Money Monopoly

Rich Karlgaard at Forbes has been writing about the Cheap Revolution for some time. Andy Kessler picks up the theme in his new book and today's WSJ op-ed page. We now know that not only are manufactured goods getting cheaper fast but so are outsourced services.

Quality improvements are also accelerating and the "price level" and/or "output gap" calculations and analyses --and resulting monetary policies are more problematic as a result.

So, what do we know? Greenspan and Company misread conventional data and saw a deflation that was not there last year. Kessler and others now fear that they are as likely to misread conventional indicators now and in the near future.

If we are stuck with the public money monopoly, which indicators should they favor? Asset prices? Asset prices not skewed by the cheap revolution? Gold? Back to the future?