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Friday, February 19, 2010
Fiscal Balance Watch and Core Inflation Drops
Core inflation drops for the first time since 1982. Soon Goldman Sachs, etc. will be dumping oil and stocks leading to a drop in overall CPI.
From comments of Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City:
"government finance is taking center stage....Knowing inflation is not an acceptable alternative to strong fiscal management... Finally, there are no short-cuts. We currently must adjust from a misallocation of resources. There is no way to avoid some short-term pain in fixing the fundamentals in our economy. It is inconvenient for the election cycle, and it is undeniably terrible to have at least 10 percent of the labor force out of work. But short cuts now mean people out of work again...
China is still buying US debt through other channels...
China finds new ways to buy U.S. debt