People on the Diane Rehm show (Sebastian Mallaby) said that he would like to see Chinese currency to appreciate, which I believe will put some inflationary pressure into the US economy and the current rescue plan can be certainly viewed as inflationary.
Is inflation really bad for now? Probably not, since when inflation come, as long as it is not rolling up into double digits, the real interest rate can fall below zero to support an expansionary monetary policy. But, maintaining a healthy inflation level is very hard since people can index the price to inflation and as a result, the inflation can run out of control, how about some price control then? Wow, market is getting killed little by little.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment