Great job as always with your commentary. I'm eager to see the new stuff you have coming out.

And as always best wishes to you and your family.

A few things:

1. I never pay attention to what the TH's have to say on CNBC or any other financial channel and keep the TV on mute -- the only exception is in the morning (so I can hear the headline financial news) and if I happen to see a guest I respect (this is rare) or breaking news;

2. I never read sell-side analysts reports anymore. NEVER. I don't even pay attention to upgrades, downgrades or price targets, except (1) to identify the catalyst for a price move, and (2) as a contrary indicator when too many analysts are leaning the same way, positive or negative.

3. I think you see, as I do, that ultimately we're returning to a global rate cutting cycle. It may take longer in the US, and could perhaps require a financial accident, obvious economic weakness or a stock market sell-off, but it will come. And I agree with you that this will stock money and credit growth -- i.e., inflation. It may not happen if an exhausted population starts to put money under its mattress, and it may not filter into CPI because of worldwide overcapacity and the China/India effect, but I'll bet we're in for another round of inflation.

The sad thing from a public policy perspective is that monetary and credit inflation won't necessarily kill the stock market, as it could inflate along with other financial and commodity-based assets. I say this is "sad" because it will only widen the gulf between the haves and have-nots; in fact, it is likely that it will create more have-nots -- more people who depend on wage growth rather than asset growth for subsistence will be left behind.

This can persist until either (1) the have nots reach a critical mass in numbers and self-awareness that they demand policy changes (unlikely, since it's very difficult for even the smartest economist to understand the "true" nature of "inflation" and its corrosive effect on society) or replace the party in power (but will the democrats really be prescient or willing enough to turn the tide from the asset-based society to the wage-based society? I'm not so sure); or (2) the price of oil and other essentials becomes so expensive that the Fed takes Paul Volcker-like draconian monetary measures and induces a recession (since a recession would have the salutary effect of wiping out overcapacity, inducing savings (hopefully), and shutting down the manic leveraged speculation we see now) -- but do we have the political will and awareness like we did (or, more likely, like Volcker did) in the late '70s/early '80s to do what is right?

Right now -- perhaps just for this week -- I'm identifying oil as our best hope. For so long as monetary policy remains "accommodative" --and despite the Fed's measured rate increases, it has remained accommodative, as the Fed has been too measured -- I believe that oil will stay with its cyclical up trend. I do NOT think there will be a sustained and meaningful correction in the oil price until monetary policy becomes at least neutral, if not restrictive. Don't get me wrong -- I find the Peak Oil arguments compelling, but Peak Oil only explains part of it (as does China). The other BIG part is liquidity.

As an aside, even if monetary policy becomes restrictive and oil corrects meaningfully and on a sustained basis, I believe that Peak Oil will eventually ensure that it goes to $100 a barrel, but that is a ways off under the restrictive monetary policy scenario (but is NOT, in my opinion, under the accommodative monetary policy scenario).

And finally, as you might expect, I do not consider climbing oil due to supply/demand imbalances to be "inflationary." After all, it is merely a reflection of supply and demand, and not uniquely attributable to monetary and credit growth.

The Conference Board reports that they'll soon reduce the negative weight of a narrowing yield curve, which is one of the ten components in their Leading Indicators.

http://www.conferenceboard.org/economics/bci/pressRelease_output.cfm?cid=1

Another point:

Seasonally adjusted M-3 rose 18.1 billion last week, is up 42.2 billion over 2 weeks, is up 64.0 billion over 3 weeks, and 152.6 billion over 12 weeks.