"As recently as 2003, many U.S investors were worried about deflation. Investors feared that the US economy, characterized by falling prices for technology products, sky-high productivity growth and spare capacity would beging to resemble the moribund economy of the Japanese. In Japan, it was thought, interest rates already at .025% meant that economic stimulus had failed. A deflationary climate meant that businesses lacked pricing incentives and an already sluggish consumer was further encouraged to postpone. But hardly two years later, with US productivity growth slowing, oil hitting all-time highs, and the dollar collapsing, worries about deflation in the US economy seem a far-away dream. Investors are just starting to awaken to another possibility, the so-called I-word: inflation. While it is not clear that it is here yet, an attentive ETF investor will be aware of, and possibly prepared for, an inflationary economy."
Is Inflation Back?:
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