When I first heard the US Treasury was borrowing more money (by selling bonds to China) to save our butts, I wondered if all that cash in the system would lead to inflation. But so far, prices haven’t gone up. Gas is still less expensive than it was last year and retailers have discounts left and right just to tempt me to browse. Looks like I’m not the only one watching my wallet though. The Consumer Confidence Index – how people feel about their economic future, just declined again. In the July 28th report it was 46.6 points, which is 2.7 points lower than June. At this rate of consumer spending, I don’t think inflation is going to be much of a worry.
Today, the Producer Price Index – how much the manufacturers pay to make things we buy, decreased as well. So if what they make costs less, what we pay, the Consumer Price Index, should decrease too. Is this how deflation starts?
Maybe I should invest in Diageo. Hehehe