According to the US government, the wholesale inflation rate (producer prices, rather than consumer prices) dropped 2.8 percent in October. This is a good thing for Americans and American families, who are having trouble enough with limited credit and worsening job opportunities. However, the inflation drop is almost solely in the area of energy. Excluding energy (and food) the inflation rate rose at the same rate as it has for the past year or so, which is to say, at a rate that is not so good for Americans and their families.
Let me state the following clearly: the problem of inflation is still central to America's future. Certainly, if the reduction in the cost of oil continues, inflation will continue to be moderate. But if oil rises in price, inflation will then be through the roof. Will oil prices rise? In time, almost certainly. My guess is this: The next year or two will see a recession for oil-consuming countries like the US, and the cost of oil will stay somewhat low. As soon as the recession is over, however, the cost of oil will skyrocket again, perhaps this time for good. In anticipation of future events, we have got to figure out alternative sources of energy that lessen our demand for oil, thus keeping its price as low as possible.
Very few economists concern themselves with inflation. I think we are fools to believe them. The future of the dollar is very perilous.
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