America's imagined inflation problem

As the nation struggles with the worst downturn since the Great Depression, Washington remains fixated on a non-existent monetary threat

Coffee's getting cheaper.

Kraft announced Tuesday it will cut the wholesale prices of Maxwell House and Yuban by 6 percent, or about 20 cents a pound. Kraft is playing catch up with competitor JM Smucker, which had previously cut the price of its Folger's and Dunkin' Donuts brand coffee.

Heinz announced this week that it would be focusing its line of business on cheaper products and smaller sizes, hoping to appeal to consumers who now shop in dollar stores rather than regular grocery stores.

Meanwhile, here on Planet Washington, we remain obsessed with the chimerical menace of non-existent inflation.

Through the freezing snowstorm, leading politicians insist that the country is being scorched by a heat wave.

The two leading Republican candidates for president, Rick Perry and Mitt Romney, have both put themselves on record against any further monetary easing. Texas Gov. Perry even jocularly urged mob violence against the chairman of the Federal Reserve unless he tightened up.

Leading Republicans on Capitol Hill agree — not with the threats necessarily (those are Perry's unique contribution), but with the obsession with imminent inflation. They genuinely believe their warnings: In 2009, the number two Republican in the House, Eric Cantor, took a substantial personal financial loss by believing The Wall Street Journal editorial page's warnings of rising inflation and interest rates. He invested in a bond fund that shorted U.S. Treasuries. Instead, interest rates collapsed to 2 percent for the 10-year Treasury bond, and bond prices rallied.