Prices rising despite low inflation rate

At the same time the federal government is reporting inflation at rock-bottom levels, the cost of medical care, tuition and housing have shot up. From gasoline to coffee to gold, commodity prices are soaring to heights not seen in years.

“We’re rewriting history,” said Chicago Board of Trade veteran Jacob Morowitz, who has watched soybean prices double since last March. “You have a market in never-never land.”

Yet the Fed, along with many mainstream economists, says inflation is no worry at all. Last week, Chicago Fed President Michael Moskow assured a hometown audience that inflation would remain low again this year. “Concerns are premature,” he told a business group. “Inflation rates are unlikely to increase significantly.”

The difference between inflation as measured by the Fed and the inflation everyday consumers experience is prompting a re-evaluation of how the nation assesses this critical phenomenon. Some claim the federal government for years has systematically understated inflation, thus missing a gradual but far-reaching shift in the global economy…{{link http://www.chicagotribune.com/business/chi-0403280352mar28,1,3606471.story?coll=chi-business-hed/ MORE}}

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