joi, 12 iunie 2008

fiat lux err...currency

there goes a nice article on one of my favorite web sources, an article that gives the common sense to inflation. briefly it points to (amongst other things):
  • the correlation between inflation and the printing of fiat currency
  • graphical correlation between annual inflation rate and purchase power loss
  • a different POW on the commodity prices explosion.
I'll just get the quote on the last point:

"The true culprit to the rising prices globally is the acceleration in fiat currency printing, a trend that is not likely to end soon. Moreover, the trend is likely to remain for another 10-15 years here in the US as shown in Figure 6. As this is likely to be a long term theme, investors will be rewarded by investing in REAL assets such as commodities, and the so-called “commodity bubble” will continue bubbling higher while the financial press stare baffled at $150 oil. Is oil really that high, or are is our dollar’s purchasing power that low?"

nicely put...

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