Michael Fitzsimmons

Energy, Inflation and the U.S. Dollar

yuman: yes, what you say is correct. however, the rationale behind a "core" inflation number was dreamed up back when energy and food had short term fluctuations that the economists supposedly want to dampen out. that is an outdated way of looking at inflation now that both energy and food have been on multi-year sustained uptrends. i totally agree with Barry Ritholtz: the government is reporting "inflation without inflation". my suggestion is we go with a straight inflation number that includes energy and food. with the monetary woes the US has with its twin deficits and currency crisis, the least we can do is face the real facts. as with the energy crisis, as long as we stay in denial, the more dire the consequences when reality hits us in the face.