The further we get into this weak recovery, the more it looks like a weak recovery is what we'll be enduring for a while. As resource-slack-absorbing growth remains in the distance, investors seem to be taking a less-concerned attitude about rising inflation, at least for the time being. The recent falloff in oil prices is especially helpful in that regard.

Along with a leveling of gains in equity prices over the past couple of weeks, at least some money has come back into bonds, taking the top off of a spike in mortgage rates which saw the conforming 30-year fixed-rate mortgage run from 4.50% last October to as high as 5.50% earlier around February of this year. This week's average of 5% for that most common instrument is almost exactly halfway between those two bookends. But even if inflation isn't a great concern, prices certainly should be, and may be at the heart of the recent decline in rates.

It should be noted that popular measures of inflation only gauge the rate of change of prices, not the actual price levels themselves. It's also worth noting that everyone of us has a personal inflation index, since your choices and purchases dictate whether you are affected by the rising price of an item or items. After all, if you don't smoke, you don't care that the price of cigarettes has increased by 100% over the last few of years... but if you did, those increases might affect your spending patterns. You might cut down spending in other areas, try to use coupons or change to a less-expensive brand, for example. On the other hand, though, if you're not purchasing a computer, you don't care that you can get a much faster, more powerful computer for the same price you paid for your older, slower one, which counts as a price that is declining.

There are some more or less universal price increases which affect everybody. Although there are others, food, energy and clothing costs are at the top of the list. These day-to-day items do matter, since increases in them absorb a considerable portion of the consumer pocketbook on the most regular basis, and are largely unavoidable. People need to eat, heat their homes and transport themselves from place to place and cover themselves to some degree. With incomes only increasing meagerly, these increases eat up more and more of a share of available income, and should the become too costly, other spending patterns can become affected.

Prices may rise to a level where they are consuming income at a most painful clip... then level off. Measures of inflation may show the increases, month after month, and of course investors become concerned and interest rates may rise. However, when prices level off, the rate or change falls to just a small increase or even to no increase at all, inflation concerns wane to some degree. In this way, even though the rate of change has returned to more favorable levels, actual prices paid by consumers are still at levels which create changes in their spending patterns.

When oil shot up to as high as $150, a very abrupt shift in spending happened, either creating or certainly contributing to the recession which followed soon after. To blame fully or not, gasoline at $4+ per gallon certainly did take its toll on the economy, as these price increases find their way into everything to some degree (think fuel surcharges and high freight shipping costs).

Mortgage rates are a good reflector of both the current an potential economic climates. As prospects rose last year and it looked as though we'd be running a closer to full steam by now, both underlying and mortgage interest rates marched higher. As the reality dawned that we're in for a slow slog of a recovery, and that a full or more robust recovery isn't coming real soon, interest rates have stepped back down, and with the "unofficial" start of Summer starting to loom in the windshield -- Memorial Day just a couple of weeks away at this point -- we could be in for a slow Summer, and one which won't even have the Fed's QE2 program to distort it.

Not that we expected them to, but mortgage rates went down a tad somewhat this week. Now that we're a near-equilibrium -- halfway between valley and peak -- do they really have the legs to keep falling? Absent an additional sign of considerable economic slowing, probably not, and they may find a home at these levels for a little while.

Have you ever wondered who first uttered the phrase, "You gotta be kiddin' me?" (Parental discretion advised.)

Well, it just so happens to have originated through the Father of Our country, way back when George Washington crossed the Delaware River with his troops.
There were 33 in Washington's boat. It was extremely dark and storming furiously and the water was tossing them about.
Finally, Washington grabbed Corporal Peters and stationed him at the front of the boat with a lantern. He ordered him to keep swinging it, so they could see where they were heading.
Corporal Peters, through driving rain and cold, continued swinging the lantern back and forth, back and forth.
Then a big gust of wind and a wave hit and threw Corporal Peters and his lantern into the Delaware. Washington and his troops searched for nearly an hour trying to find Corporal Peters, but to no avail. All of them felt terrible, as the Corporal had been one of their favorites.
Washington and his troops landed on the other side, wet and totally exhausted. He rallied the troops and told them that they must go on.
Another hour later, one of his men said, "General, I see lights ahead."
They trudged toward the lights and came upon a huge house. What they didn't know was that this was a house of ill repute, hidden in the forest to serve all who came.
General Washington pounded on the door, his men crowding around him.
The door swung open, and much to his surprise stood a beautiful woman. A huge smile came across her face, to see so many men standing there.
Washington was the first to speak, "Madam, I am General George Washington and these are my men. We are tired, wet, exhausted, and desperately need warmth and comfort."
Again, the Madam looked at all the men standing there, and with a broad smile on her face, said, "Well, General, you have come to the right place. We can surely give you warmth and comfort. How many men do you have?"
Washington replied, "Well, Madam, there are 32 of us without Peters."
The Madam said, "You gotta be kiddin' me."