Not exact matches
In the grander scheme
of things, and as a red flag, this is another
asset class that has enormously benefited from
asset price inflation, stirred up by the Fed's well - targeted monetary policies since the Financial Crisis.
Not
inflation, but this is interesting, because
of how your expression, gels, with those whose thoguhts are concerned for
inflation, when the world is still roughly at ZIRP, and essentially, is in a state
of suspended depression, where
assets blow - up, due to savings glut, and a great excess
of money printing globally (on the back
of false rises in
asset pricing).
If it focuses on maintaining the growth necessary to meet its
inflation target, there is the risk
of further increases in leverage and
asset prices setting the stage for trouble down the road.
Asset prices are in fact much more sensitive to monetary policy than either the economy or
inflation are, with the incumbent risk
of fueling market bubbles.
The debate prior to this crisis can be (perhaps simplistically) characterised as between those who argued that an
inflation - targeting central bank should care about
asset prices to the extent that they affected the forecasts
of output and
inflation over the policy horizon, and those who argued that additional attention needed to be paid to
asset prices and the possibility
of credit imbalances.
One
of the more common responses to the fact that
inflation is low is the idea that the
inflation is all in
asset prices.
Korean leaders to meet at North - South border on Friday: BBC Chinese geologists say N. Korea's main nuclear test site has likely collapsed: WaPo China air force intimidates Taiwan with military flights around island: Reuters Conservative Supreme Court justices appear to back Trump's travel ban: The Hill French president expects Trump will withdraw from Iranian nuclear deal: BBC Rising interest rates keep Wall Street on edge: CBS Investors will focus on various
inflation numbers in days ahead: Bloomberg A closer look at the 10 - year Treasury yield's rise to 3 %: Calafia Beach Pundit T. Rowe
Price's
assets under mgt top $ 1 trillion — a sign
of active mgt growth: P&I World trade volume slumped 0.4 % in Feb, first monthly loss since Oct: CPB
Perception
of the debt - overhead problem is concealed by the characteristic feature
of today's finance capitalism: an
asset -
price inflation of property markets, that is, rising land and stock market
prices.
This
asset -
price inflation goes hand in hand with debt deflation
of the «real» goods - and - service producing economy.
An alternative definition
of a Bubble Economy therefore focuses on
asset -
price inflation — rising stock market, bond market and real estate
prices in the face
of an economy - wide debt deflation.
It means that instead
of spending income on buying goods and services in the «real» production - and - consumption economy, they are paying the bill for past
asset price inflation.
When one compares bitcoin's five - year
price momentum (adjusted for
inflation) against that
of previous
asset bubbles, bitcoin dwarfs the runners - up — the Mississippi bubble
of 1720 and the Amsterdam Tulip Mania
of 1637.
For
inflation targeting countries, it would certainly be a retrograde step in my view to be perceived as walking away from a framework which has for a decade delivered good results, in favour
of some explicit pursuit
of asset prices per se.
Bernanke, the widely criticized chairman
of the Federal Reserve, shot back Sunday evening at the
inflation hawks who claim quantitative easing — the Fed's plan to buy $ 600 billion
of Treasury debt over eight months, in hopes
of boosting
asset prices and nudging a sluggish economy forward — will send
inflation soaring and destroy the dollar.
Mr. Rajan added that the public may choose to look through current «unnatural»
asset price inflation induced by unconventional monetary policies and instead exercise prudence in risk management on concerns
of future volatility.
In other words it manufactures
inflation of assets priced in dollars.
