gotta hold your nose and buy high though.
The only solution is to get very rich. The poor are the ones that really suffer during inflation. The wealth inequality just gets bigger.