This week we look at inflation. Is it just over 2%, giving the Fed room to cut rates, or will it be closer to 4% by the next FOMC meeting, making a rate cut problematic? How do they get those numbers? When and how can two opposite things be true at the same time? The answer depends on how many dimensions you are living in when you are asking the question. The Fed is going to be faced with a very difficult decision at its next meeting, and there results of there deliberations will be felt by you.

But first, an observation about a milestone passed last week. I started this letter 7 years ago with about 2,000 names and it has grown to where it is sent to more than 1,000,000 of my closest friends each week. For the last year, this letter has been translated each week into Chinese and posted on a Chinese version of Thoughts from the Frontline web site by my Chinese assistant Coryne Wei.

This last week we passed 1,000 subscribers that get the Chinese version. I know that is small, but it is a beginning. It will be interesting to see how it grows over the years. If you would like to get this letter in Chinese, you can go to www.frontlinethoughts.cn and subscribe.