This article from BV talks about the inflationary pressure our economy is under due to increasing commodity prices. Combined with the weak monetary policy in the last 10 years there is too much money out there chasing too few goods. I think this situation we face is unlike any other we have seen before because of globalization. Will the continued growth of developing nations drive commodity prices higher? I don't know, but the Fed should be on alert.
Tuesday, February 19, 2008
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4 comments:
interesting to note that M1 has not grown, and has in fact slightly fallen, over the last few years. i think were going to see inflation moderate soon but for a short time. you cant take rates down from 300+bps and not see it show up in the data.
http://www.economy.com/freelunch/protected/fl_download_view.asp
The Fed cut rates too fast?
The coast is clear.
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