Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : CFZ E-Wiggle Workspace -- Ignore unavailable to you. Want to Upgrade?

To: Galirayo who wrote (6237)	4/15/2008 3:56:43 PM
From: robert b furman	Read Replies (1) \| Respond to of 41599

HI Ray, Food and fuel were omitted because of their great volatility. Of course we also never need them NOT! Bob

To: Galirayo who wrote (6237)	4/15/2008 9:59:27 PM
From: Moominoid	Read Replies (1) \| Respond to of 41599

I guess you're asking about the core inflation measure? I think that is something also much misunderstood in the online finance media/blogosphere. The point isn't to say that energy and food aren't important but to look separately at inflation in these more volatile categories and in other less volatile categories. If the core measure is going up then energy and agricultural inputs price rises are having an effect on prices in the rest of the economy - we then have a more generalized inflation. The Fed thinks it has to act on that. However, if the inflation is mainly contained to those resources which tend to be cyclical (but probably are now going to be permanently higher - but not as high as this) it doesn't want to act on inflation too much because of its mandate for full employment. It can't do a lot about those prices which are driven by international markets. All it can do is crush the rest of the economy to counteract the inflation in energy and food. This doesn't seem very optimal. But energy and food are in the standard index that the government uses for stuff like indexing social security.