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Inflation and Growth: The data don’t lie

April 29, 2009

This morning’s GDP data had dismal negative AND positive numbers. The dismal negative number was -6.1% real growth. The dismal positive number was 2.9% inflation.

This table [click here] illustrates the phenomenon. The top line of numbers is inflation. The bottom line of numbers is growth. Inflation continues to dwarf real growth.

Rocky’s conclusion: Printing money creates inflation not growth. The Fed’s current trajectory will ensure a dangerously high inflation rate once the economy heals (whenever that occurs). US Postage Forever Stamps, TIPS, commodities and other investments that protect real purchasing power continue to be an essential part of any portfolio.

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