Inflation Fears!

**Brett** · 10-31-2006, 01:02 PM

What is driving all this talk about inflation? Now that oil prices have dipped, housing has peaked and is on the way down, the Dollar is on an up trend, the deficit has been revised downward and interest rates have stabilized. Sounds like good news for consumers to me! What is it that I’m not understanding here??

**Birchtree** · 10-31-2006, 01:29 PM

The crowd is obsessing about the silly rent numbers that have been increasing. They will eventually settle out into moderation. Be in to win.

**ATCJeff** · 10-31-2006, 01:51 PM

Plus personal income and wages are rising.

Jobs report may show an uptick in new jobs created. Strong economy! I'm starting to lean towards a rate increase in the 1st Q.

**Quips** · 12-09-2006, 05:01 PM

Much of the talk concerns the trillions of US debt held by other nations. If some of that debt was dumped for repayment, well, it would be a problem.

If it didn't lead to a great increase in interest rates, then it would lead to an extremely weak dollar and much more expensive imports. Like being between a rock and a hard place.

If mainland China would allow its currency to float, it would help matters somewhat, but what is really needed is fiscal discipline in national government and less consumer debt.

Some financial analysts see no problem with the FOMC reducing interest rates once or twice next year since the economy is expected to slow, but that would lead to a weaker dollar and less real return for other nations holding/buying US debt.

**Brett** · 12-10-2006, 12:34 PM

I was just reading, I don't remember where, that the Dollar has lost 1/3 of it's value since 9/11. That is incredible!! If we had inflation, there would be no sanctuary for us TSP folks.

**Fivetears** · 12-10-2006, 08:32 PM

The other novel question is. "what will your TSP account buy when you retire?" All the more reason to learn to "work the system" offered to us.

Originally Posted by Brett

I was just reading, I don't remember where, that the Dollar has lost 1/3 of it's value since 9/11. That is incredible!! If we had inflation, there would be no sanctuary for us TSP folks.

**Quips** · 12-22-2006, 12:41 AM

The Fed has to be talking up inflation for fear of a falling dollar ... and the possibility of higher priced imports from every other country except China.

Some of the Fed governors may be worried about an increase in the minimum wage on the horizon too.

So some on the FOMC talk up the inflation fear to put talk about LOWERING rates on the back burner. It will depend on how the numbers shake out, but the market seems to be stalling a bit now. If the economy slows there will be pressure on the Fed to lower rates, and it it something many on the FOMC do not want to do.

**Birchtree** · 12-22-2006, 01:01 AM

Damn I do have the temerity to admit that does make sense. Good observations.

**Fivetears** · 12-22-2006, 01:36 AM

temerity \tuh-MER-uh-tee\, noun:
Unreasonable or foolhardy contempt of danger; rashness.
http://dictionary.reference.com/word...002/07/09.html

Birch, you have improved my vocabulary.

Originally Posted by Birchtree

Damn I do have the temerity to admit that does make sense. Good observations.

**Quips** · 12-22-2006, 11:29 AM

Yeah, it doesn't make sense. Real estate is going through a slump and commodity prices are sagging as well, yet some on the Fed talk up inflation.

**EW_ret** · 04-01-2007, 08:03 PM

This article really started me thinking about inflation in food prices. It sounds the alarm on possible increases in fruits and vegtable prices. It describes the decimation of our honey bee populations by a mysteroius disease. What if there were not enough bees to pollinate our crops?
The mysterious deaths of the honeybees

Honeybee colony collapse drives price of honey higher and threatens fruit and vegetable production.

By CNN's Amy Sahba
March 29 2007: 5:28 PM EDT

http://money.cnn.com/2007/03/29/news...ion=2007032917