Will inflation escalate?
*Financial Times, by Daniel Pimlott, January 16, 2008:
"Prices for US consumers rose at a faster than expected pace in
December, pushing inflation to its highest yearly increase since 1990.
But inflation concerns are likely to take a back seat as the Fed seeks
to avert a recession, economists said.
The rise in inflation over the whole of 2007 was 4.1 per cent, the
highest rise since a 6.1 per cent jump 17 years ago. This was still
less than in November when the year on year price rise was 4.3 per
cent, lifted by soaring energy prices.
The higher-than-expected figure raises fears of stagflation, as slowing
growth in the US economy is complemented by higher rates of inflation.
The Fed continues to remain concerned by inflation boosted by record
oil prices, and the rapidly rising cost of food and other commodities,
boosted by demand from fast-growing China and India.
However, the threat of a recession in the US, sparked by a two year
downturn in the housing market and a related credit squeeze, is of
greater concern to the Fed."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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