Bernanke's commodity boom is starting to really hurt business and Ben's claim that these price pressures are transitory becomes ever more ludicrous. Interest rates have no way to go but up and now investor sentiment has left no-one in the bearish camp.
Inflation is NOT good for business. Sure, profits and profit margins are apt to rise as historical costs are lower than price paid currently, but that is a temporary phenomenon. As interest rates must eventually rise, earnings will be pressured further and price earnings ratios will contract.
In the 1970's for instance, prices rose by 10% p.a. as stocks as measured by the Dow Jones Index stayed flat for 13 years.
Once we enter hyper-inflation, stocks will be of course better than Dollars, but Gold will be even better.
I know, I've been bearish and wrong for too long, but owning stocks here just doesn't compute.
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