Inflation is here and everyone except Bernanke knows it
As for inflation, it's already here. The dollar is falling big time, raising prices on imports. Commodities are rising. Precious metals are at or near their all time high. The dollar has plunged in value, raising prices on everything we buy overseas. Commodity spot prices hit an all-time high in September and continue to rise, especially sugar. Gold? Also at record highs. Oil? It has doubled in a year to $83 a barrel, via IBD:
Other common goods — from rubber to sugar to copper to rare earths — are surging, with some near all-time highs.
It's only a matter of time before these prices are felt in the cost of consumer goods. At present, home prices are distorting inflation figures. Year over year, housing costs have fallen 15 straight months.
The risk? Once the economy takes off, inflation may spike. And once inflation gets imbedded in the economy, it's tough to get rid of. If you don't think so, go back and review the history of the 1970s.
Bernanke is as smart as they come. But adding another $600 billion to the $1 trillion the Fed has already stuffed into the banks does nothing to boost economic activity.