Our thoughts on Inflation

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Copyright 2003-2011, All rights reserved. investwithcornerstone.com 7/14/2011 We believe there are a number of reasons for inflation to remain contained. 1) Labor in the US represents a primary input, and unemployment remains high. 2) Capital use ratios remain towards the low end of historical trends. 3) A large component of the Consumer Price Index “basket” is housing, which will remain under pressure for an intermediate period of time. Some of this is measured by the Price Pressure Index – the blue line in the above graph.