terça-feira, 9 de maio de 2006

Inflation is back again

"Inflation is back again, an incredible development considering the hard experiences we and the rest of the world had with this debilitating disease from the late 1960s through the early 1980s. Inflationary symptoms are already rampant in the commodities market. Gold, oil, copper and other items are approaching or exceeding rates of price increase not seen for a quarter of a century. In the months ahead inflation will spread through the rest of the economy here and overseas.

(...) For 4,000 years gold has been the best barometer of inflation, the Polaris of stable money. In the late 1960s it jumped after decades of stability, and inflation soon followed. The same phenomenon repeated itself in the early 1970s, when gold soared, and again when it roared ahead in the late 1970s. Each rise was followed by a disastrous round of generally rising prices and ever higher interest rates--and each ended in a recession. Today the price of what Keynes called the barbarous relic is the highest it's been since 1980, up 150% from its 2001 lows.

(...) Sadly, the Fed's new boss, Ben Bernanke, fully disdains gold as a useful monetary tool, sharing John Maynard Keynes' prejudice against the yellow metal. Like most of his economist peers Bernanke thinks that the traditional gold standard, which governed monetary policy in Great Britain and eventually elsewhere from the early 1700s to the 1930s, caused or at least deepened the Great Depression. " Forbes

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