The Dilemma

Bernanke's rate cut yesterday was accompanied by language the stipulates that inflation is still a concern. What? How can you have a ginormous rate cut and be worried about inflation?

It's a simple answer and it's called stagflation. And as I've been saying for some time, we're in it. So far, it's not the hyper-stagflation of the 70's, but there's still time to get there.

The year over year inflation comparison data is about to undergo a big change. Put another way, inflation is going to look pretty bad, even by the government's nonsense numbers, in the next couple of months. Add to this record oil prices and rising gasoline prices (we've had our seasonal dip .... shorter than in the past).

Ben baby, get ready for your dilemma to increase as the economy continues to slow and inflation continues to rise.