E Tuesday Talk: Slip Sliding Sideways

"(According to data from Bank of America (BAC): “It’s hard even to imagine a wage-spiral tail risk. It would take steady wage gains of 10-12% to push inflation to the levels of the 1970s & 80s, and the US economy is structured very differently today. Non-elite unions are politically toothless. Technology penetrates every industry. The offshoring of more services is coming.” I agree with this take in regards to stickier secular inflation though I believe cyclical inflation will be more persistent than many are expecting. "

Barrow includes the following chart:

Whether to help us deepen the haze or get through it greener than when we entered it Barrow concludes with the following note:

"There’s a number of great tapes and values in the (Cannabis) space. Canadian listed US MSO GreenThumb Industries (GTBIF) is one of them."

More to the point of today's column headline TalkMarkets contributor Douglas Gammons in an Editor's Choice piece entitled Signs Of A Fake-Out Rally? is happy to be a participant in the market's run-up since its' 2020 lows, but is concerned about the trends for the year. Worth the read. Here are a few of his takes:

"Last week, I said that a new short-term uptrend had started on Friday, May 7, but that was a bad call. However, a week later on Friday, May 14, a new short-term uptrend has started - although it is not yet confirmed by some of the important indicators. In other words, watch for signs that this is another fake-out rally (see chart below)."

"I was happy with the way I executed my trading plan during this past week...I just held onto positions unless they stopped me out, and fortunately only a couple triggered sells."

"I am hoping to continue to participate in the uptrend for as long as it lasts, and I am also hoping to be out when it falters. Additionally, I am not considering any purchase to be "long-term" with the market so extended, no matter how good the story or earnings in the stock."

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William K. 2 months ago Member's comment

I see things differently. All it takes to start and grow inflation is dumping in money. Wages do not need to rise for inflation to take off. Does anybody actually believe that dumping FIVE TRILLION DOLLARS into the economy will not launch a cycle of inflation that will cause a whole lot of damage ao a whole lot of people? And it will be serious damage that will threaten the stability of society. Things will change, and not one atom of that change will be for the better. When a whole lot of people suddenly become both homeless and hungry they may not listen so politely as they do while they are at home and fed.

David Marshall 2 months ago Contributor's comment

For a good take on Biden’s ambitions for the infrastructure program(s) check out NPR’s Special Edition of it’s UpFirst podcast with Presidential historian Doris Kearns which was put up over the weekend.

William K. 2 months ago Member's comment

My point was that the records show that in the past, every time money was dumped into the economy, inflation resulted. So why should this time be any different?? There does not seem to be any change in the mechanism of inflation, and so it seems that the results of the action will be the same, although the time delay might be different.

My other concern is about the effect of all that debt on the future. The bad thing about debts is that they must eventually be paid off. ( I keep saying this, I believe it is true.)