So we can put a check by Paul Kasriel’s name for inflationistas because he has come out today with a report saying he believes it is inflation over the medium term which is the greatest risk to the economy.
I will not keep you in suspense. I believe that the greater risk for the global economy [...]

You have to hand it to Marc Faber; he knows how to grab your attention. Earlier this year, I posted a video of him saying “don’t underestimate the power of printing money“, a quote that has become mantra for me.  Basically, he believes a rising tide of quantitative easing is going to buoy stock markets [...]

For the time being, I am more worried abut the potential inflationary effects of quantitative easing than about the deflationary impact of deleveraging.  But, the latest news from Ireland shows us that deflation is alive and well. This comes via the Irish Independent:
Consumer prices recorded a second annual drop in April as the cost of [...]

The following is an excerpt from Murray Rothbard’s excellent book, “A History of Money and Banking in the United States.”  The passage outlines how the gold standard prevented governments from using inflation as a device to manipulate their currencies, something of great concern to China now in 2009.  However, Word War [...]

Marshall Auerback here with a few thoughts about the monetary policy end game.
Bernanke has to continue to make hawkish comments about inflation so as to avoid a complete blow out in bond yields, but the the dirty little secret is that inflation is the way out of the debt trap, along with [...]

This comes via Bloomberg:
Global central banks risk inflation, currency devaluation and a “big consolidation” in bond markets by pumping cash into their economies, the People’s Bank of China said in its quarterly monetary policy report.
The Federal Reserve and the Bank of England this year started quantitative easing, or printing money to buy government bonds, a [...]

Martin Hennecke, a frequent guest on CNBC, is recommending that investors who have fled to cash and government bonds need to rethink that strategy.  He sees inflation on the horizon and warns that western sovereign bonds will suffer as a result and sitting on cash will be throwing money away. 
The crux of his thesis [...]

I wrote a note regarding the Q1 2009 GDP report which mentioned that the price deflator showed a large pick up in actual inflation. While I don’t think we are off to the races immediately, I do see inflation as a medium-term threat and this was a reminder.

The guys over at Brown Brothers Harriman take a different tack. So, in the interest of giving you a different view, I am posting what they had to say. I will bold the parts that I believe are most important to their argument. While I would point out that the Price deflators have accelerated, it is hard to debate the logic in much of what they say regardless of your medium-term concerns about inflation.

Ten-year treasuries are yielding about 3.15% now, that is a significant increase from a yield of just over 2% in December. I for one, thought that Treasuries were in a bubble at 2% (See my post, “Treasurys are in a bubble” from December 08). The thing is I also thought the economy was so weak and the Fed so manipulative that the bubble would get even worse. Bad call. Of course, that didn’t happen.

The U.S. GDP report for the first quarter of 2009 was pretty awful.  GDP came in much worse than expected at an annualized  -6.1% below Q4.  Here are a few data points (all referencing real GDP data):

The numbers were much worse than expectations of  -4.6 to -4.7%
The -6.1% comes on the heels of a -6.3%, [...]