Phil > its a perfect world, no deflation and no inflation.
csmonitor.com
>>Inflation a top threat to economy
Consumer prices have risen at a 5.5 percent annual pace for the past three months, rippling from plywood to dairy section.
A cab ride in New York now costs 26 percent more than it did a year ago.
Over the past three months, consumers have seen prices rise 5.5 percent on an annualized basis - the highest inflation rate since the late 1990s.
"This isn't pretty," says Bob Gay, chief economist at Commerzbank Securities in New York.
Rising inflation, in effect, acts as a tax on consumers, reducing the amount of money they have to spend on vacations, gifts, and trips to the mall. If it were to continue, it would affect the stock and bond markets, which generally react negatively to inflation. And the higher inflation rate probably ensures that the Federal Reserve will hike interest rates at the end of the month. Most economists expect the Fed will only hike rates by 0.25 percent. But the inflationary pressures mean this probably won't be the only rate hike.
"This is only a warm-up," says Mr. Gay.<<
Normally, this should be a stimulus to the gold price, but who knows? |
