A Quote by Sam Zell
The single biggest issue that I'm very sensitive to is inflation. I'm very concerned that this extended period where the interest rates were quite low and stimulated a lot of activity could breed inflation and create a problem for us.
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If we were to underrun our inflation objective over a period of time that we tried to increase interest rates, I think that would be worrisome.
The government will always tell you that it wants low inflation. The real issue is the horizon over which to bring inflation down.
If you put tariffs in place, it creates inflation. If you put inflation in place, you have to raise interest rates. You raise interest rates, and stock markets shouldn't be so high.
What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation.
Very deliberately, the central bankers have punished savers, pushing interest rates so low that any truly safe investment - and older people are always advised to play it safe - yields a negative return when inflation is factored in.
Of course, looking tough on inflation is part of any central banker's job description: if investors believe that inflation is going to get out of control, you end up with higher interest rates and capital flight, and a vicious circle quickly ensues.
Near-zero policy rates that may be considerably expansionary in an economy with high inflation could be contractionary when inflation is too close to zero, or worse, deflation has set in.
Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.
For equity markets, the combination of low interest rates, strong economic growth and low inflation has proved very beneficial, with global share markets rising solidly in each of the past three years. This has been underpinned by strong growth in profits so that, notwithstanding the rise in share prices, P/E ratios have been declining on average.
Because food and energy prices are volatile, it is often helpful to look at inflation excluding those two categories - known as core inflation - which is typically a better indicator of future overall inflation than recent readings of headline inflation.
We know that inflation distorts economic behavior. In the 1970s, a combination of high tax rates and inflation prompted investors to flee production in favor of protection.
The risk is that as we come out of this recession, we'll have so much debt to finance, we'll either have to have inflation or very high interest rates to continue to borrow the money, or both. That's a risk.
If you look around the world and see all the different countries struggling to get away from very low inflation rates with economies not nearly as strong as ours, you want to make sure we avoid those circumstances.
Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling.
The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.
The essence of the problem is that the war against inflation is over, ... Ever since 1979 the Fed was fighting a war against inflation, and you always knew which way you wanted the inflation rate to go over the long run -- down.
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