THE REAL STORY OF INFLATION

I don’t know how many of you remember the terrific comic Gilda Radner, but she was one I really liked on the old “Saturday Night Live” TV show. The reason she comes to mind is a line one of her characters said when things seemed to go a bit awry. It was: “It’s always something.”

Of course, it was said in the context of a usually very funny skit and always brought down the house, as they say. But, Gilda comes to mind today as I write this column because for the last six months or so it seems it has been just one thing after another. First, it was subprime, then bond insurers, then housing prices, then a liquidity crisis — it always seemed to be something.

What I want to talk about today is another one of those “somethings” that just makes the list longer — the recent inflation numbers that were announced last Tuesday. I know, I know, nobody believes those numbers, anyway. But, they are troubling to me because of the raft of analysts all harping on the same note: “The dollar took a nose dive. We let it happen and now we are getting what we deserve!” But, that story line, frankly, misses the real story by a mile — maybe even more!