Citigroup management gets a great deal; you and I not so much. Consensus on right sizing the fiscal stimulus increases by about $100bn per week. The rest of the world drags its feet on anything approaching an appropriate set of monetary and fiscal policies (yes, I’m talking about the eurozone again.) Where does this all point?
It points to inflation. Inflation has many drawbacks and brings its own serious risks, but inflation is better than the alternative which, as President-Elect Obama said on Saturday, is now a deflationary spiral (falling wages and prices). The policymakers are going all in and the question now, we argue in a piece on WSJ.com this morning, is whether inflation still lies within their reach.