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They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.

With the sugar market hysteria, the people are obviously worried and expect higher inflation. When this hysteria subsides, which we're probably observing, then I hope that people will also get less worried about the future of inflation.

When you are growing at a rapid rate, there is bound to be some inflation. I think a 5% rate of inflation is something that we should take in our stride.

Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they're likely to increase prices, since they've learned that if they don't, and inflation hits, their businesses will be wrecked.

Of course, looking tough on inflation is part of any central banker's job description: if investors believe that inflation is going to get out of control, you end up with higher interest rates and capital flight, and a vicious circle quickly ensues.

One day we will have more inflation, and our bonds will bleed like a pig. The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.

It's one of the fundamental principles of the stock market: When interest rates go up, stocks go down. And along with financial companies and cyclicals, technology companies - with their sky-high price-to-earnings multiples - should be among the biggest losers in an environment of rising rates.

We've got to make greedy banks pass on interest rate cuts in full, and we've got to see rents coming down.

The big question is: When will the term structure of interest rates change? That's the question to be worried about.