Some quick thoughts on inflation.

There are a few things that concern me regarding inflation, I have listed them as bullet points.

1. Paul Volcker said that he is concerned with the Fed and Treasury seeking ‘the amount of inflation conducive to recovery’.
2. Bank of England are engaged in Quantitative Easing (fancy talk for ‘Printing Money’), they had a failed bond this week as well which means they will (the UK) have to reassess their par on bond offerings. That means paying more to get the money, to service these loans they will likely devalue Sterling further. This matched with increased money supply will bring inflation to the UK.
3. Increased inflation risk is being priced into bonds.
4. Investment houses are increasingly driving people towards resources as a hedge against inflation because inflation doesn’t reward savers, it rewards those holding assets.

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