Inflation at 17-Year High

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Posted on Aug 14, 2008

Stagflation: It’s always sounded like a dirty word, and is hopelessly tied to retro jokes about the ‘70s. But with GDP growth already, well, stagnant, the Labor Department announced Thursday that July saw the highest rate of inflation in 17 years, meaning you can now appropriately drop the word into water cooler convo without seeming like a potty-mouth or a retro hipster. On the downside, you are now paying 5.6 percent more for things than you did at this time last year.

From the New York Times:

Consumer prices were 5.6 percent higher last month than they were in July 2007, a brisker pace than economists had expected, the Labor Department said on Thursday.

That was the sharpest annual increase since January 1991, as Americans paid more for clothing, food, transportation and recreational products.

The news was distressing for investors and the stock markets initially fell on the report. The major exchanges recovered, however, and the Dow Jones industrials up more than 80 points in early afternoon trading. Investors returned to buying financial stocks, taking advantage of a sector that has fared poorly in recent sessions. The broader S.&P. 500-stock index was up 0.46 percent. Wal-Mart also reported a better-than-expected rise in quarterly profits, but the discount retail giant also issued a gloomy sales forecast for the rest of the year. In addition, crude oil prices continued to fall, dropping below $113 a barrel.

The overall Consumer Price Index, considered the benchmark gauge of domestic inflation, rose 0.8 percent in July. Economists had forecast a rise of half that rate. In June, prices rose 1.1 percent, the second highest monthly pace in 26 years.

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TAGS: economy federal reserve inflation interest rates stagflation stock market the fed wal-mart

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By yellowbird2525, August 15, 2008 at 10:59 pm #

folks: stop paying your taxes; if you THINK the Gov has LIED or MISLEAD the people; or abused the Indians, the vets, the people: draw the line; STOP paying taxes; you are NOT a slave! YOU have my permission to declare your freedom from the most corrupt system on the planet! If you ever even THOUGHT the USA was “good” answer me this: WHY would any “good” country bring over top Nazi’s to learn from them: set them up handsomely they did: HOW did they do it? HOW were they caught? and HOW did they get away with it when their were so many more people than THEY had in their army & Gestapo units? AND folks: THOSE are all in operation in the USA today & have been for a very long time now.

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By samosamo, August 15, 2008 at 10:23 pm #

Yet this economy is still running strong with our vast manufacturing base and high levels of exports going out to other countries where the demand is extremely high for our cluster bombs, missile defense programs, munitions, fighter air craft(slightly outdated)and our pre-emptive wars. Strong, strong economy. Oh forgot our most prized export, democracy! Lots and lots of countries gobbling this up. Maybe we will export some brittneys, paris’  and other important celebrity statespersons. Can’t be hoggin all of that now, can we? Forgot another biggie, palettes of billion of billions of US dollars. High high demand for this and we will even put and extra printer on line to keep up with the demand for this strong currency.
After all, there is nothing better than buying ‘loyalty’.

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By cyrena, August 15, 2008 at 12:48 am #

Blue Eagle..

Thanks for the info and the links; I think.

I pretty much had already figured this out, even though I will never claim anything more than a basic common sense knowledge of economy.

Still, the charts just certainly do leave no room for confusion, eh?

And yeah, I knew we were on the way to becoming a Zimbabwe too. That’s a given with any Kleptocracy.

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By BlueEagle, August 14, 2008 at 6:30 pm #

And the government (Labor Department) is telling you the truth; they always do. In reality inflation is closer to 10%. Check out http://www.shadowstats.com/

The Labor Dept. just changes how they measure inflation to satisfy the Federal Reserve Bank’s needs. Some great charts, graphs and history are found here: http://mwhodges.home.att.net/inflation.htm

Fiat money systems never survive and neither will the Federal Reserve Note (FRN). What we have in our wallets today is just an IOU a piece of paper; it is not a real dollar. Nixon killed the real dollar in 1971, when he came off the gold standard.

Real money is gold and silver as you can see it takes about 14 FRNs to exchange for one silver dollar (an ounce of silver) and it takes about 800 FRNs to trade for a 20 dollar gold piece (one ounce of gold).

Nothing stops the Federal Reserve from printing more money and with $53 Trillion in unfunded liabilities there is only one way the government (through the Fed) will pay for all of them - printing more FRNs. Foriegners won’t borrow forever and you can only tax citizens so much. Go check out the movie I.O.U.S.A., which will help explain that if you are holding FRNs (US Government IOUs) you are going to get wiped out.

US is $53 Trillion in the hole: http://www.npr.org/templates/story/story.php?storyId=93473087

Zimbabwe can happen in the US. Hold tight… it’s gonna be a wild ride.

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