09/26/2005

Kat-Rita Stagflation?

Hello:

The combined forces of Hurricanes Katrina and Rita caused devastation that may cost billions of dollars to repair, not to mention the loss of life and livelihood of many people. Congress has passed a bill to fund to rebuilding effort, and the President has said that he will not raise taxes to fund same.

This, and other factors, may lead to quasi-stagflation as the price of hard goods and energy increase. The Fed has not indicated definitively that they will pause in the raising of interest rates.

It appears that in the wake of Katrina and Rita, there will be increased donor scrutiny regarding the percentage of donations that go toward the mission of the organization. Does your organization have it's written policies up to date, including the written investment policy statement?

Terri G. Millson, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager