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Inflation: United States
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The first is the choice of inflation target. What the central bank needs to do is to focus on future inflation. One aspect of this is the choice between a core inflation index versus a headline inflation index. This is an issue all central banks have to face. The US Federal Reserve focuses on core inflation because in the United States this measure has proved to be a better predictor of future headline inflation. By contrast, the European Central Bank focuses on headline inflation, and there is evidence that in the euro area headline inflation is a better predictor of future inflation.
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Click image to expand. Back in February, Jennifer Steinhauer noted in the New York Times that New York leads the nation in inflation. Between January 2004 and January 2005, New York's CPI rose 4.1 percent—compared with a 3 percent increase nationwide. The trend of urban inflation has continued—and not just in New York. Kaza crunched the numbers, comparing the top 10 metropolitan areas with the United States overall. In March, New York's inflation rose at a 4.2 percent annual rate, compared with 3.1 percent for the U.S. In Los Angeles, inflation was even more rampant: 4.8 percent. In Washington, it was 3.5 percent.
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"When it comes to inflation protection in the nonprofit space there's a clear disconnect between stated goals and the strategies and measures available to help achieve those goals," says Carolyn McLaurin, Senior Vice President of SEI's Foundation and Endowment Group. "Nonprofits need access to stronger tools -- ones that will provide a more holistic view of how a wide variety of market scenarios impact their portfolios. This will get them to a place where they can take advantage of new asset classes and further protect against inflation."
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Cosmic inflation has the important effect of smoothing out inhomogeneities, anisotropies and the curvature of space. This pushes the universe into a very simple state, in which it is completely dominated by the inflaton field and the only significant inhomogeneities are the tiny quantum fluctuations in the inflaton. Inflation ... dilutes exotic heavy particles, such as the magnetic monopoles predicted by many extensions to the Standard Model of particle physics. If the universe was only hot enough to form such particles before a period of inflation, they would not be observed in nature, as they would be so rare that it is quite likely that there are none in the Observable universe. Together, these effects are called the inflationary "no-hair theorem"[5] by analogy with the no hair theorem for black holes.
The writer, having witnessed the course of inflations in one European nation after another, believes that it is not too late to stop further inflation in the United States by bold and painful measures. Inflation is not an act of God. It is a result of the methods used to provide a part of the means for the conduct of the war. One set of methods can still be replaced by another, less harmful set. It is still possible to keep down the amount of money and money substitutes by financing the total amount necessary through taxation and loans.
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Widespread dissatisfaction with high inflation in the late seventies and early eighties brought renewed interest in the gold standard. Although that interest is not strong today, it strengthens every time inflation moves much above 6 percent. This makes sense. Whatever other problems there were with the gold standard, persistent inflation was not one of them. Between 1880 and 1914, the period when the United States was on the "classical gold standard," inflation averaged only 0.1 percent per year....
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