Inflation Hits 15 Year High

[Techie2000]

It seems that the <a href="http://news.yahoo.com/s/ap/20051018/ap_on_bi_ge/economy">rising energy prices are having a ripple effect</a>. This means interest rates will probably rise, and that means it will not be a good time to be a borrower. I think we're going to really feel this during the holiday season.

[Coot]

Stands to reason, as energy is at the root of all economic activity.

[Copzilla]

Bit premature. They note the cause of the inflation was due to energy, and yet the energy prices have in fact subsided from their peak following the hurricanes, dropping about 10 percent so far.

[Coot]

Energy, specifically gasoline and diesel are still way, way high. It hasn't gone up or down much here in the last couple of months. We're still paying $2.85 for gas and $3 for diesel. Crude prices are also nearly double what they were a year ago. NOt to mention natual gas which is at $11/mmbtu.

There's also been a steep rise in the cost of plastics and mattress manufacturers are bemoaning a critical shortage of foam materials.

[Swamp Fox]

Yes, I've been keeping an eye on this. Energy prices caused inflation in the 1970's, after the OPEC oil shock, and it's having a similar effect today - if not for the cheap labor overseas, we'd be facing the same problem as the 1970's.

The challenge, as I see it, is twofold:
1) To increase energy output, in particular, oil output, to lower energy prices and hence stimulate economic growth; and
2) To create new technological revolution, or recreate the IT one, so as to create high-wage jobs.

Oh yes, there's a third one - do it without destroying the environment. It's going to be all or nothing for humanity.