Sam,
It seems to me that the Fed has prescribed the medicine to fight deflation.
We have lots of cash, high real interest rates, a message that says spend, spend, spend. Next Greenspan stands on the podium and threatens even higher real interest rates. Spend more now before I do so he says. Mr. Greenspan is talking up inflation, and yes there is that labor push, if only supply was not so abundant we might see rising prices.
Greenspan is not doing much that says invest, invest, invest. That could make people bearish.
Of course, if we all put our money in CDs or T-Bills that might mess up his plans. At the moment we still seem to like to spend our dollars though. A good time to own labor as long as you do not build planes and perhaps soon cars.
Regards,
Lee |
