Pop Goes Some Economic Bubbles. That & Inflation Aren't Necessarily a Bad Thing.

MWF (Friday) Briefing:

The G-8 will make an announcement next week to express concern over commodities being a challenge to the global economy.  Inflation is often the side product of growth, related to bubbles and innovation so it is a matter of trying to keep in check.  The dollar is coming back, though still quite weak against other major currencies.  That might not be all bad considering it makes American exports look like a deal.  The trade imbalance with China is still massive standing at $20 billion.  A lot of tough talking by fiscal types over this.  Asian markets took big losses, many of the indices down by half since Fall 2007.

• Economic bubbles, man's best friend.  Speculative fevers often emerge during times of major innovations and technological change. By definition, the impact of innovation is unpredictable. What will win out is impossible to predict. A bubble is capitalism's way of rapidly transforming an economy. Businessweek

• Asset allocation expert says go big on commodities exposure. Hard Assets

• The deal is officially dead. After first rebuff, Microsoft came back with a proposal to buy 16% of Yahoo at $35.  Yahoo then announced a search deal with Google that will add $250-$450 million per year to its bottom line WSJ  Wired or is it?

• Mass transit surge: Most riders since 1957. CNNMoney

• Consumer Price Index (CPI) rose .06% in May due to higher fuel and food costs. Department of Labor

• Gold ends the week with stiff losses as the dollar strengthens against major currencies lessening demand for precious metal as an inflation hedge.  Marketwatch