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Friday, January 16, 2009

I don't get it ....

Why would slow inflation be a bad thing? I would think it would be a good thing ... more bang for your buck and all.

Inflation slows to half-century low in 2008 - Yahoo! Finance:
"The Fed has dropped benchmark interest rates virtually to zero and with little firepower left on that front, is concentrating on pumping money into troubled credit markets to try to restore lending, hoping to spur activity and beat back incipient deflation risks.

Core prices, which exclude food and energy items, were flat for the second month in a row in December. On a year-over-year basis, core inflation rose 1.8 percent, the smallest increase since December 2003 and still within a range Fed officials would be comfortable with."
Thinking back to 2003, we had a pretty good year. The price of corn did go up though, I think it was the first year we went to $3/doz ...

but the problem I have, or maybe I just don't understand it, is that in one sentence they say that core prices were flat but in the very next sentence they say it rose, even if just a little ... is it any wonder that the public is leary to spend.

Further more I always thought that pumping more money into the market would actually devalue the US dollar, and then it would effect the world market even more.

I still think the troubles all started during the Democratic campaign when they kept harping how bad things were -- the made people stop purchasing ... they did nothing to bring down the cost of gas - in fact they were talking about raising the gas tax, as well as other taxes.

but then too, a lot of this can get traced back to the funny-accounting practices that took down companies like Enron ... left over from the Clinton era ... only now we are seeing just how many companies have really been operating this way.

also the banks wouldn't be in the trouble they are in if Carter hadn't forced banks to loan money to people who couldn't pay it back ... while I agree that home ownership should be availabe for anyone - I think a person needs to keep a reasonable idea in their mind when they look too.

oh well, hind sight is 20/20 ... it will be interesting to see what happens ... I'm thinking that now that the dems are in full control there will suddenly be a 'magic pill' which will pull us out.

Just wait -- not long after Tuesday we will start to see reports saying how good things are going ... within the first 100 days ... just wait.

Well either that ... or they will say we are in a new Depression and the blame will go to Bush -- oh wait -- they are already doing that.

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