Worthwhile Reading: Alan Blinder on Inflation v Deflation

In Sunday's edition of the New York Times, Alan Blinder penned what we believe to be a worthwhile assessment of the prevailing wisdom, which states that a potent bout of inflation looms inevitably in the near future. Blinder injected the article with a dose of contrarian sentiment that has largely been absent from the public discourse over inflation(that would be self-evident though right?). The bit we most appreciated though was Blinder's exposure of what appears to be a logical "blind spot" on the part of the public and investment community. Namely, commentators have focused on the inflation risk that would arise if the Fed were unable to withdraw the banking system's excess reserves quickly enough. This line of reasoning ignores the fact that an equally likely event - the Fed withdraws reserves too quickly - would have deflationary consequences. Of course, as we see it, that is but one of the many logical fallacies that abound in the investment world. Sphere: Related Content