Grandma Is In Trouble.
Via Kevin Muir of “The Macro Tourist” fame
Today’s post is an important one. I might have put Grandma in the trunk, but the coming struggle between generations is no laughing matter. It very well might end up being the defining theme for financial markets in coming decades.
I came to this conclusion after sitting down to write about Central Banks’ inability to create inflation (so far). But first, to understand where we are headed, we need to know where we have been.
Think b
Thanks.
You know, this is one of the most understandable essays I’ve read about why we have not experienced inflation.
Ditto. Great post
Superb analysis!
I agree completely with everything here, with 1 exception. velocity coming back
However, I don’t know how the bad demographics of western societies (compared to the 70’s and 80’s with growing populations that spend, spend , spend…) will affect the scenario
It could be , demographics is everything , and why we still won’t get inflation, in a world awash with capacity (too much oil, cars, goods/junk of all kinds). I see no real uptick in velocity , and under employment (and hence wages) is enormous, with completely incompetent education sector training people for the jobs of tomorrow.
Only place we see inflation is the incompetent government sector/services, like Electricity (in Canada), health Care (what a mess), taxes, license fees and fees of all kinds… is that enough to cause a wage/price spiral. I have trouble believing it!
Your analysis is 1 of the best I have ever seen from you, but see above why I still have trouble seeing it (and I do hate “conventional, rote thinking” ) =P
Take care
JM