I have several questions about the arguments offered by Steven Horwitz. If the inflation rate is really so low, one would think the government would be doing more to publicize this"wonderful" situation. The Bush Adm. has had no difficulty in repeating a great deal of questionable data with respect to Iraq as detailed in the latest Report offered by Congressman Henry Waxman.

My understanding is that there is no"fixed" basket, but that the government has shifted the mix with items which did reflect less of a cost increase than others.

Even if productivity is rising as suggested by Horwitz, lowering some commodity prices, the Federal Reserve continues to inflate the money supply. This has been a factor in rising stock prices, as in the 1920s, and especially with respect to home prices today much like, for example, the Florida land boom in that same decade.

At the same time with this flood of cash in the economy, there is considerable unemployment so that many persons are no longer actively looking for jobs, and with very low interest rates set by the Fed, a great deal of cash is seeking investment opportunities.

Today's Wall Street Journal had an interesting piece about the crisis in mobile home building and the large number of foreclosures. This is part of the whole Fannie May problem in which the Bush Adm. proposed a program of NO down payment for such homes. Surely, that would exacerbate the number of foreclosures among the 22 million Americans who now live in such manufactured homes. While we spend billions of dollars for nation-building and to bring democracy to Asia, our own people face a terrible employment and housing crisis.

With all of this conflicting economic data and controversy around, I can only reflect on my personal experiences of late.

I retired this year and we are selling a home in downtown Fort Lauderdale, FL. The price recommended by realtors, since this is a"hot" area with few properties available, is roughly four and a half times what we paid for it 15 years ago. The land alone now is apparently worth three times what we paid for the house and land together.

We also sold a triplex built and owned by Marina Const. Co., holding a note paying 7.25%. There is so much money out there searching for investments, that we have literally been besieged by mail, phone and email with investors seeking to purchase the note to the extent that we can bid one against the other. But in an environment flooded with cash, and low interest rates, where would I get a return like that, if I sold at, say, $ .95 cents on the dollar?

I'm sorry Steven, but with all due respect to your extensive financial data, I"perceive" from my recent experiences that we are in a period of Stagflation, and I need to make my investment decisions based on that assumption.