By Joseph A. Clark
NEW YORK (AdviceIQ) -- Most people think inflation is bad on its face. But one school of economic thought holds that a little inflation is a good thing, if it is confined to assets such as stocks and real estate. It's when it spills over to the supermarket or gas station that no one is an inflation fan.
Our central bank's policy is to goose asset prices, thus getting the sluggish economy finally moving, but that kind of precision is a tall order and there are other factors in inflation -- such as the weather distortions this year, which created more than just travel and meeting interruptions. The extreme drought in the West led to the loss of cattle and crops. This in turn spurred commodity prices higher.
The bill at the grocery store is rising faster than many household budgets are prepared to absorb. I asked my wife what she thought about inflation, and her response was less than positive.
The Consumer Price Index overall rose 1.1% in February, and food was up 0.4% four times the rate of the month before. Prior months were 0.1% or zero. U.S.-grown food inflation is worst among meat and dairy, and coffee is way up thanks to a drought in Brazil.
True enough, inflation raises the price of goods and services, but that in itself does not make inflation all bad. Again, I asked my wife if she wanted assets such as the value of our house and investments to appreciate. She replied: Sure, but what about food costs?