Tunica, there is no doubt that health care might become an engine of inflationary pressures (reduced supply in face of increasing demand), but will it cause a major inflationary wave? I am not sure, Health care is now about , what, 15% of GDP? In the rest of the economy, we have excess capacity, from steel to autos, to gold, and to semiconductors and some segments of the IT space. In rough numbers, we have about 22% of GDP with some inflationary pressures (I am adding to health care another 7% for energy, but most of the inflationary impact of crude being around $30, is already in the "numbers") and a good 50%, stale and the balance of 28% essentially in a deflationary phase, it may all balance out, I really do not know for sure.
Zeev |
