One worry I don't have
I'm so not worried about inflation.
And it's not because I believe Federal Reserve Chairman Ben Bernanke in this morning's Wall Street Journal.
It's because the signs all around are pointing the other way, for some time to come.
Others think so too.
Try these articles from SmartMoney.com:
http://tr.im/tkM8
You'd have zero sense of history to think the Fed has lost all sense of how to fight inflation and the importance of the battle. I mean, we've been there. Not that anyone needs to have lived it, but its legacy is huge and respected and economists learned from it.
You can go through two days of Bernanke testimony, if you can make it to the end of it all, and you won't get much more than what he said in today's column: We have tools to fight inflation and we'll use them. When the time comes. But it's not now.
Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.
Comments
We do not control the price of oil. As long as we don't we will be vulnerable to inflation. We need to get to energy independence to control inflation.
Posted by: stephen | July 21, 2009 11:44 AM
When we are oil independent how much will we pay other countries for oil if we lose a quarter of our production like we did after hurricane Katrina. There no way to be truly independent.
Posted by: nolemmings | July 21, 2009 11:43 PM
I see the author hasn't visited a grocery store recently.
Inflation is alive and well.
Posted by: Tim | July 22, 2009 10:27 AM
The problem is that people use oil as a way to hedge against inflation instead of something else like gold. Can anyone give me a good explanation as to why oil almost doubled in price during the last quarter? Of course not it was just sheer lunacy.
Posted by: Nick | July 22, 2009 11:48 AM
I do not trust the fed. Inflation is inevitable. Too much money is being printed, oil and the stock market are up.
Posted by: Jay | July 26, 2009 5:31 PM
Monetary policy is not an exact science and it is not quick acting. Fed policies shifts are like changing the rudder on a super-tanker, 5 miles after you turn the rudder the boat starts to change course. This is why we need to worry about inflation now, after inflation is on fire (CPI/PPI) it is too late to plan/adjust (think changing the rudder after hitting the dock). Energy (oil++) is adjusted out of the CPI/PPI thus the term "core" inflation. Plan for inflation now and you won't be surprised when it happens. Almost zero real interest rates are an anomaly that are not going to be here forever.
Posted by: G | August 9, 2009 7:41 AM
Let me put it another way, you don't start preparing for a hurricane after it makes land fall.
Preparation and analysis to your exposure to inflation is best done far in advance.
Investigate ibonds, TIPS, and know the bond duration of any fixed income investments you have, look at natural resources oriented investments (not gold).
If we have a repeat of the 1980's (and Obama's policies are looking a lot like Carter's) then inflation and high interest rates could become a reality again.
I don't buy the argument we have seen it before so it won't happen again.
Sounds like the bull you hear about business cycles not happening...they happen the problem is human comprehension of time and history is challenged, we have a bias toward recent history.
Posted by: G | August 15, 2009 5:00 AM