More inflation pain on the way
MSN Money's Anthony Mirhaydari explains why the still fairly tame behavior of prices overall may soon change.
In the past few years, we've seen prices for food, fuel and health care go up, yet so far inflation has remained tame. Could this change soon? Should middle-class families expect to pay more for most goods and services?
In the video below, MSN Money's Anthony Mirhaydari explains why prices for necessities have been rising while overall inflation has remained low.
The pace of U.S. consumer price inflation increased by 0.2% in July as the cost of goods and services -- from tobacco to apparel and food -- went up. The uptick pushed the annual rate of inflation, as measured by the consumer price index, to 2% -- the Federal Reserve's target rate.
Meanwhile, U.S. producer prices were flat in July, a sign that inflation remains contained despite the continued rise in energy prices. The producer price index was up by 2.1% year-over-year.
Mirhaydari, however, is looking at the accelerating global economy and warns we could see rising inflationary pressures soon. From Europe exiting recession to increased U.S. factory production to higher oil prices, all these forces are starting to filter through to prices. Inflation could get much higher because of a number of factors he explains in the video.
The discussion about inflation, prices and what to expect next continues over at MSN Money's Facebook community.
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O.K., I've heard this term mentioned in this article "You have to have inflation to encourage growth". Huh? I'll tell you what encourages growth, it's spelt J-O-B-S!!! Here's the deal..., and this might be a little bit of a rant, and a tad off topic, but I'm getting really tired of listening to the talking-heads in the news media spill out bad economics and bogus reasons why thing are the way they are right now..
Back in the late 30's this country was just coming out of the great depression, poor as a church mouse, debt up to our ears, with WWII on the horizon. What did we do? The government went to big business and said we need 1,000 tanks by the end of December. Big business said, we don't build tanks we build cars, and beside that our people aren't trained to build tanks, nor do we have enough people to build them. The government said, "hire them, train them, you build tanks now"! And it was done. Following the war this country experienced the most prosperous 30 years of expansion and growth we've ever seen in our entire history. Mostly due to innovations in technology developed during that period. Yes, we had inflation, taxes were going up, and we still had a debt problem during those prosperous years, but guess what, nobody noticed? America was WORKING again and that was enough to encourage growth. So here's my point. Don't you wish just once, just once, our government today, would do something like they did back then. Not to control big business, we all know that's a bad idea, that's not my point here. But to have the balls to pass strict laws that say to big business, you hire illegal's you go to jail for a long time. Or, we're not going to stop from outsourcing, but if you do we're going to tax the hell out of your company. Or how'bout, we know your hesitant to expand your company, but if you do we will cut your taxes in half. There's your growth right there, jobs + prosperity = GROWTH, we already have the model, our fathers, mothers, and grandparent taught it to us a long time ago. And we "don't" have to go war to accomplish it, we just have to have a government that believes putting American's back to work, on their "own soil", will cure all our ill's. Trust me, prosperity and growth will not be far behind.
The poeple who define the measurement system are the ones most to gain from it. Inflation is low because they say so. Cant wait for my $10. box of wheaties and my $7. gallon on milk. thank God our healthcare costs will be going down under Odumbocare.
Do not look at the man behind the curtain!
Just keep tabs on what things you buy that you need and you will see inflation has been north of 5 percent for years now.
The government now has transportation as people riding bicycles as they have substituted costs of transportation to alternate cheaper things until now they are at everyone rides a bicycle now and eats dirt out of their back yards and uses old sheets and drapes for clothing.
Pretty much you can not rely on the "official inflation rate" they are merely lying to you.
However that said the future is going to very bleak after 2015 for all Americans rich and poor as the dollar will collapse as no one will be trading in it nor needing it. So that $600 iphone will jump in price to over $10,000 US dollars until dollars will not be used to buy them but yuan.
Pretty much it will be game over folks. No home , no car , no bicycle , no food , no nothing.
The fed should have only three jobs.
1. Maintain an accurate and honest CPI.
2. Keep the real inflation rate between a deflationary 1% and 0% inflation (no more inflation). This will increase the purchasing power of the consumer. Also, this will bring real earnings to saving. If, savers can earn real income on savings, interest rates will stay low. Also, it will increase the value of the dollar. This would move money to America (an estimate 5 trillion dollars).
3. Replace the fed with a computer program ASAP.
When inflation takes off and it will, it will destroy our economy. The consumer purchasing power is not increasing and inflation will eat it up.
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