Morgan Stanley: the threat of inflation more seriously than you might think

According to analysts of Morgan Stanley, the financial turmoil in developed economies may distract investors from the problem of inflation, which can not be underestimated. "According to our calculations, the stabilization of public debt relative to GDP in the U.S. at current levels requires the growth of average inflation rate to 4-6% in the next 10 years." Morgan Stanley, also warns that the risk of government default and inflation risk - are two sides of one coin. Inflationary risks inherent in the current fiscal situation in the U.S., much higher than those counted by the market. "We recommend investors to buy protection against inflation, and not from default, ie, TIPS instead of CDS".