The inflationary economy starts… now!
Wholesale inflation takes biggest jump in 6 months:
WASHINGTON (AP) — The government says inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products.
The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and sharply above the 0.2 percent increase that economists had expected.
The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.
One nice thing about owning some gold in the old investment portfolio. Days like this I at least figure the value of my gold will go up.
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Energy prices and producer prices have been deflationary over the past six months. At worst this is a sign of stabilization after that drop, and there are plenty of indicators internationally that suggest continued deflationary pressures.
Hell, gas prices were much higher this time last year, and they’ve been higher than they are now for most of the past six years.
You spent the past several years sifting through economic data, ignoring all the signs of instability and trumpeting whatever positives you could dredge up. The end result was a major recession and the kings of your market ideology suddenly discovering their assets are liabilities.
Now you are doing just the opposite. No, really you are doing the same thing: looking for the trend you want to see and ignoring all contraindications. You aren’t even waiting for data from the Obama era! Of course, even counting this week’s stimulus bill, Bush has shoveled more money into his gaping economic failure than Obama has. It’s a giant hole you market zealots dug, and whining about inflation while people try to fix the damage you caused seems a bit tacky.
“You spent the past several years sifting through economic data, ignoring all the signs of instability and trumpeting whatever positives you could dredge up.”
You’re kidding, right? I’ve been talking about the worsening economy since 2007, particularly wrt mortgages. If I’m talking about it more since the fall that’s because that’s when everything started falling apart.
The energy prices, as you say, are largely a correction or maybe just an oscillation, but wholesale prices went up 0.8%.
But, hey, if you don’t think we’re going to have inflation with the money supply going to the moon, let me know and let’s make a beer bet.
Couple more thoughts.
You’re working on an assumption I don’t think you’re aware of. You think presidency = economy. The economy does things far beyond the control of the White House or Congress.
Second, control of the White House changed, but control of the Federal Reserve did not. Bernanke and all of the board members are still in place from years past.
The Fed has powers separate from presidential or congressional control. The most obvious ones being their ability to control the money supply and interest rates. And note that some of the various bailouts are guaranteed not by the Treasury, but by the Fed.
It also says, “Despite the big jump in wholesale prices in January, economists do not believe inflation is on the verge of becoming a problem, given the country’s deep recession.”
I tend to agree. The wall street boys’ derivatives black hole will be absorbing, gobbling wealth for the next decade. No worries about inflation.
The inflation stuff is more snark than anything right now. I’ve said before we won’t have to worry about big inflation until after the recovery, that the recovery can’t happen until we’ve hit bottom, and that we’re not at the bottom yet.
I’m assuming presidency=economy? Ha ha ha. No, I’m just assuming that Christopher Cox’s tripling of leverage allowances for the largest brokerages tripled the damage caused by an unregulated market in falsely securitized and rated bonds. No, that’s not an assumption, just an observation of reality.
You’ve been watching mortgages since 2007 perhaps, but prior to that, it’s always been “don’t look at jobs and debt and income disparity, look at the stock market! It’s giddy, and everything’s great.” Of course it was giddy, they were inflating it with artificial value.
And fixating on mortgages is just doing the bidding of the clowns who got us in this mess, who you obviously affiliate with, since you continue to espouse their market zealotry to this day.
You are the one with a hidden assumption. You are assuming Obama and the Congress are acting from ideology. They are not. They are acting from desperation, trying to fix the huge mess Wall St fraud exacted on our economy and trying to make up for lost time dealing with energy independence, badly neglected by the Texas oil dunce and his ultra-elitist backers.
Hell, you’re assuming your “let the market sort it out” solution would have no side effects as unpleasant as inflation, yet the market is still trying to sort out just how deep of a hole they dug with their horribly entangled debt bonds.
You should probably worry less about inflation than about having to actually use your guns as more people become desperate due to job loss, busted pensions and safety nets shredded by decades of Republican abuse.
“Of course it was giddy, they were inflating it with artificial value.”
Yep. Like I’ve said, the Fed has a central role in the housing bubble by keeping interest rates too low to long. And of course they had the best of intentions. They were going to pull us out of the 2001 recession. What could possiblie go wrong?
Also, if deficit spending in the form of the porkulus is good, why wasn’t deficit spending good when Bush was doing it?
BTW, my answer to that is that it was bad in both cases. It’s double plus ungood now that it’s massive, concentrated, and just beginning. The porkulus is going to cost roughly as much as the entire Iraq war. Worse, because of the shrinking economy the deficit as a percentage of GDP is going to be ungodly.
“You are assuming Obama and the Congress are acting from ideology. They are not. They are acting from desperation …”
The desperation I agree with. They’re acting with some ideology. They’re acting more based on self-interest – buying their constituent’s votes with tax money and rewarding the unions that help get them elected.
“Hell, you’re assuming your “let the market sort it out” solution would have no side effects as unpleasant as inflation”
When you figure out how you can have inflation without a huge monetary input from a central bank (which is the Fed in the U.S.), you let me know.
The free market solution involves pain. Failed businesses, failed banks, foreclosures. The government solution is going to involve the same things. There might be a difference of degree or there might not. There will certainly be an enormous amount of money spent that will take generations to repay.
If you think the government knows what they’re doing, read this on Paulson and Geithner’s changes of plans.
Also, if deficit spending in the form of the porkulus is good, why wasn’t deficit spending good when Bush was doing it?
Because Bush was not doing it to make up for the multitrillion-dollar hole Bush ripped in our nation’s wealth.
I’m not saying all this spending is good; it is not. The situation is dire. This spending is necessary to try to compensate for the massive fraud of the past eight years.
I don’t know what the best way to recover from a war-profiteering and bank-fraud orgy is, but I am quite sure the poison we drank is not the cure.