While we can be somewhat blase about goods [prices], at least for a little while longer, we cannot conclude that retail inflation is anywhere near under control.

With those kinds of prices, you can get on a plane and go to the Caribbean. And you don't have to bring linens.

We shopped the world's markets until we dropped. We bought a lot more of everything, including capital and consumer goods, foods and motor vehicles.

To put it mildly, durable goods orders have been all over the map but the trend appears to be slowing.

Core prices continue to rise faster than would be considered comfortable and at the intermediate level they have been surging for the past six months. That is a warning sign.

The pull back in housing remains orderly, at least in the existing market. But the red flags are up. Inventories continue to rise and that is a warning that prices cuts could be coming, and soon.