Friday, January 28, 2011

Inflation Returns

Check out the disconnect between the people who actually invest money and those that don't.

The financial markets are concerned about inflation.

But Treasury Secretary Geither is not, calling inflation "not high on our list of concerns."

The bond market sees inflation creeping into the U.S. economy.  Interest rates are rising.

But Fed Chair Bernanke doesn't see any inflation and voted this week to continue his $600 bond repurchase program.

Oil, food, and energy prices have risen sharply, as any buyer of gasoline or cornflakes has noticed.

But the U.S. government does not count those items, coincidently the most common purchases of the average American, part of the core inflation number.  By the way, the head of the European Central Bank disagrees with this practice and thinks the use of a core inflation rate fails to predict real inflation.

I have been predicting inflation in this blog for YEARS and YEARS.  In fact, the second ever post in this blog dating back to April 2009 was about inflation.

I'm very happy the world, the financial markets, the American consumer, and the European, Chinese, British, Australian, and virtually every other central banker in the world sees not only the current inflation but the future danger it poses.

Except, of course, Mr. Geither and Mr. Bernanke.

Go figure.