U.S. inflation heats up

I know a lot of seniors who want to avoid the stock market and depend on CD interest to supplement their SS income. A rise in interest would help them greatly.

Yes, they'll get more interest, but if it cost them more to purchase items, where is the gain?

1/2" OSB plywood was $7 in December, $17 yesterday. Milk was $4.42 yesterday, $2.86 in December; electricity for 1400 kw was $180 last month, $120 last year; one telephone landline was $23 last year, $43 last month.

or that they are fully looosing control...

When the 30 year bond hits 5.50% the real estate bubble will pop and it is going to be ugly.

When do you think it will hit 5.50%?

It's unavoidable that it burst. The question is will sane voices be able to clean up the aftermath.

Just for people who sell and move frequently. People who intend to stay put and prioritize the use value of a house over its investment value are going to ride it out.

I intend to live out the rest of my life in my current residence, so I don't care if property values fall.

'Dr Doom' predicts house price crash to rival the 1980s
By Cahal Milmo

14 April 2004

The City investment guru derided for predicting the dotcom bubble would burst cast his gaze on the property market yesterday and said house prices were set for a crash that could see values fall by almost a third.

Tony Dye, whose prediction of a messy end to the dotcom era earned him the sobriquet "Dr Doom", accused lenders of fuelling an overheated housing market and said buyers were being driven by a "herd" mentality in the mistaken belief that prices could only rise.

more...

http://news.independent.co.uk/business/news/story.jsp?story=511244

...that will affect everything in a very negative way.

Want to bet that he will hold off until after the 2004 election?

n/t

by revamping the index to give less weight to more volatile costs such as energy, education, housing, etc.... one has to wonder how this will effect voters psychologically. For the better part of a year prices have been climbing for many ... but being told repeatedly of the low (almost negligible inflation) sort or worked to balance out the reality (as in "well maybe it is just different here in this town"). Once the reality of climbing inflation is acknowledged publically - I would expect more folks to compare the stated rate to what they witness in their gas/electric bills, at the pumps, in the grocery stores, etc. Often - the power of public suggestion (bolstered by a hypnotic repitition over time from multiple sources... "at least there is no inflation.... at least there is no inflation....") can have an impact either direction. Just have to wonder if this public proclamation that inflation is indeed increasing - will open the flood gate to folks starting to talk more about how MUCH inflation they are experiencing - and get that talk more into the public discourse.

stagflation (one of my favorite portmanteau words) is baaaaaack

then it must me so very much worse.