tag:blogger.com,1999:blog-7464708.post6693226137254582505..comments2024-03-22T06:05:36.544-04:00Comments on Kids Prefer Cheese: Dear Ben: Do something bold tomorrowMungowitzhttp://www.blogger.com/profile/02340064320347875601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7464708.post-19939944707308659232007-09-18T23:49:00.000-04:002007-09-18T23:49:00.000-04:00Hi Angus, thanks for the response. I am not trying...Hi Angus, thanks for the response. I am not trying to be difficult, but isn't the core inflation over last seven months 2.3 percent, compared to 2.6 percent in same period of 06? The figure you cite is driven entirely by energy prices, which are in turn largely driven by the weaker dollar and demand factors. So, isn't this a deceleration of inflation?<BR/><BR/>What am I missing here?<BR/><BR/>Also, I see your point re the 70s, but am not sure that's the right analogy. Seems like we always try to fight the last war. Yet, we are not in a oil shock world; we are in a financial system freeze world. Hence, why isn't 1929 a useful analogy? That sure seems to be the one that Bernanke holds dearest and has some obvious parallels.<BR/><BR/>Finally, might a little inflation be a reasonable risk to accept to avoid wider disruption in the financial system? Do we need to be so Andrew Mellon here?<BR/><BR/>Maybe you could blog on the Fed's decision and elaborate on what you think about its likely impact. As I said, not trying to be difficult, just trying to understand where we are headed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7464708.post-24125632184932350502007-09-17T23:12:00.000-04:002007-09-17T23:12:00.000-04:00Hi. thanks for your comment. as to "what inflation...Hi. thanks for your comment. as to "what inflation"? from the link you posted comes the following:<BR/><BR/>"During the first seven months of 2007, the CPI-U rose at a 4.5<BR/>percent seasonally adjusted annual rate (SAAR). This compares with an<BR/>increase of 2.5 percent for all of 2006."<BR/><BR/>That's inflation, innit? I don't think there is any risk of deflation near term nor have I seen/heard anyone claiming a deflation risk.<BR/><BR/>If commodity prices and energy prices are rising, the dollar is falling and the Fed eases policy, when unemployment is well below 5%, that to my mind is a step on the road back to the 1970s.Angushttps://www.blogger.com/profile/03656436431053306500noreply@blogger.comtag:blogger.com,1999:blog-7464708.post-16650659643435461102007-09-17T21:20:00.000-04:002007-09-17T21:20:00.000-04:00What Inflation?ftp://ftp.bls.gov/pub/news.release/...What Inflation?<BR/>ftp://ftp.bls.gov/pub/news.release/cpi.txt<BR/><BR/>The Fed's job, in so far as it is restricted to considerations of price stability, is price stability.<BR/><BR/>Given current conditions, isn't the risk of deflation at least as great as the risk of inflation?<BR/><BR/>If you think not, why do you believe we face a serious risk of inflation?Anonymousnoreply@blogger.com