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Albert Edwards To America On Thanksgiving: Japanification Is Right Around The Corner
Jerome Powell went out of his way during the October press conference to offset any perceived hawkishness associated with his upbeat comments on the trade war.
He did that by emphasizing that inflation would have to surge before the Fed would consider hiking rates.
“We really don’t see that risk” of a sharp upturn in inflation. “We’re not thinking about raising rates right now", he said, in response to a question from a reporter.
Read more: Jerome Powell Signals Fed On Hold Until So
One ingredient underlying Japanification is that achievable affluence relative to survival is very high. This induces a concept of disposable consumption, as in consumption that can be permanently foregone. Is that in the models. It is a secular economic force acting in tandem with other ones, like birthrate. The USA, with anemic growth relative to tax cuts, and very lame infrastructure enhancement resembles a trucking company where the vehicles haven’t been maintained, so an illusion of health can be transmitted. Secular deflation is now much more powerful than QE or any other similar crap. Just think what a FED buying any T-bills at all really means. Look at it substantially, not technically. And how much substance underlies dollar debits and credits on computer screens outside the USA. Implode confidence there and what remains?
Wild E Coyote day happens that’s what. Dow down 5k in one day is what happens
Inflation is everywhere!! It’s in housing, building materials, food, labor, electricity, fuel oil, road tolls are just a few examples
Just went grocery shopping… $3 lettuce, $4 celery. Who do you want to believe? The local store or the government?
Japanification is likely inevitable.