And now, a word or two on the rate of inflation

Beginning in about October 2007, one could have begun to worry about the rate of inflation. Here are the annual rates of inflation, beginning in October 2007, calculated monthly as the percentage change in the CPI from one year earlier:

October 2007...............3.5%
November 2007...........4.4%
December 2007...........4.1%
January 2008...............4.4%
February 2008.............4.1%
March 2008..................4.0%
April 2008.....................3.9%
May 2008......................4.1%
June 2008.....................4.9%
July 2008......................5.5%
August 2008..................5.4%
September 2008............4.9%
October 2008.................3.7%

And, then, November 2007 to November 2008:
November 2008.............1.0%

In fact in the last four months, the CPI has declined from the prior month. A December decline of the same magnitude as the October-to-November one will result in a fall in the CPI from December 2007 to December 2008. So despite everything that the Federal Reserve has done to inject liquidity into the economy, inflationary pressures have, essentially, vanished, and vanished rather abruptly--annualizing the monthly increase in the CPI from June 2008 to July 2008 gives us a 9% annualized rate of inflation. From July 2008 to August 2008? -1.6%. October to November? A staggering -19%.