• Gold price closed at $927 on Friday
• US 4th Quarter GDP down 3.8% - biggest drop since 1982
• Exxon Mobil sets record with $45.2 billion profit
• P&G 2Q profits rise 53 percent, sales drop
• Oil below $42 on dismal US economic outlook
• Japan factory output plunges, jobless rate jumps
• The US Senate backed Tim Geithner as Treasury Secretary
• Several major global companies announced combine total job cuts of 76,000 on Monday
• The Federal Reserve maintained its target for overnight interest rates at 0-0.25%
• US consumer confidence at 37.7, lowest level since 1967
• US House prices dropped 18.2% in the year to November-08
• Germany's unemployment rate at 8.3% in January-09
• UK's GDP fell by 1.5% in the fourth quarter of 2008
• Australia's consumer prices fall by 0.3% in the three months to December-08
• Australia's annual inflation rate at 3.7%, down from 5% in Q3
You have heard me say it before; I am more concerned about inflation rather than deflation. In my humble opinion, inflation is typically understated by governments and economists to keep the average Joe in the dark, official wages and prices artificially low and at the same time, to effectively overstate GDP and general growth numbers. Whoever makes the decisions on what type of goods are factored into the baskets of various inflation indices (CPI/PPI etc.) has a very powerful tool at hand to make us feel better. We don't realize it, but real inflation is a lot higher than the officially published prices. At least that's how it feels on a personal level. But aside from looking at economic models and whatever statistics you may have seen, there's something about inflation that personally concerns me not just in terms of the daily experiences of managing my own personal finances, but also on a subconscious level.
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