Last night, US Treasury Secretary Snow was doing what all recent holders of his office have done – namely, he was blaming the rest of the world for America’s self-inflicted woes and trying to get them to inflate a little more as an offset.
This is what we could call the McDonald’s school of economics, as is explained here
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Sean — any idea when this will break? The Fed can keep the game going a long time by finding new “markets” for the dollar and by oscillating the disinflation and reinflation – but it seems like every cycle is putting us closer to the “accept your medicine” or “hyperinflate”. Now that consumption goods are rising, I expect it’s catch-22.
The market is going to have the last laugh. But over the interim, deflation is very nearly a pure political choice, barring some major unforseen cross-collateral catastrophe (even then, it seems like temporarily validating all claims until it could be sorted out would hold the line). Just need a leading indicator of the winds of change … any ideas?
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