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Linus Pauling Categories
Tag Archives: inflation
Inflation worries push consumer confidence lower
Rising prices at the gas pump and in grocery aisles are starting to crimp shoppers’ outlook.
The Conference Board’s Consumer Confidence Index fell sharply from a three-year high in February, reversing five straight months of improvement. The decline raises questions about Americans’ ability and willingness to spend in coming months. Read More
How overseas inflation could hurt investors
Inflation isn’t hitting your wallet hard, but it is lurking in your stock portfolio.
Core inflation in the U.S. is 0.8 percent, well below the 4 percent rate that starts to worry economists. Though food costs are rising, the overall inflation rate is expected to hold steady due to stagnant real estate prices. Read More
Outlook 2011
While the American economy has now registered growth for five consecutive quarters, the pace of that growth has been meager, averaging a 2.9% real (after inflation) annual rate…and just a 2.1% rate during the past two quarters. Such growth trails the average 3.6% real annual growth pace of the past 30 years.
What we now call the Great Recession enters the history books at 18 months in duration, officially running from December 2007 to June 2009. Never since the Great Depression has a recession . . . read more Read More
The Case for Cash
A strong case can be made that every investment portfolio should contain cash. Cash is generally defined as a safe and liquid asset, such as U.S. Treasury bills, Money Market funds, FDIC-insured Certificates of Deposits, or Bank checking and saving accounts. While cash instruments are not suited to counter inflation, cash does provide an investment portfolio . . . read more Read More
GOP economists criticize Fed’s bond-purchase plan
Federal Reserve Chairman Ben Bernanke’s plan to rejuvenate the economy by having the Fed buy $600 billion in Treasury bonds is coming under renewed attack — this time from fellow Republican economists.
They argue that pumping many more dollars into the economy could eventually trigger inflation and weaken the dollar too much. The economists are making their case in a letter to Bernanke and in ads to run this week in the Wall Street Journal and the New York Times. The Treasury bond purchases “risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment,” the economists wrote…read more Read More
Consumer prices rise moderately but inflation tame
Consumer prices rose moderately in October but there was little sign of inflation as the cost of autos, clothing and hotels fell.
The Labor Department said Wednesday, November 17, the Consumer Price Index rose by 0.2 percent last month, an increase from September’s 0.1 percent rise. Wall Street analysts had expected a slightly larger increase. It was the fourth straight rise. Gasoline prices accounted for most of the increase, rising by 4.6 percent in October, the biggest gain since July.
Excluding the volatile food and energy categories, the core consumer index…read more Read More
The Fed’s big gamble: Here’s what could go wrong
The Federal Reserve is about to take a huge risk in hopes of getting the economy steaming along again. Nobody is sure it will work, and it may actually do damage.
The Fed is expected to announce today that it will buy $500 billion to $1 trillion in government debt, and drive already low long-term interest rates even lower. The central bank would buy the debt in chunks of $100 billion a month . . . read more Read More
No Confidence
Note the direction of U.S. economic growth during the past few quarters as identified in the quarterly growth chart—from a solid 5.0% real (after inflation) annual rate late last year, to a still respectable 3.7% pace during the winter, to an anemic 1.6% annual rate in the quarter just ended . . . read more Read More
Understanding deflation and your money
Deflation is the potential new boogeyman for consumers, replacing inflation.
Absent in any significant way since the Great Depression, deflation — a prolonged period of downward-spiraling prices of goods and services — is seen as a possible threat . . . read more Read More
..flation Investing
What’s it gonna be? Inflation or Deflation? Let me think now…inflation is going to be a huge problem in coming years. Did you see the incredible $1,400,000,000,000 federal budget deficit last year, with the same, or higher, budget deficit this year . . . read more Read More
AP survey: A bleaker outlook for economy into 2011
The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists . . . read more Read More
Bonds gain in popularity, despite current risks
Investors put a huge sum of money in bonds over the past year and a half as they sought refuge from the more volatile stock market. Another driver: the needs of a growing number of retirees who want steady income . . . read more Read More
Fixed-income ETFs make sense, but in moderation
Investors have been increasingly pouring cash into exchange-traded funds specializing in fixed income. That gives them the quick-trading capability of ETFs while retaining the more conservative position of bonds.
Many financial analysts think the flight to safety is overdone. They say investors need to be in stocks for the long run . . . read more Read More
Retirement strategies differ on value of annuities
The road to a happy retirement apparently has lots of alternate routes. Investment advisers can differ significantly in their recommended path to maximizing savings, a point clearly demonstrated in panel discussions at the Morningstar annual investment conference in Chicago on Thursday, June 24.
In a discussion on whether annuities should be offered in 401(k) plans one adviser said no, another said maybe and a third said . . . read more Read More
Fading of inflation helps buyers and borrowers
It’s a good time to buy a car, refinance a mortgage, hit the road or shop for clothes.
Invest in a saving account? Forget it.
Consumer inflation has all but disappeared, the government reported Wednesday, May 19. The Federal Reserve may now be emboldened to keep interest rates at record lows well into next year — and possibly into 2012.
As a result, banks’ prime lending rate will stay at its lowest point in decades. That figure is used to peg rates on credit cards, home equity loans, some adjustable-rate mortgages . . . read more Read More
