Tuesday, December 16, 2008

I'm Glad that Gas is Cheaper

The CPI fell 1.7 percent between October and November. That's a lot -- if that continued for 12 consecutive months, the annual inflation rate would be -18 percent!

However, essentially all of the drop was reduced energy prices. As a net oil importer, the U.S. is better off when oil is cheaper relative to the goods that we produce.

Nevertheless, I would like to see the Federal Reserve take bigger steps to keep INflation going. Inflation will alleviate some economic problems; prolonged deflation will aggravate them.

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