oregonrain

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  • Inflation Fears Are Overblown
    I tend to agree with the comments of Mr. Hart. I think the argument in the article are very mainstream really. I like the article for sure. But, what he is saying is look at the "core rate of inflation." That is exactly what the Fed is doing.

    I think if you look at the global situation inflation seems to be taking root around the world. I am not sure of the manner it is happening (not that smart) but it looks to me as if we are exporting our inflation to the emerging markets somehow. Any rocket scientists wish to comment on this idea?

    I think the deflationary issue is interesting. If I look at what is happening we have clear inflation in the commodity sector (inputs) but many manufacturing businesses or ones that are capitally intensive are saying that they cannot pass those costs along. So..this means to me that there is only one place that they can come from and that is profits.

    That indicates to me that many stock prices are going DOWN. The exception will be the (non financial ) service sector which will be more impacted from wage increases which the article correctly states are stagnant at best. Then we also have the downward trend in housing (which maybe just maybe ) we are seeing some slowing in the rate of decline.

    Put it all together and what we need is the "Goldilocks's FED." I am not sure they have it in them but we are on a tight rope that many people do not even seem to understand we are on.



    Jun 26 20:28 pm |Rating: 0 0 |Link to Comment |View article

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