Wholesale Inflation Soars on Surge in Energy Prices - New York Times

So what? I'm not sure that the Fed has the right tools to deal with this inflation. Raising interest rates is good for fighting inflation. Althougth the Fed has been doing that for months now. Has it worked? Fuel prices continue to increase. Food is up as are other costs (housing bubble anyone?).

What next then? If the Fed keeps increasing rates, the economy will continue to slow down and that should keep inflation low. But what if they keep raising rates and inflation keeps going up? What conundrum is that? As fuel cost keep applying pressure on inflation, the economy can't slow down much more, can it?

Will unemployment increase? What is the moneterist response to that? Could we be in the beginings of a downward spiral?

There will be no more large tracks of fuel to be found. Technology will require at least a decade to catch up with alternatives. That means continued higher fuel cost which means a slowing economy. Demand continues to increase as China and India continue to industrialize. Fuel costs will continue to rise.

What about long-term interest rates? Are they going to start rising with this screwy economy?