Is inflation too high?
From the journal today: "U.S. consumer prices surged in November on the back of sharply higher energy prices while underlying inflation accelerated at its fastest pace in 10 months, providing fresh evidence that the disinflation trend in place for much of 2007 may be coming to an end."
What do you think?
Best Answer
2183 points
ChaosNantuko answered 2 years ago …
The long term trend in inflation has a lot of background noise, but based on the charts, it follows a 15-20 year cycle. Up for 15-20 years, then down, then up, then down. 2007 is around the 19th year in that cycle, so we're already ripe for increasing inflation, according to the charts at least.
Between energy prices (which i have strong reason to believe will continue to move upwards), and the feds lack of options, i think we'll be looking at higher and higher inflation over the next 15+ years.
As for inflation being too high, i somewhat doubt that. The article says 10 months because it sounds the most dramatic. It neglects to mention that in the grand scheme of things, our inflation rate is still low historically. The official rate of inflation doesn't include energy or food prices though, but even with those things, i still believe we're at the tip of the iceberg when it comes to inflation.
Answers
236 points
Steph answered 2 years ago …
Cost of living for most Americans seems to be spiraling out of control. The seasonal nature of higher prices for fuel and heat during the winter is a factor, but it seems to be crossing into other sectors as well.
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421 points
WayneMulligan answered 2 years ago …
This is scary no matter what - if the Fed can no longer cut rates in order to combat an economic downturn we'll be in serious trouble. I'd be looking into multi-nationals, tech and even foreign ETFs in the short term.
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