[Moonman62]

Yes, the money supply is expanding, but so are deflationary forces throughout the globe. It's impossible to keep track of it all. Thus market signals need to be used. Commodities are a legitimate signal, but one must account for all the reasons why they are going up. It's just not money supply. The yield curve indicated that the Fed should have stopped raising rates awhile back.

[familyop]

"Yes, the money supply is expanding, but so are deflationary forces throughout the globe."

Yes. And BTW, the yen is less than a penny on the US dollar.

Please permit me a little parabolic irony here. Are the Japanese starving to death or otherwise living in terrible poverty now? Should a gradually lower US dollar toward the yuan signal the end of the USA and that we should all run for our lives?

[palmer]

The yield curve indicated that the Fed should have stopped raising rates awhile back.

Bernanke said that was just one thing he looked at and he's right. The low long term yields don't necessarily indicate low inflation or deflation expectations. Often long term rates fall just because of anticipation of falling short term rates. Anyway, the world is awash in long term money as well as Fannie Mae, GM and other had incentive to borrow short and lend long. That incentive will undoubtedly come back as the Fed caves to political pressures and lowers short term rates. As for deflation, what I see mostly is a huge glut of Chinese and now Vietnamese and other manufacturing undercutting each other.