Like most Americans, I am worried about the economy. The price of gasoline has fallen (I paid $1.85 per gallon Saturday night) but I haven't seen much ripple in the rest of the market. Popcorn and two soft drinks at the theater Saturday night was $16. What to think about the statement below from John W. Schoen at MSNBC:
As prices fall, the spending power of your money goes up. But so does the real value of your debt -- because you have to pay it back with money that has increased in real value.
The paying back power of your money doesn't go up along with the spending power? Economists give me a headache.
In New Zealand, where there appears to be some sanity, they are liking the lower gas prices for their upcoming summer. Good to be them. The global gasoline market is driven by US demand. When the price is up here in the summer, it's up there in the winter when they don't want/need it as much.
Looking like a bleak Christmas season.
Quote of the Day
A benign decline in prices amidst a sluggish but recovering economy would be unwelcome but tolerable but the price slashing now under way as the consumer beats a hasty retreat could allow that corrosive deflationary spiral to take hold -- something the Fed wants to avoid at all costs.
Merrill Lynch economist David Rosenberg
Blog of the day here.
Quote from said blog: "Is the intent to shame the naughty into paying their fair share? To a point. However, I believe government posts those lists to incite a very different emotion: envy."
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