The Most Important Paper Of The Next Decade
Via Kevin Muir of “The Macro Tourist” fame
Whenever I tell people the next big crisis will come from inflation, not deflation, the looks of disgust are worse than when someone says Justin Bieber’s music is not that bad. And when I try to tell them that the true bubble is in fixed income, not stocks, they look at me as if I just slipped the Biebs into the next-up slot on the Spotify playlist.
“Where will the growth come from?” they often ask or, “demographics will keep infla
So if European PMI is going into the toilet, why would rates go up? The ECB will do the opposite. And the whole demographics causing inflation sounds like a gold bug that is missing the allure of the metal lately.
one question.
who wants to lend money to any gov/foreign or domestic? i wont but i am shorting it–i like that (maybe).
no demand–interest rates go up and all gov’s go bankrupt–not to mention we the people will be rape with tax burden before they finish us off completely.
my dark cloud follow me.
2 questions actually (10/30 trillion dollar question).
at what point do markets step in and the CB’s et all fail? hope to hear your thoughts.
sb
Valuable insights in the full article. Thanks for the link and abstract. One quote I liked: “Piketty is the past, not the future.”
I have always been a believer in the K-Wave – 50-60 year cycle
“Between the 1980s and the 2000s, the largest ever positive labour supply shock occurred.”
This is a remarkably ignorant interpretation – and a cognizant qualifier if there ever was one. There was no labor supply shock or shortage. There were labor rates (coupled with vastly improved global product transportation) from developing countries that were far cheaper than developed country labor rate. A phenomenon that continues to today as well as the mistaken conclusion that their is a shortage of labor in the US and other developed countries. There is no shortage of labor – especially technical, but there is a shortage of global buyers willing to pay higher labor rates necessary for workers to survive in developed countries – but not in undeveloped countries. There is quite the opposite – there is an excess of trained workers in developed countries, but not product margins to employ them.
All the other cherry picked inflation enablers – are all dependent on an end to gov. thin air printed money and the absorption of what has already been printed. The developed nation central banks of the world are in a quandary – stop QE and have the economy collapse completely and yes – to eventually have gross inflation, or to continue kicking the QE can down the road to be dealt with by the next poor suckers. The longer this process continues – the less probable a non-catastrophic economic outcome.