Inflation surge: Here to stay?

[UpInArms]

http://news.yahoo.com/news?tmpl=story&cid=2326&e=8&u=/csm/20051013/ts_csm/ainflation

NEW YORK - If it feels like money is flowing out of your pocket, it isn't your imagination.

In the wake of the hurricanes, the cost of living across the nation is skyrocketing.

• In Ft. Lauderdale, Fla., Jerry's Café is telling customers it will raise breakfast prices by 10 percent.

• It used to cost Jacques Stambouli of Via Trading $650 to move a truckload of goods from Reno to Los Angeles. Today? $750. He's passing the hike on to consumers.

<snip>

Such changes are expected to show up Friday when the government reports the September consumer price index (CPI). Economists expect this inflation indicator to show a rise of between 1 and 1.5 percentage points.

This would be the sharpest spike since January 1990, when the CPI rose by 1.1 percent after a cold snap in December shot energy prices higher.

...more...

And just who was in office in 1990? Why GHWB! What was it that the sonofanidiotnutjob said in 2000? Oh, I remember! It went something like this:

"Ah'm gonna pick up whar ma daddy lef' off" GWB campaign 2000

[On the Road]

1. If Inflation is Due to Higher Oil Prices

than it should cool off if oil prices drop. The danger is more from setting off an inflationary spiral with continued expectations of high inflation.

Personally, I think another recession is in the work driven by real estate declines and higher oil and commodity prices. That should dampen inflation after the increase in the price of oil is absorbed. But we'll see.

[tritsofme]

3. Exactly. The number to watch tomorrow is core CPI

Everyone is expecting a huge jump in the headline number.

But if core CPI starts to tick up in the coming months we could have a real problem with inflation on our hands.

[On the Road]

5. Core CPI will Indeed Be the Key --

It will tell how much of the oil price increase is flowing through to other prices. Personally, I haven't seen it yet, with the possible exception of groceries. The jump is so large that it's difficult to see how it can simply be absorbed. Guess we'll find out. I'm willing to bet the core CPI number will be better than expected, and that it was reflected in this afternoon's market rally.

[tritsofme]

7. The street is expecting 0.2% increase in Core CPI

I really can't see it coming in lower.

I think 0.3% is more likely.

I think the market coming back from its day lows today had more to do with late day drop in crude before the NYMEX closed.

[Zynx]

6. Greenspan is wrong to suggest there is general inflation in the economy.

The inflation that there is is not caused by strong economic growth, but rather by strange temporary trends. The attempt to kill housing by raising short term interest rates is a misplaced notion that does not even make logical sense. Perhaps the fed sees inflation that the rest of us don't see in capital goods and most services.

[firefox]

2. A lower standard of living is here to stay

Thank goodness so many people pledge for an indivisible nation with liberty and justice for all. At least we got that going for us.

[BiggJawn]

4. It used to cost me $68 a month for fuel. Now it costs me $192...

That's to move my carcass to and from my job every day.

And unlike Jacques, I either have to eat it or stick it up my ass.

Oh, my employer charges me to park in his garage, too. THAT went from $85 to $192 this year, too. But that's OK, he gave me a 2% "raise"...

But Alan Pondscum says we have no inflation. And as long as he keeps "valving off" a little interest every month, we won't. :sarcasm: