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RISING GASOLINE PRICES DRIVE INFLATION
Posted by: Darrell Castle
February 18, 2010
Topic: Bankruptcy
The New York Times, in an article entitled "Energy Costs Push up Producer Prices," reports today on last week's inflation numbers as measured by the Producer Price Index (PPI). I will endeavor now to translate the Times article.
"Producer prices in the United States increased 1.4 percent in January outpacing expectations of a 0.8 percent jump-mostly because of an increase in gasoline prices. Excluding volatile food and energy costs, the increase was 0.3 percent compared with a forecast of 0.1 percent."
Translation: Prices went up in January much higher than expected but if the two things people must have to live, food and fuel, are excluded, the increase was not as high.
"On Thursday, a separate report showed the number of people filing first time unemployment claims last week was much higher than expected-to 473,000, up 31,000 from the previous week. That increase rekindled worries that the labor market would be slow to bounce back, even though it has gradually improved in recent months."
Translation: Unemployment is increasing despite government efforts to inflate it away with printed money and this is an unusual situation that the government economists don't understand because they only know one point of view, i.e. the government point of view. That is the only point of view taught in their Ivy League economics departments.
"Economists were also debating the effect of recent East Coast snowstorms on the weekly jobless report. Some said it probably meant fewer people were able to file unemployment claims because government offices were closed; others said it likely had a limited effect because many people file claims via the internet."
Translation: Some government economists thought the recent bad weather made unemployment higher but some disagreed. Is that all these PHDs in economics from Harvard, Yale, and the London School of Economics have to do? Don't you have to be smart to be a Rhodes Scholar?
Conclusion: Inflation will make everything cost more especially food and fuel. If something isn't done quickly to bring down government debt and slow the increase in printed money we will be fortunate if we don't all starve because we won't be able to afford bread. Get out of debt folks, before it's too late.
