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Inflation: Far Away or Already Here?

I'm hit with loads of skepticism whenever I write something that plays down the risk of inflation. "Why the Fed Isn't Igniting Inflation" (New Business, June 29) was no exception. I argued that the Federal Reserve's money printing is just offsetting the deflationary effects of huge consumer cutbacks. Most readers disagreed, with some saying higher prices are already here. One common theme: The little guy is going to lose. —Peter Coy

Nobody said that inflation would occur immediately. Remember: The stock market crashed in 1929, but the economy didn't hit rock bottom until 1933. The Keynesian experts all assure us that the Fed will contract the money supply after the economy recovers or deflation hits bottom. One problem with the logic used by these brainiacs: the national debt.

Screen name: Gary

The destruction of credit is forestalling inflation, not frugality. As long as banks won't lend, the monetary supply will never enter the economy, so it can't cause inflation. Banks aren't, and shouldn't be, lending because of rising unemployment and decreasing collateral values.

Screen name: expres

The article is based on one severely flawed premise: that consumer commodity prices depend on the broke U.S. consumer alone. The rest of the world's living standards and demand for materials is ever-growing, offsetting any small reduction in U.S. demand. In my manufacturing business, the cost of raw materials is at an all-time high, and international shipping costs are astronomical.

Screen name: Vaclav

No inflation? Please! From gasoline to milk to Quarter Pounders to newspapers—all must-have consumables in the public's eye—consumers are seeing higher prices. Step out of the tower. Down here where the rubber meets the road, the real story is an increasing inability to pay for everyday items.

Screen name: T. Agn Yupi

Health-Care Reform: Paying Specialists Less Isn't the Answer

President Obama's efforts at reforming health care are admirable, yet I question his focus ("Bitter Medicine for the AMA," New Business, June 29). It is true that primary-care physicians deserve more compensation. But reallocating funds from one group of physicians (highly paid specialists) to another (general practitioners) is not the way to go. In today's economy, high malpractice premiums, low reimbursement levels, and other pressures from insurance companies have already made it difficult for many specialists to practice.

Lauren Kopal


The Downturn: When Crisis Meets Opportunity

In these times of doom and gloom, it was refreshing to read about corporate risk takers who use the global downturn as a growth opportunity ("The Risk Takers," Cover Story, June 22).

I was particularly impressed by the strategy adopted by Procter & Gamble (PG), which boosted its 2009 research and development budget and launched the biggest capital expansion in its 171-year history.

Weiji, meanwhile, has been adopted in our consultancy's vocabulary. Only the Chinese could come up with a word that combines crisis and opportunity!

Karl Pagac President

Pagac & Associates


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