The inflation/deflation debate is hot… It crackles and pops like a pine fire. But it gives off little helpful light. Abe Lincoln may have read by the light of an open fire. But when we tried it, we singed our eyebrows. It made us suspicious of Old Abe; maybe he wasn’t quite as truthful as he pretended to be. Later, we realized he was a mountebank. But that’s another story…

Today, we light a candle and try to interpret the shadows on the wall…

Yesterday, the Dow fell 81 points. Gold dropped $5 to $1009.

Will the feds succeed in causing inflation? Or will they fail? Will the dollar continue to go down? Or will it prove to be a safe haven currency in a time of deflationary trouble?

According to the papers, the feds have already done it. “Fed says recovery underway,” says a headline from yesterday’s press.

Another headline tells us that

Pity the poor rich! Pity the poor! Pity us all!

Here at the Daily Reckoning, we always take the part of the humble… the despised… the oppressed… and the misbegotten.

Today, that means the rich…

Yes, dear reader, the rich are getting beaten up. Maligned. Mistreated.

Their governments all have in it for them… taxes on ‘the rich’ are rising. In the US, the Democrats are talking about financing the entire nation’s health care system on the backs of the super-rich.

And their salaries are being targeted by prosecutors and politicians. No more million-dollar paydays… not with the feds looking over their shoulders. Oh… and their investment earnings are down too. The dividend yield on the stock market is scarcely 3% — try living on that, you rentiers! As for the 10-year T-note, the yield is only 3.5%.

And capital gains? Fugetaboutit. Stocks have been rallying (bouncing) since March 9 th. The