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<p>[QUOTE=&quot;InfleXion, post: 2662008, member: 29012&quot;]I like your avatar, even better than mine :]</p><p><br /></p><p>My take on this uptick is due to the Fed finally getting around to raising interest rates. Gibson&#039;s Paradox states that contrary to conventional wisdom that high interest rates result in higher prices, not lower prices. This is because price inflation is not necessarily the result of monetary inflation (low interest rates), and price is correlated to the interest rates themselves as a result of the wholesale price index. Monetary inflation increases potential monetary velocity, and actual monetary velocity causes price inflation, but that is an indirect correlation and is independent of the forces in play regarding Gibson&#039;s Paradox. That is if you want to believe Keynes. I think Keynesianism is the definition of insanity (printing money to combat the negative effects of money printing), but his observations regarding Gibson&#039;s Paradox were based on real data albeit while a gold standard was in effect so the scenario is not identical to today either. In any case, it makes sense from the very basic perspective that if you are paying higher interest then you&#039;re paying a higher price.[/QUOTE]</p><p><br /></p>

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