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And, yes, I DO take it personally: Here it comes, the next big story - U.S. inflation
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Tuesday, January 15, 2008

Here it comes, the next big story - U.S. inflation

i was largely non compos mentis during the last period of serious inflation in the u.s. in the early and mid-70s... yeah, i knew it was going on and, yeah, i knew it was a problem, but i honestly either don't remember or perhaps didn't experience much of a personal impact... contrast that with my more recent experience in argentina, which has been trying to grapple with what government figures declare is a 9% inflation rate, but my first-hand, on-the-street experience of watching prices rise literally before my eyes tells me is at least 12% percent and maybe even as high as 19%... so, if WHOLESALE inflation in the u.s. for ALL of 2007 is 6.3 percent, you have to believe that, with the recent steep rises in food and basic commodity prices, the real personal impact is a minimum of several points higher...

i had an experience with u.s. inflation just this past sunday while i was perusing the menu prices at a down-scale, storefront, strip mall, family-run, mexican restaurant, usually the very best bet for value... the average entree is now 25% more than last year at this time, and a full 60% more than early 2003...

Wholesale inflation shot up in 2007 by the largest amount in 26 years even though falling gasoline costs allowed price pressures to moderate in December.

The Labor Department reported that wholesale inflation was up 6.3 percent for all of 2007, reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.

The year ended on a more positive note, with wholesale prices falling by 0.1 percent in December. That reflected decreasing costs at the time for gasoline and other energy products. It was a significant slowdown after prices had soared by 3.2 percent in November, which had been the biggest one-month increase in 34 years.

Meanwhile, the Commerce Department reported that retail sales fell by 0.4 percent in December. It was a worse-than-expected decline and increased worries that the country could topple into a recession.

i've noticed the decrease in gasoline prices and am at a loss to explain why... mexico recently announced that it will cease to ship crude to the u.s. west coast, opec claims it is operating at peak capacity (but george is still asking for more), the u.s. is on the outs with venezuela and iran, and more than 300,000 barrels of oil are missing from the u.s. strategic petroleum reserve, so why are gasoline prices coming down...?

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