-- FOMC minutes show uncertainty and concern about markets are affecting officials» decision - making — Officials were cautious when evaluating market conditions and the «damaging effects on the economy» — Worry about «potential buildup
of financial imbalances» and a sharp reversal in
asset prices» — Members seem oblivious to impact
of inflation on households and savings — Physical gold and silver remain the only
assets for real diversification and safety
May 3 - Rising costs start to squeeze American businesse CNN Money May 3 - Home
Prices Jump Again And «$ 3 Gas Is Coming» Dollar Collapse May 3 - Gold
price claws its way higher on Fed meeting and geopolitics Gold - Eagle May 2 - Q&A on SS Central America Gold Coins CoinWeek May 2 - Goldman says case for owning commodities has «rarely been stronger» than it is now CNBC May 2 - Gold, Silver See Corrective Bounces Ahead
Of FOMC Statement Kitco May 1 - Gold Eagle Sales Still Faltering While Mining Output Collapses — Perfect Storm Daily Coin May 1 - Relentless USD Rally Is Precious Metal Kryptonite GoldSeek Apr 30 - Venezuelan Inflation: The Demise of Fiat Currency in Real Time GoldSilver Apr 30 - Silver Market Update Clive P. Maund Apr 27 - Finest 1913 Liberty Head 5 - cent coin will headline ANA auction Coin World Apr 27 - PCGS security features help police nab suspects in robbery case Coin Update Apr 27 - The Most Famous Coin of Antiquity — the Athenian Owl Coin Week Apr 27 - Gold gains but remains vulnerable after Korean leaders meet Reuters Apr 26 - The Era of Very Low Inflation and Interest Rates May Be Near an End NY Times Apr 26 - What Is Gold: Asset, Commodity, Currency Or Collectibl
Of FOMC Statement Kitco May 1 - Gold Eagle Sales Still Faltering While Mining Output Collapses — Perfect Storm Daily Coin May 1 - Relentless USD Rally Is Precious Metal Kryptonite GoldSeek Apr 30 - Venezuelan
Inflation: The Demise
of Fiat Currency in Real Time GoldSilver Apr 30 - Silver Market Update Clive P. Maund Apr 27 - Finest 1913 Liberty Head 5 - cent coin will headline ANA auction Coin World Apr 27 - PCGS security features help police nab suspects in robbery case Coin Update Apr 27 - The Most Famous Coin of Antiquity — the Athenian Owl Coin Week Apr 27 - Gold gains but remains vulnerable after Korean leaders meet Reuters Apr 26 - The Era of Very Low Inflation and Interest Rates May Be Near an End NY Times Apr 26 - What Is Gold: Asset, Commodity, Currency Or Collectibl
of Fiat Currency in Real Time GoldSilver Apr 30 - Silver Market Update Clive P. Maund Apr 27 - Finest 1913 Liberty Head 5 - cent coin will headline ANA auction Coin World Apr 27 - PCGS security features help police nab suspects in robbery case Coin Update Apr 27 - The Most Famous Coin
of Antiquity — the Athenian Owl Coin Week Apr 27 - Gold gains but remains vulnerable after Korean leaders meet Reuters Apr 26 - The Era of Very Low Inflation and Interest Rates May Be Near an End NY Times Apr 26 - What Is Gold: Asset, Commodity, Currency Or Collectibl
of Antiquity — the Athenian Owl Coin Week Apr 27 - Gold gains but remains vulnerable after Korean leaders meet Reuters Apr 26 - The Era
of Very Low Inflation and Interest Rates May Be Near an End NY Times Apr 26 - What Is Gold: Asset, Commodity, Currency Or Collectibl
of Very Low
Inflation and Interest Rates May Be Near an End NY Times Apr 26 - What Is Gold:
Asset, Commodity, Currency Or Collectible?
It has become easier to ride the wave
of asset -
price inflation — the stock market and real estate bubble — than to create new material means
of production.
This was largely a function
of the coincidence
of high real interest rates and high
asset price inflation over much
of the period — more so, perhaps, than the exercise
of exceptional investment skills as such.
Having rapidly pulled ahead over the past three decades, China must remain free
of rentier ideology that imagines wealth to be created by debt - leveraged
inflation of real - estate and financial
asset prices.
The critics charged that those policies would eventually produce destructive bubbles in the
prices of stocks and other
assets and, eventually, undesirably high
inflation.
Mark Whitmore: Well, batting clean - up here is a little tough, because as Bill mentioned, I think that people have really nicely covered a lot
of the main, sort
of theoretical tenants
of Austrian Economics, I guess I would add that specifically the role
of central banking is something that I think is really distinct from an Austrian perspective vs Keynesianism, specifically the
asset price inflation that you've seen has largely been ignored specifically in the last two bubbles, and now we're into a third bubble I would argue as well.
So why should investors finance tangible capital investment when they can ride the wave
of asset -
price inflation?
Or, does the Fed's easy - money policy deregulation
of oversight open the way for
asset -
price inflation that puts home ownership even further out
of reach — except at the
price of running up a lifetime
of debt to the banks that write the loans on their keyboard at steep markups over their cost
of funding from the compliant Fed?
