How does reduced spending spur wholesale inflation? Wouldn't less
spending drive DOWN prices as vendors compete for fewer available
dollars?

On 1/16/08, Michael Berkowitz <[log in to unmask]> wrote:
> As the article explains the reason is
>
> Wholesale inflation last year shot up by the largest amount in 26 years
> while retailers suffered their worst December shopping season in five
> years as mounting economic woes caused consumers to put away their
> wallets.
> The huge increase for the year in various types of energy costs ranging
> from gasoline to home heating oil
>
> Michael Berkowitz
> Project Manager, CGS Application Solutions
> 707 Wilshire Blvd Suite 1900
> Los Angeles, CA  90017-3509
> T: 213 614-1308
> F: 213 614-2028
> [log in to unmask]
>
>
>
> Craig Lalley <[log in to unmask]>
> Sent by: HP-3000 Systems Discussion <[log in to unmask]>
> 01/16/2008 10:29 AM
> Please respond to
> Craig Lalley <[log in to unmask]>
>
>
> To
> [log in to unmask]
> cc
>
> Subject
> [HP3000-L] OT: Economy
>
>
>
>
>
>
> I really don't understand the economy.
>
>  For the past 15+ years, home prices have been spiraling out of control.
> People are spending more than they make and the savings rate has gone
> negative.  All that time, inflation was low, if not stagnate.  Some people
> even talked about the problem of deflation.
>
>  And now that home prices have all but collapsed, financial institutions
> are being bailed out by foreign countries.   Defaults on mortgages are at
> record numbers.  The ON thing stopping bankruptcy is the recent changes in
> the laws.
>
> So now, now that everyone is cutting expenses and on a budget, now that
> the money system is tight.  Sub-prime mortgages, which really are not
> Sub-Prime... (check THAT one out), are setting records for default.. with
> all this happening.
>
>  Whole Prices Soared Last Year
> http://ap.google.com/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD8U6CQQ80
> If someone can explain this, in layman's terms preferably, I would really
> appreciate it.   (just in case it goes in this direction, I already know,
> "It's all Bush's fault.")   Please leave the politics out of the debate.
>
>  -Craig
>
>
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-- 
"If hard work were such a wonderful thing, you'd think rich people
would have kept it all for themselves" - Lane Kirkland

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