Inflation picks up, thanks Ben
The CPI, as expected, increased in January by 0.4% while the core CPI rose by 0.3% and the only thing that comes to mind is…thank you Ben…and than there is housing…
Year-on year the CPI stands at 4.3% and the core CPI increased to 2.5%, which was the fourth consecutive increase in core inflation (The Fed doesn’t like to use headline inflation because they apparently live in a world where humans do not consume food and energy while to the rest of the population those two expenses may have the biggest impact on a daily base).
Of course he is not the sole reason why inflation will continue to post potential problems for consumers and the economy but he made sure that he delivered his part (things could turn worse as the rate-cuts will filter through to the economy).
Is it a surprise that inflation accelerated?
Not at all since different indicators screamed for an up-tick.
Yes, I forgot, the Fed thought that inflation would be kept under control but Bernanke also backs the ‘economic stimulus package’ and thinks that two plus two equals three so what else did you expect?
Don’t forget that he is extremely incompetent and has no experience at all when it comes to business and the economy. The only thing he can use to make monetary decisions is his more than outdated theoretical economical models which simply…do not work in reality.
What is even worse than the pick-up in inflation is that thanks to ‘Septic Tank’ Ben inflation is heavily embedded into the economic pipeline and every attempt to bring down those expectations is countered by Ben with a move that is less than sophisticated.
It is really terrible if you have a person who is in charge of something but has no clue whatsoever about how to manage the task but what is even worse is a person who has no idea but thinks that he has all the knowledge and skills necessary to succeed. Yes, it is funny but it really has a negative effect on the economy.
I know that if I have said it once I have said it a thousand times:
The harder you push to fight the markets the harder they will push back and the harder you push the economy the harder the economy will push back.
The CPI will definitely attract the attention of the Fed but don’t we just wish it would not because now you can expect more dumb things to happen. Bernanke, who hates the economy for one reason or the other, acts like a boxer who did not hear the bell and just continues to throw punches at the economy and the consumer.
Where is the referee?
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