The Fed Just Raised Rates Into an Oil-Driven Inflation Shock On Wednesday, September 16th, the Federal Reserve announced that it would raise interest rates. Read that again: the Fed just raised rates into an inflationary oil shock that was already pushing prices higher. The Federal Open Market Committee bumped its benchmark federal funds target up a quarter point, from 3.50% to 3.75% up to 3.75% to 4.00%. This is the Fed's first hike since July 2023, and every single voting member signed off on it. The 3.50% to 3.75% target range resulted in an actual rate of 3.63%. If that was all it might not be too bad, but they are projecting more pain to come. But the spread between CPI with energy … [Read more...]
Inflation Definitions
Inflation Adjusted Prices What is the inflation adjusted price of common commodities? Historical Oil Prices Chart - This Chart compares Monthly Average Oil Prices with their Inflation Adjusted Oil Price. Historical Crude Oil Prices (Table) - The first table shows Annual Average Crude Oil Prices from 1946 to the present. Prices are adjusted for Inflation using the Consumer Price Index (CPI-U) as presented by the Bureau of Labor Statistics Inflation Adjusted Electricity Prices - Residential electricity prices in the U.S. have risen from an average of 7.83 cents per kilowatthour in 1990 to an average of 11.44 cents per kwh in 2010. This is a 46% increase in 20 years and sounds like a … [Read more...]
How the Dollar Affects Gold Prices
Interview with Jim Puplava, by Jeff Clark, Casey Research Jim Puplava has robust convictions….The CEO of Financial Sense News Hour, Jim is a man you should listen to carefully if gold factors in your portfolio or if you are thinking about adding gold anytime soon. In this interview, Jim talks about how the dollar affects gold prices. He discusses whether we are moving into a phase of deflation or inflation and gives his views on what exactly that will mean to gold investors. He discusses the likely impact of inflationary or deflationary forces, which one he believes will win out, and the effect it will have on our economy. Finally, he makes a very interesting prediction. Of course, … [Read more...]
Stagflation – What is it?
What is Stagflation? The simple definition of Stagflation is a "stagnant economy coupled with price inflation". Thus the term Stagflation... it has nothing to do with Deer. In other words, in stagflation prices are going up while the economy is going down. The word was coined during the inflationary period of the 1970's. Under normal conditions one would expect inflation to heat up the economy i.e. increase buying demand. That is one reason the FED generally increases interest rates during periods of higher inflation. This helps to cool the economy and prevent inflation from spiraling out of control. Of course ,if you have read other articles on this site, you will know that … [Read more...]