How's the 600 billion going to affect the market and inflation?

[Gone4Good]

Here's why commodities are an absolutely lousy benchmark for monetary policy . . .

In its annual World Energy Outlook, the International Energy Agency also predicted that oil prices would nearly double in real terms by 2035, from just over $60 per barrel in 2009 to $113 per barrel. The projected price increase, which is adjusted to eliminate the effects of inflation, reflects a growing demand for cars and airplanes against the backdrop of reserves that will be increasingly difficult to reach. . . .

China is expected to continue to drive growth in energy demand overall as its industrial production increases and its population grows . . . Demand for energy in China is expected to rise 75 percent by 2035

Apparently we're to believe that the proper role of the Fed is to tighten U.S. monetary policy and reduce domestic demand to keep commodity prices stable. But to do this, we'll have to reduce our demand by at least as much as China's demand grows. The main beneficiary of such a policy, of course, is China, who can continue to grow unfettered, but, by virtue of a self destructive monetary policy in the U.S., can realize the same growth with lower commodity costs. Meanwhile, our GDP will be forced lower by roughly the same amount as China's GDP grows. Brilliant.

 

[Gone4Good]

CPI up 1.2% YOY

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.2 percent before seasonal adjustment.

The gasoline index rose for the fourth month in a row and accounted for almost 90 percent of the all items increase. The food index rose slightly in October with the food at home index unchanged.

The index for all items less food and energy was unchanged in October, the third month in a row with no change.

Over the last 12 months, the index for all items less food and energy has risen 0.6 percent, the smallest 12-month increase in the history of the index, which dates to 1957.