Talk has now turned from deflation to inflation. The Fed supposedly agreed to raise interest rates once before the election and then let nature take its course until November.
Doug Henwood seems to have been more correct than I was in his belief that the economy would start to recover. Of course, given the low interest rates and the fiscal surplus, the weakness of this recovery is unprecedented. Given the lack of robustness, how much of an interest rate hit, can the economy take without reeling. If interest rates rise here, how much will capital inflows to the United States damage fragile (?) Asian economies? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
