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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (262317)	4/23/2008 5:49:56 AM
From: c.hinton	Respond to of 281500

Good point... but one must never forgt the effect of inflation expectations on interest rates. PS.there is also the theory that moderate inflation spurs investments since holding cash in the mattress is a no winner. Inflation is also a way of negating contractual salary raises when profits are weak. The problem is that both are underhanded market manipulations. ... One reduces the incentive to hold cash reserves...(IE banks today) The other saves the employer money in times of weakness but does not guarantee a reciprocal benefit to employees once the economy strengthens.