So the rise in energy prices is not “our fault”, so to speak, but nor is it temporary. Higher Chinese demand is not going to go away. So we have to adjust to higher energy prices. People have also pointed out the prominent increases in rents in the CPI as a special factor, and it is certainly true that rents are rising quickly.
When we look at TIPS yields, we see that real interest rates have fallen sharply over the past six years. In the first half of 2007, five-year TIPS had a real yield of about 2.5 percent and 10-year TIPS also had a real yield of about 2.5 percent.