From: "Richard Hong" 

>> Relatively speaking, low inflation/deflation is better than high
inflation/deflation.

Bill,

But that's rather off-point.  My contention is that an inflation rate of
N+1% is worse than N%, pretty much regardless of the value of N.  And the
gas thing will add that 1%.  That 1% will cascade through the economy, not
just in the form of higher transportation costs, but in raising wages and
govt benefits by raising the COLA.  What's the S.S. increase, around 2% a
year?  Making that 3% instead of 2% is a pretty big hit.

It also makes people feel poorer in a very visible area of their lives, and
that can't help consumer spending (or new car purchases, especially
high-profit SUVs and such).

Rich

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