Sunday, May 10, 2009

Inflation and Quantitative Easing

Econbrowser starts to worry about inflation. He posts the following chart of various commodity prices since the Fed announced its QE stance on March 18 and concludes: "But this is a trend the Fed needs to watch closely from here, and could prove to be a significant limiting factor on how much the Fed can hope to achieve from monetary stimulus. Because I for one do not think it's a good idea to call for a replay of the 2008:H1 commodity market show"

Interesting how Gold did not move compared to industrial metals.

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