Thanks for the reply. Couple of thoughts which don't require one:
Yes, the dollar is weaker against the Yen/AUS and perhaps the Mark. Don't watch the mark to closely.
The first thought is a defacto devaluation of 30% must have implications for currencies still pegged to the dollar, ie Argentina and Hong Kong come to mind.
The second thought is that negative real interest rates suggest borrowing as an appropriate course of action, and a higher rate of inflation than the statistics would suggest.
Borrowing in the midst of deflation is not a wise move, so getting the actual real rate of inflation correct is important, for say CFO's pondering new debt offerings while people are still willing to cough up some cash.
Now I remember your comment on the price of Butter, which I had also noticed, amongst other things, but I'm not quite ready to admit higher inflation given the substantial declines in energy prices and the multiplier effect that can have on the economy.
Perhaps a reversal of this situation, which would help my OSX stocks recently purchased, would result in a more solid claim of negative real rates. Until then, I'm in the inflation is dead camp, looking out for worldwide recession, where debt should be abhorred. |
