Inflation at 4% Thanks to 17% Increase in Energy Costs
The core CPI, which excludes food and energy, was 2.4%. This is the inflation rate that is watched by the FOMC when it decides at its monthly meetings whether to raise the Fed Funds Rate. Since April 2006, core inflation has remained within the 2.2 - 2.4% range, slightly higher than the unofficial targeted inflation rate of 2%. Unfortunately, the Fed must continue to lower interest rates and pump liquidity into the financial markets to avert a financial melt-down caused by the Banking Liquidity Crisis.
What It Means to You
As mentioned earlier this week in The Great Inflation Cover-Up?, it basically means you need to protect yourself from stagnant economic growth AND inflation in food and energy costs.
The BLS inflation calculator translates inflation into concrete terms. It really hits home when you realize that you need a 4% raise just to stay even.
Comments
Can you say speculation?
Tighten the margin requirements on oil contracts and watch the price per barrel drop by half.
Also, start pumping discount oil from Iran to the US. We “freed” you now return the favor. If they don’t want to, use the US military the correct way and take it by force.