Inflation? Insignificant Inflation? I have shared a few of Dr. Elliot’s blogs in the past. I love them because they are very easy to read and make you think and inform you at the same time in a VERY SHORT form! SO…..What is INFLATION? In a nutshell, when we have a BUNCH of money we tend to spend that money on stuff. There is only so much stuff for us to buy and when that stuff runs low or we start running out of stuff; the prices start to go up. When prices go up, this is called inflation. Simple! Inflation has been a very tricky thing over the last 20 to 30 years! Because we live in a Global Economy we can have TONS of STUFF imported very inexpensively which keeps the prices down and we still get to spend our money on STUFF! That stuff from overseas can be made at a lower cost, but we still get our STUFF! This is the BIGGEST reason why over the last 20 to 30-years, inflation has been SO hard to get a handle on. More to come! If you have any questions or comments let me know!
Despite excellent economic growth, rising wages, and the lowest unemployment rate in 49 years, inflation remains quiescent. The Fed's preferred inflation measure, core personal-consumption-expenditure inflation, rose just 1.8% over the past year, and has been around that level, close to the Fed's 2% inflation target, since February! A strengthening dollar, low inflation expectations, weak commodity prices, and slowing global growth are helping keep inflation in check. Hopefully, this continues.
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Elliot F. Eisenberg, Ph.D.Visit my blog