EU inflation jumped to 4% in June (that's the official version - the real inflation is far higher), reaching the ECB bechmark rate. That will bring a rate hike in the July meeting, which will not be enough going forward. The dollar will drop further and Euro will rise above 1.60 (I'll make a tech special on that later this week). I am sticking to my idea that oil tops short term at 146/8 and we see oil dropping back to the 100/110 area. The Bush administration has to throw strategic reserves on the market soon, since the public pressure and upcoming elections will make it inevitable for this administration to keep up their oil friendly attitude. I have no idea why he wants to install a defense shield of rockets in front of Russia while he lets them make a 'killing' and undermines the US economy. The Russians could not have done it any better in the sense of cold war strategy.
Coming back to the real problem, the core inflation - the most abused word of the FED and some other Goldilocks experts. Lufthansa ground workers want a 9.8% raise of wages and this is just the beginning. People cannot afford to loose buying power anymore, so the negotiations will be tough going forward in all areas and bring a negative momentum from a different angle to the overall inflation. This process cannot be stopped and will, over the next months and years, drive up the death spiral of inflation. People have been lied too enough and have been disinfomed by statistical tricks that regular people would be jailed for, but the governments can do things that single individuals are sentenced for. The point of pain has been reached with the so-called head-inflation numbers and the erosion of the phony wealth of their home and stock equity. Now they loose on all ends at the same time that's to much to deal with, which is another effect of Pluto in Capricorn - the bitter truth comes out from everywhere. The result will be higher wages to calm down the people but no higher productivity, so the money press will work overtime and the inflation game goes into full speed - the end will be disastrous.