E Tuesday Talk: Inflation And Impatience

Asset prices have been driven higher precisely because of the near $5 trillion in newly minted money that was thrown at Wall Street over the past two years. However, sometime next year, we will learn what happens to these bubbles when the monetary speedometer goes from $5 trillion to $0.

What all this means is that the rates of growth and inflation are about to slow. This isn't a reason to panic…yet, but it does require a change in your investment allocations...Disinflation and slowing growth could morph into deflation and recession next year. Such macroeconomic conditions should prove devastating for these record asset bubbles. 

(Investors need to) be able to determine when it is time to sprint for the emergency exit before the real chaos begins. That requires the ability to know when to raise cash, move into short-duration bonds, get the long the dollar, and allocate to a net-short position in equities."

Pokemon, Shield, Note, Play, Sign, Risk


Seems we should be on the lookout for more than just Pokemons.

In an exclusive for TalkMarkets contributor Vivian Lewis notes that Gold Up Four Days In A Row "...thanks to the risks of the US from slow growth, inflation, and higher yields."  I'm not sure how big of a gold bug Lewis is, but check her article for a look at the latest in Commodity, Pharma, Telecom, Tech and Finance equities around the world. Lewis keeps tabs on companies, large, trending and obscure (GLD).

Michael Snyder writing in Yikes! Corn Prices Are Up Roughly 50% In 2021 As Americans Brace For Years Of Horrific Food Inflation is (IMHO) one of those pundits who likes to get our minds racing. 

"Collectively, our leaders are literally committing economic malpractice, and if most Americans truly understood what was going on they would be out in the streets protesting against it. Already, a lot of people out there are becoming extremely alarmed that their food bills are so high. One of the things that is driving this is the price of corn (CORN). Most Americans don’t eat a lot of canned corn or corn on the cob, but corn has become a key ingredient in literally thousands of other products in our grocery stores."

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William K. 2 months ago Member's comment

Inflation is that thing that drives down the purchasing power of my money. Plain and simple, and does not take a Masters degree to understand that. Inflation is caused by the government (the Federal Reserve Bank) putting too much money into circulation, usually in the wrong hands.

And I understand that inflation benefits those seeking to get rich in the stock market, and that is evidently as far as those in the fed care to look. The fact is that there exists a lot more in the world than wall street, and that most people are not involved in the financial industry. Most people are far closer to the real world, Unfortunately the damage is the result of a long string of very deliberate actions by those individuals running the Federal Reserve bank. So when all the bubbles burst and the times get really rough we will know the names of those responsible. And perhaps things can be changed so that it will not happen again. Certainly this is a radical prediction, and I wish that it would be wrong. But I don't think so.