SNOW JOB

NEW YORK (Dow Jones)--U.S. Treasury Secretary John Snow said Wednesday in an interview on MSNBC that inflation isn't becoming a problem for the U.S. economy. While he noted that energy prices have risen to "unwelcome" levels, and he "hopes that we can start to move the other way on that," the Treasury Secretary told MSNBC's Ron Insana that "we're going to continue to have a basically low inflation environment for the indefinite future." He cited an "open economy," productivity, underutilized assets, and the inherent competitiveness of the U.S. economy as reasons for his views.

These comments by the U.S. Treasury Secretary seem to be in stark contrast to the thinking inside the Federal Reserve Building. Federal Reserve Chairman, Sir Alan Greenspan and the sitting Governors seemed to imply, infer, and intimate that indeed inflation is a concern. The financial markets took heed to the statements coming from the FOMC and sold off the long bond pushing interest rates up to their highest point since the summer of 2004. The PPI and CPI data points were hotter than expected as well in the most recent reports, yet Treasury Secretary Snow seems to know better and is using different data.

This Treasury Secretarys statement seems to go well with his "broken record" comments about how the U.S. Government support for a strong US$ policy. The US$ continues to decline in value while the Treasury Secretary mouths the words that the US government supports a strong US$ policy.

His statement about inflation is a continuation of his seemingly uninformed or ignorant rhetoric and hope for an economy that validates the Bush administrations economic policies and tax cuts.

The reality of rising interest rates, falling US$, high energy prices, and no new tax cuts to fall back on, the Bush economic plan has failed to produce results for the majority of the US population.

The coming recessionary period will be difficult for the Republicans to explain away and will be deeper than the recession that was interrupted by the ill advised tax cuts and emergency low interest rates.

As many pundits have pointed out, the FED has opted to replace one asset bubble with another, in the form of real estate for stocks. With Japan as our economic alter ego, their experience which is still ongoing, is what we can look forward to. Japan has been in a recession/depression for almost 20 years now following the bursting of their real estate bubble. The which resulted in banking problems and economic malaise that continues today.

Treasury Secratary Snow reiterated his views on Thursday 3/24/05 with the following comments>>>>

WILMINGTON, Del. (Dow Jones)--The outlook for U.S. inflation is "benign" thanks to the Federal Reserve's monetary policy, U.S. Treasury Secretary John Snow said Thursday. "Fortunately, we still have an overall benign inflationary environment as indicated (Tuesday) by the (Federal Open Market Committee's) statement and action," Snow told reporters following a speech on Social Security reform. "It's important for the Fed to continue to do as it has been doing - anticipate forces and lean against them." On Tuesday, the Fed raised interest rates by 25 basis points for the seventh straight meeting. In a statement released after the decision, the Fed described the pace of recent U.S. economic growth as "solid," a more upbeat assessment than the FOMC had at its last meeting in early February, when it described the pace as "moderate." The panel also added a caveat to its previous statements that the competing risks of inflation and a renewed economic downturn are "roughly equal." That expectation, it said, is subject to the continuation of "appropriate monetary policy." Concerns over inflation have been raised by rising gasoline prices and reports businesses have had found it easier to pass on higher costs to consumers. On Wednesday, the U.S. government reported that consumer prices rose at the fastest pace in four months in February, boosted by energy prices. The Consumer Price Index rose 0.4% last month, four times the rate in January, the Labor Department said. Higher energy prices accounted for "virtually all of the acceleration," the department said. But the core index, which excludes volatile food and energy items, also climbed sharply at 0.3% - the fastest rate since September. "It is important we stay vigilant on inflation," Snow said.