Fox: "Inflation Seen Jumping 2.5 Percent "

[Bush_Eats_Beef]

http://www.foxnews.com/story/0,2933,120748,00.html

"WASHINGTON — Fed by escalating energy prices and a rebounding economy, inflation will pick up more this year than previously thought, a group of economic forecasters says.

In its latest economic outlook, the National Association for Business Economics estimated that inflation, as measured by the Consumer Price Indexwill rise by 2.5 percent in 2004. The index is the government's most closely watched inflation barometer.

If the new projection being released Monday should prove accurate, it would mark a sharp jump from the index's 1.9 percent increase in 2003 and would represent its largest increase since a 3.4 percent advance in 2000."

"Some companies, which have had to keep a lid on price increases during the economic slump, are finding it easier to raise prices in a rebounding economy."

[swag]

1. I'm glad I'm long in Inflation-indexed bonds

I only wish the CPI calculations were more honest.

[On the Road]

4. What are Inflation-Indexed Bonds, Swag?

Hadn't heard of them. Do they have a market symbol so I can check them out?

[Jackpine Radical]

5. Check into Series I savings bonds.

I believe their interest rates are variable and pegged to inflation.

[swag]

7. Inflation-protected bonds come in a couple of different flavors

http://www.oregonlive.com/business/oregonian/julie_tripp/index.ssf?/base/business/1085141451238930.xml

Julie Tripp has a good article about both TIPS (never hold these in a taxable account, by the way) and I-bonds (www.savingsbonds.gov), and I think she describes the pros and cons of each pretty well.

VIPSX is a decent way to hold TIPS in a mutual fund, again preferably in an IRA or 401k.

Good luck, Ribo. A lot of pundits have turned on both TIPS and I-bonds lately, but what matters to me is meeting my financial goals.

[On the Road]

9. Thanks, VIPSX Helps

not looking to buy any BTW. Especially not now. But the symbol helps to find source material. Interesting.

[ALago1]

2. A lot of this inflation is probably due...

...to government spending in regards to the War and the ensuing occupation. Such a huge stimulus in aggregate demand has that effect on the economy.

[mistertrickster]

3. "Rebounding economy" what a crock of horse dung . . . who have

you talked to lately who thinks we're in a "rebounding economy" besides kool-aid drinking Bush economists?

Big oil companies may be loving things, but nobody else is. Nobody else is making any real money in this economy. To main street, USA, it feels like we're in a recession.

And what does doubling gas prices do to anyone who commutes a goodly distance to work, who ships things, or travels to make sales? What's it do to truckers and airlines?

More faux news from Fox.

[Mattforclark]

6. Time to slam on those monetary brakes?

What a pity, just before the election. :shrug:

I wonder how independent the FED is.

[swag]

8. I think we'll have a .25 - .50 bps rise at the Fed June Meeting

and possibly a more drastic one in December.

My June bet seems very safe to me.

[AspenRose]

10. Business Week article on the Working Poor

It's the cover story this week:
http://www.businessweek.com/magazine/content/04_22/b3885001_mz001.htm

(With sidebars on how college-qualified, low-income (below $25 K) high school grads are finding it difficult to go to college, and "The Wal-Mart Effect.")

These articles will break your heart...and then piss you off.

"One in four workers earns $18,000 a year or less, with few, if any benefits. What can be done?"

For starters, don't "re-elect" Bush*.