Outside the Box

A Kind Word for Inflation

June 23, 2008

This week's Outside the Box will challenge a few of your base assumptions. Paul McCulley, the managing director at PIMCO, offers us a kind word for inflation and the reasons that the Fed will be on hold for a lot longer than the markets currently think. And part of that is to avoid a real recession or even a depression. Getting this debate right is important.

These are indeed interesting times we live in. I look forward to being with Paul at the end of July on our Maine fishing expedition, where he can defend his proposition to the group of economists and analysts gathered there. Have a great week.

John Mauldin, Editor
Outside the Box

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A Kind Word for Inflation

No, I have not lost my mind. I'm fully aware that inflation is not kind to bonds, so offering a kind word for inflation is de facto offering an unkind word about my own business. Investment managers don't tend to do that. But facts are facts. And the essential fact right now is that the American economy needs an inflation rate above the Fed's comfort zone.…

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