Monday, June 16, 2008

Comment on inflation and toothpaste

Karl Otto Pohl, former president of the German Bundesbank, said "it's [inflation] like toothpaste. Once it gets out of the tube, it's very hard to put back". Inflation expectations are the key issue right now. The question is whether the price shocks that we have seen in the commodity markets will be converted into beliefs that inflation will rise around the world.

No comments: