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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (48900)	4/21/2009 4:58:19 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 217758

are you being me? how incredibly unusual <g>

To: TobagoJack who wrote (48900)	4/21/2009 5:06:53 PM
From: elmatador	Respond to of 217758

Deflated Fed Battles to Keep Prices Up CPI 0.4% below its year-earlier level, the first decline in over 50 years. A Deflated Fed Battles to Keep Prices Up By JUSTIN LAHART In 2002, Ben Bernanke gave a speech titled "Deflation: Making Sure 'It' Doesn't Happen Here." Now it's happened. On Wednesday, the Labor Department reported that in March the consumer-price index slipped 0.4% below its year-earlier level, the first decline in over 50 years. The "core" CPI, which excludes food and energy prices, was up 1.8%, but it is possible that even people who don't drive or eat could see price declines in the months to come. Up until the financial crisis hit, much of the world was focused on filling U.S. consumers' widening maw. But now consumers are on a diet, and it is hard to imagine them returning to their spendthrift ways anytime soon. That leaves anyone in the business of selling goods and services to Americans in a bind. To stay afloat, they will all compete harder for the sales that are left. Stiffer competition makes for lower prices. Amid continuing credit woes, a protracted spell of deflation would be particularly unwelcome. Falling prices would make it tougher for borrowers to pay off debt, leading to even more defaults and even tougher lending standards. Mr. Bernanke knows this, and is fighting back. Ben Bernanke One of the deflation-fighting measures the Federal Reserve chief outlined in his 2002 speech was that the government could ramp up spending or lower taxes, and the Fed could buy the Treasurys issued to finance such moves. In practice, that is like printing money and handing it out to households, and it is pretty much what is happening now. When the fight is between falling prices and the Fed, it is hard to predict which will prevail. But it isn't hard to predict that the outcome will be messy.