Weekend Ponderings - Economy, Inflation, and how usual or unusual is it?
Saturday, March 1st, 2008
That seems to be the only thing that matters nowadays isn’t it? The economy, recession, and inflation. Earnings and buybacks do less for a company’s stock price than these macro concerns. Having not completely gone through the historical data, I don’t have hard evidence for anything I’m about to propose…just throwing this out for discussion’s sake. So, my main question:
HAS AMERICA BEEN LIVING IN AN ARTIFICIALLY LOW INFLATION ENVIRONMENT??
First, the implications. If we have been living in an artificially low inflation environment, then the Federal Reserve’s “comfortable” target range of below roughly 2% inflation per year might be too low (and wrong) for the environment we’re in today. Read the rest of this entry »
