While the Bush administration and its allies in Congress will tell you that towering budgetary and trade deficits as far as the eyes can see don't matter, the financial markets are telling us something else entirely.

U.S. producer prices shot up 1.7 percent last month, the biggest gain in nearly 15 years and well above expectations, as energy costs skyrocketed and food prices surged, a government report showed on Tuesday.

Even outside of food and energy, producer prices climbed a relatively swift 0.3 percent in October, the Labor Department said, well ahead of the 0.1 percent gain Wall Street had expected.

The increase in the overall Producer Price Index, a gauge of prices received by farms, factories and refineries, was the largest since January 1990 and easily outstripped expectations for a 0.5 percent gain.

U.S. bond prices fell and stock futures dipped, pointing to a weak market open, as investors turned nervous on inflation.

[...]

Perhaps more troubling from an inflation perspective, prices outside of food and energy continued a relatively steep march upward in October. Still, the year-on-year gain moved down a notch to 1.8 percent from the 1.9 percent registered in the 12 months through September.

>Link.

I am not looking forward to a period of high inflation like the 1970s. Really.