“But if commodities are falling and wages are falling why isn’t that reflected in “goods and services”. The price of milk is going up. Why is that? It has to be related to the cost of bringing milk to market. Labor, material, transportation, energy. “
You have to look at the price of pure, simple commodities so that you isolate what is the result of the Fed and what is the result of regulations or technological capability. You don’t want the Fed to contract the entire economy just because the price of orange juice was higher due to a frost in Florida.
Actually I don't want the Fed to do anything except go out of business. The Fed is the reason that you can buy a gallon gas for one Mercury Dime or about 4 paper dollars. They have debased the U.S. Dollar for nearly a century and all of this 'deflation' that is going on conveniently hides the impact of the latest QEThis and QEThat rounds in that overall process. That won't last. Inflation will rear it's ugly head at some point.