The Hope & Change Yo-Yo. It's Beginning To Look A Lot Like BOOOOOOOSH!

[Obama 2012 1,714]

Hell, we all thought it'd be Carter's 2nd term! It's Bush's 3rd term!.

Let's hear it for "W"!

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http://money.cnn.com/2011/05/13/news/economy/cpi_inflation/?section=money_latest

NEW YORK (CNNMoney) -- Inflation accelerated to its fastest annual pace in two and a half years in April, as surging gas prices continued to hit American consumers.

The Consumer Price Index, the government's key inflation measure, rose 3.2% over the last 12 months ended April 30, according to Friday's report from the Labor Department. It was the biggest 12-month jump since October 2008.

More than half of the increase was due to rising energy prices, the government said.

Gas prices alone surged 3.3% in April, and are up 33.1% over the past year.

Meanwhile, food prices rose 0.4% during the month, or 3.2% over the last 12 months.

Both gas and food are prone to volatile price swings, often due to weather disruptions and geopolitical conflicts abroad. During the last few months, both have surged due to uprisings in the Middle East, damaged agricultural crops and increased demand during the economic recovery.

That's why most economists and the Federal Reserve often look at the core CPI, which strips out gas and food, as a better indicator of long-term inflation.

Core-CPI was up 1.3% from a year ago, in April -- the largest year-over-year increase since February 2010.

That rate is considered well below the Fed's target rate of 2% a year, and economists take some comfort in a low core-CPI as an indication that long-term inflation is not a major threat to the economic recovery.

Plus, commodities including oil have started to fall recently, indicating that the rise in consumer prices may be near its peak.

"I don't see inflation as running at high enough levels to threaten the recovery, especially now that we're seeing signs that gasoline prices have peaked," said David Resler, chief economist at Nomura Securities. "If that proves to be the case, we can all breathe a little easier."

Monthly data: Overall, prices jumped 0.4% in April, in line with forecasts from economists surveyed by Briefing.com.

Core CPI rose 0.2% during the month, surpassing economists' forecasts, which called for a 0.1% tick higher.

[Vi-Jay 218]

Energy cost is the main driver of inflation.

It doesn't take a rocket scientist to understand.

Edited May 13, 2011 by Vi-Jay

[Obama 2012 1,714]

Energy cost is the main driver of inflation.

It doesn't take a rocket scientist to understand.

actually, it's the dollar more than anything else.

when the value of the dollar goes down (i/e - less people are investing in it) then it causes a 'panic' among investors to put their money into something more stable. It's the reason why the price of gold is what it is.

The unfortunate consequence of this, is commodities are used as a 'stablizer' for investors as well as long as the value of the dollar is low. People invest in oil, because they know it's an important asset and will retain some value when the dollar doesn't have value. The problem with this is, when people invest in an item, its value goes up. When it's value goes up, so does the cost on everything related to that item. In the case of oil, that just so happens to be our fuel.... Then of course, we see the consequence of fuel prices going up.

So while investors are playing it 'safe' due to the dollar being devalued, everyone else gets royally screwed.

[Vi-Jay 218]

I agree that the value of the Dollar has alot of influence on the price of oil.

It's the chicken or the egg.

Go check the trend of the commodity index from 1976-1982. Analyze the multiple index impacting events preceding that trend.

[Mr. Big Dog 10,747]

I agree that the value of the Dollar has alot of influence on the price of oil.

It does. The real culprit would appear to be speculation, though. The Exxon CEO said as much yesterday when asked what the real market price for a barrel of oil (w/o the speculative bubble this commodity is riding on right now) would be. He said it would be $60 - $70. That means that between 30-40% of the current oil price is speculation. So, approximately $1.50 of the $4.00 a gallon you currently shell out at the pump goes to Wall Street. Call it the commodities casino tax that you pay even though you're not invited to play.

[Obama 2012 1,714]

It does. The real culprit would appear to be speculation, though. The Exxon CEO said as much yesterday when asked what the real market price for a barrel of oil (w/o the speculative bubble this commodity is riding on right now) would be. He said it would be $60 - $70. That means that between 30-40% of the current oil price is speculation. So, approximately $1.50 of the $4.00 a gallon you currently shell out at the pump goes to Wall Street. Call it the commodities casino tax that you pay even though you're not invited to play.

Yeah. I've said we shouldn't be happy until it gets back down to that level.

Though I've seen a few economists who say the 'real' value is somewhere down closer to $40 a barrel still.

The oil industry would not like that too much though.

[Mr. Big Dog 10,747]

Yeah. I've said we shouldn't be happy until it gets back down to that level.

Though I've seen a few economists who say the 'real' value is somewhere down closer to $40 a barrel still.

The oil industry would not like that too much though.

Well, I wouldn't expect the CEO of a big oil company to publicly lowball the value of the commodity he is producing.