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Posted by John Galt on July 28, 2008, 12:11 am
>>
>>>
>>>
http://www.creditwritedowns.com/2008/07/has-inflation-damage-already-been-done.html
>>>
>>> Credit Writedowns
>>> Has the inflation damage already been done?
>>>
>>>
>>>
>>> As I write this, crude oil is well off its high of $147.50 on July 11.
>>> We are all eager for some sustained relief in the oil price. However,
>>> the right question at this point is: has the damage already been done?
>>>
>>> First, consumer inflation for June 208 in the U.S. was 5.0%. This was
>>> the highest reading since May 1991. I have calculated that even if
>>> inflation ticks up just 0.1% per month over the next two months, the
>>> August reading will be 5.4%.
>>
>> If crude oil is well off it's high, then gasoline will follow, and
>> inflation will be just a tad about zero. The rest of the article is,
>> then, just words written by somebody trying to justify a paycheck.
>>
>> JG
>
> LOL! There seems to be quite a few of these reporters around these days
> "trying to justify a paycheck". The inflation genie is not going to show
> up. Everyone fears inflation but there is nothing wrong with some
> inflation that occurs with global economic growth. It's when you have
> inflation when no growth that is a killer.
>
> Fred
Sure. One of the guests on Kudlow Friday mentioned that if you take
financials and homebuilding out of the equation, the firms remaining were
showing like 7.5% average earnings growth year over year.
Then, you have these morons running around claming there's going to be
economic nuclear meltdown. The fins and the builders will stabilize as soon
as housing prices do. Just erasing those negatives (they don't even have to
grow) and we're back to healthy GDP growth.
And....(just to head the inevitable chicken littles off at the pass) the
above is NOT an optimistic, best case analysis. It's simply looking at the
data as it is.
JG
>
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