Higher Oil Prices Do Not Mean Inflation?!?!?
March 15, 2011 7 Comments
BECKLEY — Today the Federal Reserve stated, ”Long-term inflation expectations have remained stable, and measures of underlying inflation have been subdued.” I define inflation as a general and progressive increase in prices. I’m not sure what the Fed’s definition of inflation is but let me share a couple of charts:
Notice a familiar trend with those charts? I would call that a general and progressive increase in prices. Our overlords at the Federal Reserve call that “stable and subdued”. Of course I could have gone on with all the commodities I actually track and invest in like corn, wheat, soybean, live cattle, lean hogs, coffee, cocoa, sugar, cotton, orange juice, platinum, gold, silver, copper, natural gas, oil, and heating oil. Guess what they all have similar charts – take gold and silver for example – through the roof. Silver is up over 70%+ this year alone! This is stable and subdued, it’ll be interesting when it gets out of hand. I can see it now, “Silver up over 700% in the year alone!” I guess then the Fed might consider cutting quantitative easing. I was reading how our interest payments on our government debt were up over 12% in the first quarter of this year to over $100 billion. I wonder what our interest payments will look like then?