Inflation you say, what inflation?

Wall Street rallied last Thursday and Friday in the face of producer prices rising a much higher than forecast 0.9% and consumer prices rising a brisk 0.7% in May.

Hold on, those are the headline rates you say. What's important are the core rates which only rose only marginally PPI 0.2%and CPI 0.1%. The core is what matters because that's what the Fed looks at when raising interest rates. To get the core rate the Fed excludes those pesky, volatile items like food and petrol.

OK then, but don't actual people have cars that need petrol and eat food because they well... need to survive? Yes but maybe the Fed isn't worried because Fed officials aren't actual people. They are in fact battery powered robots that don't require petrol or food. That would certainly explain their robotic like commentaries.

Take Cyborg Bernanke for example, one of his wires has gotten loose causing him to walk around repeating "There will be no spillover from the sub-prime mortgage market" "There will be no spillover from the sub-prime mortgage market"

Anyway for those interested in exploring the Inflation/No inflation issue here is a series of good articles from THE BIG PICTURE which make for interesting reading.

A Tale of 2 Inflation Rates

There's No Inflation -- Except for Necessities

Inflation PartII