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buffalonate (93.78)

Inflation IS Not Bad

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April 26, 2011 – Comments (4)

Many people are pouring into gold and silver because they think that inflation is severe.  I believe that the inflation fear is being oversold.  The federal reserve has cpi at about 2.5% for this year.  There are many economists who prefer to follow the volcker method of inflation calucation.  They said that using updated methodologies they believe inflation is around 5%.  The Walmart CEO recently said that their company believes that inflation is around 5%.  Walmart should know what inflation is considering how huge a part of the economy they are.  Some people are also trying to say that food prices are out of control.  In 2010 food inflation was .8% the lowest amount of inflation since the 1960's.  This year the FDA is predicting inflation is between 3.5% and 4.5%.  http://www.bloomberg.com/news/2011-04-25/usda-retail-food-inflation-forecasts-for-2011-text-.html  There is obviously an inflation problem but it is not serious at this point. 

Some people also tell you that gold and silver are a great store of value.  The problem with that argument is gold is mostly used for speculation.  For example this morning silver prices dropped 5% on the fear that the federal reserve was meeting and they might raise interest rates.  That hardly seems like a safe store of value to me.  Some people think that the whole system is going to collapse and you have to own gold and silver as a store of value.  I think a basement full of canned food and guns is a more useful store of value. 

4 Comments – Post Your Own

#1) On April 26, 2011 at 10:26 AM, TDRH (99.65) wrote:

Good luck with that.  CPI from the government has no meaning.  Not sure where you are shopping or buying gasoline, but inflation is real.  Not encouraging speculation in precious metals.  

http://www.shadowstats.com/

 

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#2) On April 26, 2011 at 12:36 PM, ajm101 (31.89) wrote:

You've got a long lonely road ahead of you here with that kind of clearheadedness and common sense.  It's a lot easier to just repeat, 'gold is money', 'tax is confiscation', and 'currency debasement'.

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#3) On April 26, 2011 at 5:43 PM, TMFAleph1 (94.91) wrote:

@ajm101

Ha ha ha... Excellent!

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#4) On April 26, 2011 at 6:36 PM, MegaEurope (< 20) wrote:

If you believe that real average wages have declined 70% in the last 30 years, I have a bridge in Brooklyn to sell you.

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