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Investors Will Watch as Inflation Dominates the Spotlight This Week
Investors better keep an eye on bonds this week.
While the stock market may be more fun to follow, fixed income is often a stronger gauge of investor expectations of the economy, future U.S. Federal Reserve policy, and inflation.
With the consumer price index (CPI) safely in the books for another month, economists can now turn their focus to wholesale inflation with the release of the May producer price index (PPI). Economists, mistakenly, often disregard the energy component of this data each month and focus mainly on the so-called “core†releases – which excludes “volatile food and energy prices.â€
While food and energy…
17Jun2008 | Money Morning | Comments Off | ContinuedHouse of Cards
Economic theory tries to deal with a limited number of factors and the mechanisms by which they interact. The main factors are population, food, energy, property, and manufactures, all of which are physical realities capable of being counted. They are the beans that bean counters count with. There are four mechanisms of exchange: money, barter, markets, and allocation. These are the mechanisms by which the beans are exchanged.
Different economists have put emphasis on different factors. David Ricardo, the classical economist of the 19th century, was a banker who gave special attention to money; Thomas Malthus, another founder of 19th-century theoretical economics, paid…
14Jun2008 | Whiskey and Gunpowder | Comments Off | Continued
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