I don’t normally like to drop links to my blog in comments but I was quite amazed that someone else is actually reviewing both Grant books which I (tried to) did as well. Neither of my reviews is all that great but you can check them out on my blog.

http://www.four-pillars.ca

Search on the book title “Money of the Mind” and “Trouble with prosperity”.

I think the spam filter ate my original post because it had two links in it.

Mike

It’s hard to disagree with your thesis that Fed easing will eventually result in inflation; however, don’t forget that they are facing serious asset deflation in the housing market, which for most people is their largest asset. Both on a political and economic rationale, I think they will act to forestall that deflation, and accept some inflation otherwise. Furthermore, given that cyclically inflation typically peaks around the beginning of a recession, as it is a lagging indicator, the FOMC should have somewhat of a tame inflation headwind in the near term, and that will provide them cover to ease. More ingrained, secular inflation takes longer to become anchored in expectations, and I don’t think that will become a problem until 2009 at the earliest. Your 3% Funds target mid-2008 seems very realistic to me.

Steve