It's Still The Economy, Stupid

Monday, May 03, 2004  

Oil at 13 year high.

posted by Anonymous | 2:18 PM |

Sunday, May 02, 2004  

The Return of the 70's

Stirling Newberry writes for BopNews and is an advisor to the Jim Newberry campaign. The opinions expressed here are his own.

Shoppers deserting supermarkets and going to discounters.

This is the 1970's political pattern - consumers pressure for lower gas prices, and then use "shopping around" to keep other prices low, since it is less political cost to keep one commodity - gasoline - down. This sign, that inflationary expectations have now been built into the economy, means that we are in the last phases of this recovery. At this point the fed will have to tighten to reach a "soft landing" or reignite full blown inflation. This is because energy inflation is the source of general consumer inflation.

What this means is that the very thing that consumers are doing to deal with inflation - overconsuming gasoline - is going to drive more inflation in the long term.

posted by Anonymous | 2:36 PM |