Tomorrow the Fed will be announcing whether they will continue to raise rates or not and many investors seem to think that a pause is a highly probably outcome. Controlling inflation has been the reason for prior rate hikes and I believe it to remain the key variable. With this in mind, I thought that it would be a good idea to share with you the new GaveKal piece by Louis-Vincent Gave.
As my long term readers know, GaveKal produces some thought-provoking and highly intelligent research on the markets from a global perspective. Louis writes about how profit margins, income disparity and global economics are shaping the current inflationary environment. But he does not stop there, Louis further describes how these market forces are all affected by none other than Adam Smith's old "Invisible Hand."
I found this article to be exceptionally interesting, and, given the fact that the Fed is meeting tomorrow, a timely read as well. I think you will find it to be an "Outside of the Box" point of view.
John Mauldin, Editor
Outside the Box
The Invisible Hand's Impressive Work
Last summer, we published a small book entitled Our Brave New World. In the book (copies can be purchased on http://www.amazon.com/exec/obidos/ASIN/9889879018/frontlinethou-20 or www.gavekal.com), we attempted to show that, because of the rapid pace of change our world was experiencing, a number of the relationships which we, and many other economists, had used for decades were badly breaking…