FundAce,
Great, a difference of opinion! :-)
I just don't see the inflation. Have felt for a long time that the
long term problem is the potential for deflation.
Only asset class showing inflation is stocks. And the monetary
authorities have an abysmal record of stemming that, worldwide. At
least without causing a crash.
Imagine the contraction of wealth if the last asset class that's
growing strongly starts to drop. Even if it's only a run of the mill
bear market. (that's 30% plus) Happened every 6 years this century,
on average.
Incomes, debt levels, trade deficits, housing market, autos, all can't
take higher rates.
Our government is financing their debt with short term paper like
never before in our history.
A drop in stocks, if not controlled, could set off a chain of events
that could be a catastrophe.
I really think that consumers are retrenching already, although it
isn't obvious yet.
This gives them another reason to pull in their horns.
The market will take care of itself, eventually. If they push it, I'm
afraid it will have unintended consequences.
Sorry for being off topic, and such a Cassandra, but I am truly
afraid!
Dwight
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