Per the Economists, Inflation Isn't That Big of a Deal
Most economists in the latest Wall Street Journal forecasting survey agree with the Federal Reserve that severe inflation pressures are "transitory" and price increases will be more moderate through next year.
"The recent pace [of inflation] can't be sustained, but food and energy will continue to rise," said Stephen Stanley of Pierpont Securities.
On average, the 55 economists, not all of whom answer every question, expect inflation to moderate through 2012. The Labor Department reported Friday that consumer prices increased 3.2% from a year earlier in April mostly due to higher food and energy prices. Economists expect that rate to throttle back to 3% by the end of this year and remain below 2.5% through 2012.
The majority—36 out of 52 economists responding—said the upswing in food and energy prices would be temporary. While they expect oil prices to remain elevated from last year's levels, they forecast that the rapid increases seen earlier this year weren't likely to be repeated. "We think any further rise in commodity prices will be small," said Bruce Kasman of J.P. Morgan Chase.
The problem with this is that these same economists also believe we will see growth accelerating later in the year. To me - a reasonable human being who is paid in and uses U.S. dollars to put food in my mouth and gas in my car but who does not have an econ degree - "growth" is translated into inflation. Most of the world's resources are finite with the exception of fiat money (assuming, of course, that we could never print so much that we'd run out of cotton to print it on) and how exactly do we grow? On the back of our current money supply, naturally.
But what do I know, I'm just a lowly old hipster with a Fed fetish.
Head over to the comments section of the article above if you want to see some awesome disinfo artists at work among the ignorant slobs. See if you can spot them rubbing elbows with the unwashed masses, isn't hard to pick them out of a crowd.
As always, a more realistic reflection of actual inflation may be found via Shadow Government Statistics.