Saturday, March 26, 2011

Problem Time

So a post on an FT blog explores the connection between surging global demand and rising commodity prices, a connection that seems intuitive enough. If that’s true, though, that implies some very unfortunate things for the economy in general.

If you believe the problem with the U.S. economy in general is its lack of demand, then you’d like to stimulate it. But if all stimulating it can do is raise commodity prices and thereby pass through price increases in that way, there are real troubles in the short term.

In the longer-term, there’s the real and unanswered question over whether there’s enough useful stuff on the planet for everyone to share on a reasonably equitable, reasonably prosperous basis.

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