(Start at minute 15:00. via ACP)
gas went up 15% last 6 months.
energy is 10% of cpi.
cpi goes up 1.5%
this brings the inflation rate from 2.50% to ~4.00%.
the last time we saw 4% inflation was around 2006, when the Fed had raised rates to cool the housing market, but instead triggered a recession.
instead, this time, the inflation may come prior to the interest rate adjustment. nevertheless, the interest rate movement (to 4-6%) could trigger all the horrible things jim grant talked about above in the link.
see:
http://upload.wikimedia.org/
http://www.inflationdata.com/
http://www.bls.gov/news.
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