USA Today & A Lesson in Economics
USA Today carried a story on September 19, it was actually suggesting the recent decline in gas price may spur inflation.
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The recent sharp decline in gasoline prices may help consumers. But it also may stoke inflationary fires, perhaps forcing the Federal Reserve to raise interest rates again later this year, some economists, such as those at Merrill Lynch and the Bank of Tokyo-Mitsubishi, say. |
Source: http://www.usatoday.com/money/economy/fed/rates/2006-09-18-gas-fed_x.htm?POE=NEWISVA
There's a reason that Economics has been called "The Dismal Science". "Dismal" has a meaning beyond gloomy. It is: "characterized by ineptitude, dullness or lack of merit". If inflation is a rise in the overall (average) price level, including fuel costs, then other prices would have to rise by more than the fuel cost decline in order for the overall (average) price level to rise. If other prices don't rise as much, or not at all, then falling fuel prices are disinflationary. One had to pay attention in 7th grade arithmetic to figure that out.
-Zorroaster
Comments
Have you ever sat and actually read USA Today? I think their editors are a group of 7th graders....
Posted by: JR | September 22, 2006 07:12 AM