Friday, January 13, 2006

Sound Economics?

Wholesale Inflation and Retail Sales Climb
Published: January 13, 2006

The 5.4 percent increase for wholesales prices for all of 2005 followed a 4.1 percent 2004 increase. Both gains were the biggest since a 5.7 percent rise in 1990, a year when Iraq's invasion of Kuwait sent global energy prices soaring.

The Above Quote is the heart of the article, yet the article followed by the other Services and Newspapers, talks about the small rise in the Wholesale Core Inflation. It sounds good, and is a good lie for the Stock Markets, but Business is still paying the 5.4% increase for their Supplies and Products. No matter what the level of Core Inflation, Retail prices will begin to reflect the increase in business costs.

This Author, more than Anyone, believes that the Fed should cease raising Interest rates; he thinks 3.74% for the Overnight rate is the desired ending point. This assessment, though, is based on his perception of the limitation of power and influence of Rates to curb Inflation, combined with his perception that high Interest rates retard Business profits of marginal industries. Fed, Economist, and Investor should all stay will the realistic. lgl

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