[originally posted on August 18, 2009, 12:34 but I forgot to make it public]
I keep telling you it isn't over. I warned you about what will happen when the Feds raise the interest rate
. It is beginning to look like it will happen.
Commentary The BuzzBeware the double dip
There are growing fears that talk of a recovery is a Wall Street illusion and that the economy could dip into recession again if the job market doesn't improve soon.
By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: August 18, 2009: 12:46 PM ET
NEW YORK (CNNMoney.com) -- [...]"The recovery is based on the destruction of the currency. As the dollar goes down, everything priced in dollars goes up," said Michael Pento, chief economist with Delta Global Advisors, Inc., a money management firm.
The greenback has fallen about 10% against a basket of currencies since stocks bottomed in early March. At the same time, the price of oil is up almost 50%. Soybean prices are up nearly 25% while sugar futures have surged nearly 65%. And the price of copper has skyrocketed about 75%.
If that trend continues, it's possible that these price increases will eventually be passed on to you and me. That could prompt the Federal Reserve to jack up interest rates in an attempt to cool off inflation.
So any recovery that takes place later this year could quickly fizzle if rising prices lead to more pain for consumers that result from sticker shock and higher interest rates.
"Inflation could skyrocket by the end of the year. That could force the Fed to raise interest rates and send the economy into a double dip recession in 2010," Pento said.
It looks like we may hit 3.1%
come January. That is a rise of 4.29% in six months. Keep in mind that the the average for the YEAR of 2008 was only 3.85%
Winter is coming, folks. I hope you saved up some money to burn.