With many commodity prices touching multi-year lows and with mounting fears for real estate valuations and car-lease residuals, numerous commentators seem convinced that ours is now a deflationary future. QE failed to raise CPI by anywhere near what the spin promised, they say, partly because it was ‘unsupported’ by fiscal policy. Therefore, if we don’t get Roosevelt, we’ll get Brüning, they conclude, and, meanwhile, we need the Fed to cut rates below zero, said one prominent pundit on April 5th. We replied:-
Tag Archives: CPI
Turning Japanese
A noted [monetary extremist] resident at GMU’s Mercatus Center fretted on March 20th that Japan’s efforts during 2001-06 to have the central bank finance deficits ‘didn’t work’ – i.e., they failed to ignite meaningful levels of wealth-sapping inflation.
The reason? As our sage tells us, was that there was ‘no commitment… to a permanent expansion of the monetary base’ as expounded in the ratiocinations of that dark genius of modern central bank theorising, Michael Woodford. We replied:-
What IS a ‘Market’?
In response to an FT article of January 23rd entitled, “The new kings of the bond market”, which suggested that banks had ceded their command over fixed income to exchange-traded funds and active portfolio traders, we responded with a riff on the sorry consequences of recent financial developments: a bromide which turned out to be singularly well-timed in view of the extraordinary upheavals suffered just a few, short weeks later:-
Turnaround Tuesday
After the excitement of the past few sessions, it was not entirely unexpected that what we old market stagers used to call, ‘Turnaround Tuesday’, would deliver its traditional mix of reflection, position rebalancing, and general counter-trend moves of either the stop-profit or the ‘Why do I always buy the top?’, buyers’ regret kind. [First Published June 4th] Continue reading
Easy Money, Hard Times
Though the connexion is not always explicitly drawn, one obvious corollary of the perceived current shortfall in corporate investment spending is to be found in the lacklustre nature of the gains being recorded in something called ‘productivity’.
This latter deficiency is often said to have ‘puzzled’ the Good and Great who presume to be able to influence such matters for the better, but one can readily identify factors which implicate the policies of those same would-be helmsmen of the economy, themselves, in the discouragement they offer for capital formation and by the incentives they afford for less than ideal practices among businesses, consumers, and governments, alike.
For a downloadable PDF version of this article, please click: 17-10-27 Easy Money
The Eternal Triangle
Are equities ‘overpriced’ and if so, by how much? What about bonds or that largely forgotten asset-class, commodities? How do the three of them inter-relate and can we take advantage of such behaviour in order to build a better, more macro-resilient portfolio?
We take a detailed look, here, in the presentation found by clicking on the link:
Fretting on the Fed: Monitor No.5
Falling returns in the US. Tight money in China. An upswing in Japan. Deflation in India. Gold goes cold. Fretting the Fed on falling CPI and a flattening curve? No need to panic, just yet.
Please click for the latest Monitor.