In Canada, this morning, lower gasoline costs helped drop consumer inflation to an annual rate of +2.0 pct from the prior +2.6 pct in October and +3.4 pct in September. The drop in Canada's CPI is due to the U.S. cross-border trade situation.

Still, the Bank of Canada is intending to raise the bank rate again, for reasons they understand.

What is happening is that producers are having difficulty raising prices on what is called big ticket items " automobiles, home appliances, etc. In my view that is precisely what is at the bottom of the inflation issue today. Consumers have no ‘tickee'. They have flat-out used up savings and borrowing capacity to make purchases of products that are not deeply discounted in price.

So while everybody is pointing to the fact that prices hit the wall in the past month, I say that yes that is a sign that the credit bubble is about to burst " the consumers cannot afford higher prices. So now the consumer will turn to pushing wages that help them meet their rising monthly costs of living.

Wall Street traders and Big Media staff are today telling you there is no need to fear inflation. Today in New York City they are all walking to work. If they cannot pack four or more people into a single automobile, the police pull the car off the road refusing to permit it to drive into NYC.

Why? It's because there is a transit worker's strike " the first in 25 years. Why? It's because the workers are demanding higher wages. Higher wages means higher inflation.

So millions of people are walking today, and the Mayor of NYC is stating that the City is losing $400 million a day in economic losses for every day this transit strike continues.

Why can't centers of influence (Wall Street and Big Media) admit what is happening today? They obviously don't want to talk about a scenario they see developing.

So today " after they finish a marathon walk to work in a gridlocked city " they will tell you a story that makes absolutely no sense. They will instead refer to statistics that help them tell lies.

I prefer to listen to common sense.

America is on the verge of a credit collapse. That's what is happening today.

The Fed and the Treasury see that and they are full-out printing money to stave this crisis. They need you to buy those automobiles before GM and Ford collapse. They need you to buy those consumer electronics for the holiday gift-giving. They need you to pay your mortgage, and will buy up enough bonds in the market from Humungous Bank & Broker to keep those credit card rates and mortgage costs from putting millions of consumers under water, and at their employer's pay window demanding higher wages " just like the transit workers of NYC today.

They need to be able to show you that there is no inflation today because they know that those wage demands will show up in higher inflation tomorrow.

So, yes, the bond market will like these stats, and the equity market will be temporarily mollified by these stats, but where does common sense (and the NYC transit worker) tell us that capital markets are headed?