[Dems2008] Re: Falling dollar >> inflation (e.g. crude oil]

I'm sorry Mark but your emphasis is wrong again; the deep discounting that is happening at the retail level among vendors of discretionary consumer items is not a good sign; it is a further sign of the retrenching consumer who is tapped out.

 Our savings rate is now less than ZERO, and our installment credit levels are at levels never seen before.

At the same time, our weakened dollar is resulting in higher prices of imported goods.  As the Fed itself has made clear in its own minutes (most recent released this past week) INFLATION remains a concern, BUT the larger fears of a credit meltdown and a major league slowdown in economic activity outweigh those concerns short-term. 

The glass is not half full; rather, it is half empty.

--- In Dems2008@yahoogroups.com, "mmshlevi" <mmshlevi@...> wrote:
>
> The headline rate including food and energy was 4.1 percent.
> But, since the core rate was was relatively low (2.6%), it gave the
> Fed the leeway to cut rates.
>
> Inflation has been mitigated by high gas prices. this is because the
> consumer has less disposable income and can buy less goods. This
> creates a downward pressure on consumer good prices (less demand =
> lower prices). Also, the housing slump has dampened consumer spending.
>
> Martin
>
> --- In Dems2008@yahoogroups.com, "citation502" citation502@ wrote:
> >
> >
> > "core" inflation EXCLUDES food and energy, and might be an accurate
> > measure if we did not eat or consume energy. It ignores for example the
> > rise in gasoline, heating oil, wheat, corn, milk, etc., etc. We don't
> > LIVE core inflation; we live actual inflation; and hence the Fed itself
> > has stopped using core as it measurement.
> >
> >
> >
> > --- In Dems2008@yahoogroups.com, "mmshlevi" <mmshlevi@> wrote:
> > >
> > > Core inflation rose by 2.4 percent for all of 2007, down slightly from
> > > a 2.6 percent increase in 2006.
> > >
> > > These are number from the Federal Reserve -Check them out.
> > >
> > > This is why the Fed has cut the Discount rate. It would not have if
> > > inflation a problem.
> > >
> > >
> > > Martin
> > >
> > > --- In Dems2008@yahoogroups.com, "citation502" citation502@ wrote:
> > > >
> > > > Mark, excuse me, but I won't respond further to your posts. You just
> > > > make things up.
> > > >
> > > > --- In Dems2008@yahoogroups.com, "mmshlevi" <mmshlevi@> wrote:
> > > > >
> > > > > I thought someone would bring up the price of crude oil. Crude oil
> > > > has
> > > > > been rising at double digit rates for over two years.
> > > > >
> > > > > Guess what? inflation has remained low the entire time. Core
> > > > inflation
> > > > > has remained at around 2% despite the rise in crude price. The
> > > > > inflation fear mongers have all been wrong.
> > > > >
> > > > > The Fed has validated this because it has lowered interest in face
> > > > of
> > > > > rising oil prices. The Fed would not do this if there was
> > inflation.
> > > > > Paul Volcker raised interest rates in a recession and inflation
> > > > period
> > > > > in '79, so don't think it isn't possible.
> > > > >
> > > > > Martin Levi
> > > > >
> > > > >
> > > > > --- In Dems2008@yahoogroups.com, Citation <citation502@> wrote:
> > > > > >
> > > > > >
> > > > > >
> > > > > > The chief near-term impact of a weak dollar is the
> > > > > inflation impact. The most-obvious recent example is the price of
> > > > > crude oil, now bordering on $100 bbl. Crude oil is priced in U.S.
> > > > > dollars worldwide, and it is not happenstance that the rapid
> > descent
> > > > > of the dollar in the last year has coincided with crude oil
> > running
> > > > > from the mid-$60s to near $100. The chart on the dollar is almost
> > a
> > > > > perfect inversion of the chart on crude oil.
> > > > > >
> > > > > > Most who follow those markets will agree that perhaps $25-30 in
> > > > > the price of a barrel of crude is a direct result of the
> > devaluation
> > > > > of the U.S.DOLLAR.
> > > > > >
> > > > > > http://tinyurl.com/34oxv9
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > ---------------------------------
> > > > > > Never miss a thing. Make Yahoo your homepage.
> > > > > >
> > > > >
> > > >
> > >
> >
>

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