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All exponential trends eventually fail, but this one sure has legs.
In the battle between pumping up the money supply and automating/outsourcing the workers...
Who am I kidding? It isn't a battle. It's a "winning" combination! Sigh.
Source Data:
St. Louis Fed: Custom Chart
5 comments:
Debasement is not just the storage room below ground.
Ben has promised everyone forty billion reasons each month, forever, to hold some kind of physical hedge. But I am not as smart as a central banker, so never mind ;)
Mr Slippery,
Ben has promised everyone forty billion reasons each month, forever, to hold some kind of physical hedge.
And yet we had an epic housing bubble crash. I'm of the belief one should probably be very picky about which physical hedges to buy. Those that have quintupled or more over the past decade don't seem at all safe to me. Those that haven't had waves of speculators chasing them (toilet paper, canned goods, and so on) still do seem safe.
Just ongoing opinions of course.
Speculators are going to pour money into anything that has a market and is liquid. Hot money flows are just a fact and can destroy markets and even countries (e.g., Thailand, South Korea). Part of the fun of trying to preserve a little wealth in our system.
Canned goods and TP, while great hedges, are only good up to your storage limits. Inflation protected vehicles got a big boost last week. We all knew a big inflation was coming and Ben gave us a hard shove down that road.
Mr Slippery,
We all knew a big inflation was coming and Ben gave us a hard shove down that road.
It will come but will it come in our lifetimes. That's a very important thing to know.
As the price of oil rises, I see the price of other things get crushed. That might not be all that inflationary overall.
To paraphrase the curse, may we live in interesting times!
Put another way, I am not all that bullish on China (nor am I bullish on China's seemingly insatiable need for iron ore).
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