Are you concerned with inflation?

[Pharaoh]

I think that, as soon as emerging countries begin to export inflation, then we will also get it ant then it will be very difficult to control it…

I wonder if we could implement protectionist tariffs against imported inflation. I mean, why settle for all that cheap, low-qualify inflation made in offshore sweatshops being dumped onto the world's markets when you can get high-qualify domestically manufactured inflation made right there in your own country.

I think I'll write to my Senator and see what he has to say about this.

 

[elisab]

Another confirmation that the ultra expansionary monetary policies do not produce inflation comes from Japan. Retail Sales -0.2%!

 

[Pharaoh]

If credit is tight, it takes a lot of money to jump start things. Consider how much money had to be pumped into the US economy via QE, QE-2, QE-unlimited. If consumers are scared and/or banks are tight with credit, consumer sales will fall even if a pile of money has been tossed around.

 

[elisab]

The Fed is not worried concerning a too high inflation, but most of all about the deflation and will do anything to raise the CPI.

 

[Pharaoh]

The Fed is not worried concerning a too high inflation, but most of all about the deflation and will do anything to raise the CPI.

Sadly, I think you are right.

I believe the fear of deflation is rooted in the Great Depression. When the massive deflation began, the thoughts of both people and businesses were "Why buy today when I can buy it for less tomorrow or next week?". The killed business growth and consumer spending at the same time and made a bad situation worse.

It's too bad. Very modest deflation for a reasonable period won't convince companies to give up expansion plans and consumers to postpone purchases. It would be of immense value to those who want to try to save up their money for larger ticket items.

 

[elisab]

As soon as the Fed has shown its concern about inflation, oil has sprinted upward… A nice way to create inflation in a world of oversupply.

 

[elisab]

TIPS at the moment are serving a very low future inflation rate, but may represent a good entry chance after the recent sharp retracement: what do you think?