Old hand Pat Buchanan chimes in today commending the president for tacking to the middle. Based on his record of bipartisan compromise since the election, including his Arizona speech, Pat rates the president "a survivor... with an almost Nixonian capacity for maneuver."
So that makes him a shoo-in for reelection, right?
Maybe not. The question is: when will inflation kick in after the enormous monetary stimulus of the last two years and the stimulus from "QE2" that began last fall? Jim Johnston from Investors Business Daily, quoting Milton Friedman, thinks that the president has got the calendar just right.
Six to nine months after an injection to the money supply, there is a short-term increase in economic activity. After 24 months, inflation appears and is persistent until money growth is slowed, another recession occurs, and 24 months pass before the inflation is abated.
If these lags are superimposed on the nation's political calendar, there is a disturbing conclusion.
A short-term increase in economic activity will occur before the 2012 presidential election, and a virulent inflation will occur after the votes are in.
Maybe. But I have a suspicion that the monetary easing already committed since the economy turned in early 2009 is going to get inflation going this year. So 2012 will be full of demands to know what the president is going to do about inflation.
All that means, of course, that making an inflation bet is not too late, even now. We are not yet well into a classic flight into real values. We are just in the early stages, where sophisticated people are still laughing at the stolid types that are buying coins and commodities.
Then there is real estate. I know, everyone "knows" that real estate is finished. But with the US government printing lots of dollars, it might not hurt to borrow some of them and pick up some deals. Remember Mr. Potter, the evil small-town banker. When everyone was losing their heads, crying sell, sell, sell, Mr. Potter was buying.