Friday, March 20, 2009

What drives inflation?

This is the most important question facing us now. The correct answer to this question is going to determine whether one makes money or not in the next three years. Can there be inflation when there is a recession? The 1970's certainly suggest so. Is it necessary that printing money leads to inflation? Japan of 1990's will suggest that need not be the case. Is it really possible to have sustained inflation without wage inflation? 

So, I thought it would be useful to read the history of the Weimar Republic as well as 1990s Japan. I ordered this book recently: Lords of Finance by Liaquat Ahamed, to figure out what happened in Germany in the 1920's. I have yet to figure out a good book on Japan. 

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