Bernanke Dodges Real Inflation

In his appearances yesterday and today, Bernanke talks about his worries about inflation, but concludes that it is moderate and under control at the moment.  That may be true, especially when energy is factored out -- and even more true when the sluggishness in the housing market is factored in -- but the real inflation -- the one we live with daily -- clothing, food, AND energy -- is not in check and it is not under control. 

I am glad inflation remains Bernanke's "predominant policy concern" and that he is on the sub prime slime like a laser.  All that still doesn't give me comfort -- not when I go out to buy food, clothing my family and fill up the car.  You don't need to be an economist to know that inflation in those areas is raging and hitting us all hard, especially as salaries are set to the cumulative inflation rate, if they pay attention to inflation at all.

Food prices have risen unrelentlessly this year, replacing energy as a major source of inflation -- and that says alot.  Grocery prices have risen 8% already this year.  Ouch! 

All I can say is it is time for Bernanke to start feeling our pain and to make real inflation a tad more than a "predominant policy concern."

Two articles worth reading are:

http://www.nytimes.com/2007/07/19/business/19fed.html

http://www.nytimes.com/2007/07/19/business/19econ.html 

 

 

 

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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Comments

  • Anonymous

    July 20, 2007

    I just read an article on this site that milk prices have gone up substantially. That seems like a pretty important staple.

    I know they try to take out energy prices because they are so volatile. Still, the long-term trend with energy has been up.

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