In the present article I am not taking a stand on whether price inflation will be high or low in 2008.However I will say this: If you are revising your inflation forecasts downward because of your expectation of sluggish economic growth, you might want to rethink that logic.
The Producer Price Index is out and it shows a change in intermediate goods in March 2008
But the Keynesian conclusion is rather obvious: the state, through its compulsory means, has to boost the level of aggregate demand in some way to stop the economy from falling into recession.
The very existence of a centrally planned apparatus changes the real economic data, and so changes what the "correct" number of cars should have been, even if we could agree on the criteria for correctness.
The increase in monetary pumping however sets in motion a new boom-bust cycle. Also, once economic activity starts to recover on its own (as a result of the improvement in the pool of real funding) any "help" from the Fed can only slow down the process of recovery.
This is an open thread to discuss the question I (and others) continually receive many queries about. What does your portfolio look like?
However modest in size, including possibly being actually negative, net investment represents the true source of most revenue and income.
