May 29, 2008

Inflation and the next big bull market

First off, the bad news. Inflation, using historical calculations, is running at 11%. That's pretty bad. What's worse is that high inflation tends to kick up interest rates dramatically. So get ready to pay more for those credit cards.

The good part? High inflation periods usually depress the cost of financial assets, especially equities. And it's always a buying opportunity. For one thing, high commodity prices lead to periods of rapid growth in the supply of those commodities either through new technologies or expanded production. ALWAYS. Humans adapt and grow around constraints.

Nothing lasts forever, boys and girls, frankly I'm thrilled at the prospect of being able to buy some good stocks at a nice discount. You should be as well.

Posted by mcblogger at May 29, 2008 03:45 PM

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