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The spectre of stagflation
In the bond market, while nominal bond prices rose, prices of inflation-indexed bonds rose even more. It means that the bond market’s expectation of future inflation in America went up. Action in the gold, bond and stock markets in recent weeks suggests that markets are beginning to take the risk of stagflation seriously.
Spectre of inflation looms large
The low inflation rate in recent years was to a large extent subsidised by China, which exported ever-cheaper appliances and other products to the West, thanks to its own low wage and cost manufacturing base. But that is ending as Chinese workers start to demand a part in the prosperity they have created, and pressure for higher wages increases.
It seems our prosperity is up for grabs.
Mr Ash warns: "Wall Street and the City are suddenly piling into the commodity markets. Expect a side-order of '70s-style inflation to hit your dinner table as a result."
The casino is always open.
Sin City
Ladders and snakes
Ladders give, snakes take
Rich man, poor man, beggar man, thief
Ain't got a hope in hell, that's my belief
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
16 hours ago
2 comments:
It means that the bond market’s expectation of future inflation in America went up.
Mark my wife had to take one of my dogs to the vet today, looks like she got into some rat poison which is in heavy use out in the Mid-West this time of year. Don't know if she'll make it yet.
My wife passed a gas station on the way and when she went by it on the way home the price had been raised 15 cents a gallon. Oil effects all products one way or another, it gonna get ugly on highly indebted Americans. Shouldn't be long before we hear the howls for higher wages. OWOOOOOOOO
Kevin
Sorry to hear about your dog. Crossing fingers for you.
Shouldn't be long before we hear the howls for higher wages.
Perhaps it will be offset by the howls of unemployment. Either way, I think the prosperity printing machine is bound to stagnate (not that the printing portion of it will, just that the output will be much less effective).
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