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The Fed’s Spin on Inflation and the Fall of the Dollar

By: Ben Domenech (Diary)  |  March 4th, 2011 at 11:09 AM  | 

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the reality of inflation vs the Fed rate, the latest unemployment numbers and the fall of the dollar.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Current Inflation Rates: 2001-2011
Focus of US Fed remains on core inflation
Unemployment Report – February
U-6 Underemployment Rate – February
Why the Dollar’s Reign Is Near an End

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COMMENTS

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  • Death_of_the_Donkey

    It really isn’t there. The BLS has the average price of a gallon of milk at $2.86/gallon in January (http://www.bls.gov/cpi/cpid1101.pdf page 216). And for an anecdote, I just bought a gallon today at Meijer in Ohio for $2.29. I completely agree with Francis that food prices here are much less commodity intensive than in the developing world.

    As for other inflation, we must remember that the numbers are a weighted average based on what the typical American spends on each category (in percentage terms) of goods/services and thus food and beverage at 15% and gasoline at 4.7% just don’t have a huge impact on the overall numbers (obviously roughly 20% of CPI).

  • Death_of_the_Donkey

    I wrote a diary looking at the report and concentrating on the labor force participation rate (http://www.redstate.com/death_of_the_donkey/2011/03/04/another-good-jobs-report/), which shows that to some extent the boomers are having a material impact on the lack of growth in the labor force as a whole.

    I also have a concern about the Establishment Survey, as I am starting to believe that it isn’t capturing the job growth that may be occurring that we are seeing in the Household Survey (which was +250k this month). This could be a lag effect from new business formation/self-employment that the Establishment may have trouble picking up.

  • drfredc

    The Fed’s plan to print a bunch of ‘extra’ money (Quantitative Easy) just a BS coverup for what’s really is going on. The Fed is makes the assumption that there is ‘normal’ employment and if that were the case, about X dollars new wealth would be created. And this wealth would be cycled thru the guberment to support gubermint activities.

    So, to keep gubermint happy, the Fed just prints up X dollars in Funny Money to keep gubermint and those relying upon the gumbermint happy.

    What could possible go wrong?