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Inflation is Everywhere- or Is it?

Written by Tracey

February 25, 2008 06:30 AM

Barron’s had an interesting small article in this week’s issue called: “Looking Behind the CPI Curtain.”

We think of inflation being everywhere as food prices, metals and crude soar. But is it? One of my friends just got a 38 inch flat panel tv for only $800. It was certainly more expensive only a year ago.

The article states the following prices are rising:

Eggs up 32%
Bread up 10%
Tomatoes up 19%
Gasoline up 29%
Air Fares up 10%

But prices are actually falling on these items:

Household furnishings down 0.7%
Apparel down 0.3%
Televisions down 18%
Photographic equipment down 7%
New cars down 0.4%
Personal computers down 14%
Computer software down 6%

The problem with these lists is that the items we use everyday are on the list of prices going higher. Many of us can go years without buying a car or a new computer but we fill up our cars every week.

Hence, the Feds dilemma. Inflation is clearly heating up in the economy. And if the Fed keeps cutting, it could get worse.

Stay tuned.

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