Two decades
of asset price inflation enabled speculators, homeowners and commercial investors to borrow the interest falling due and still make a capital gain.
That now leaves room for the market / economy to determine the proper rate
of interest; and, he notes, given the patchy economic recovery, the fragile level
of confidence and the low levels
of inflation, Citi questions whether
asset prices belong where they are today.
The Bank will focus on the
inflation and output consequences
of any economic disturbance, including
asset -
price shocks, and will continue to respond in a manner consistent with meeting its long - run
inflation objective.
As for the article, personally Ozil has yet to deliver on his
price tag, whether that
price tag was a fair assessment
of Ozil's abilities, I am not sure, in this day and age due to the
inflation in the market more and more
of transfer fees are going to compensating a club for parting with a valuable
asset but that is a train
of thought for another day.
The interest rate level has a significant impact on the functioning
of the economy as a whole, influencing exchange rates,
inflation, market rates,
asset prices and the expectations and confidence
of the market.
For example, if US CPI
inflation data come in a tenth
of a percentage higher than what was being
priced into the market before the news release, we can back out how sensitive the market is to that information by watching how
asset prices react immediately following.
The Fed is trying to rescue the economy from
asset deflation, much like 1990 - 1992, but will run into the buzzsaw
of price inflation, and tighten a la 1994.
3) How do you adjust the
price or value
of an item to compensate
inflation; eg: Say I have a house I paid 1 million dollars 3 years ago (ignore depreciation and other factors that can affect the
asset's value), if
inflation was: Y1 = 10 %, Y2 = 11 % and Y3 = 12 %, what would the value
of the house be?
The question that I have at this point in the cycle is how low the Fed will get before they get scared about
inflation, and flatten out policy to see which effect is larger — deflation from overvalued housing
assets purchased with debt, or
inflation of goods and services
prices.
We are in a period
of asset deflation and consumer
price inflation, so this is a difficult period to negotiate through.
Rapid money supply growth with no consumer
price inflation can only really occur within the confines
of an
asset price bubble, or else, where does the money go?
Continuing
asset deflation, and declining but still positive economic growth (as the government measures it) leads the Fed to continue to loosen, or stand pat in the face
of rising consumer
price inflation.
Interest rates,
inflation,
asset prices exist in a web
of factors where changes in one have a multitude
of possible effects on the others.
Asset inflation has taken the place
of goods and services
price inflation.
The change is from
price stability, to returning
inflation to levels consistent with its mandate, which means they will try to inflate, and let it into the goods and services markets, rather than merely using it to prop up the
prices of assets backed by debt.
Because
of their flawed model for understanding monetary policy, they ignored
asset inflation, and patted themselves on the back for the lack
of goods
price inflation.
This section includes guides to economic analysis and forecasts and related financial and economic data; cost
of living, consumer
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inflation data; bond yields and interest rates; cost
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assets and intellectual property such as patents and trademarks.
Specifically, the All
Asset strategies» recent strong performance (see Figure 1) may be attributable in large part to four fundamental drivers
of global capital market returns: the breakeven
inflation rate (BEI), EM currency valuations, EM - to - U.S. cyclically adjusted
price / earnings (CAPE) ratios and the global value premium.
Based on current positioning, we expect the All
Asset strategies to benefit from the following return tailwinds: a stable to rising breakeven
inflation rate, appreciating EM currencies, convergence
of EM - to - U.S. cyclically adjusted
price / earnings (CAPE) ratios toward longer - term averages, and appreciation
of global value stocks from today's elevated discounts toward longer - term norms.
Stocks and riskier
assets are not merely climbing the proverbial Wall
of Worry; rather, at this moment in time, the ultra-accommodating monetary policy
of global central banks is an unchallenged source for
asset price inflation.
Unexpected
inflation is the part
of inflation that's not already «
priced into»
assets as part
of normal market dynamics.
Gold is often viewed as a safe haven
asset as it has preserved its value in real terms through hundreds
of years
of history, but this leads to its market
price often becoming overly speculative at times when people are worried about
inflation which can cause its spot
price to fluctuate wildly.
When
inflation rises, the
prices of commodities and hard
assets rises too.
Our emphasis has been on the risk posed to
asset prices by relatively demanding valuations in many
asset classes and the risks posed by rising
inflation pressure and the implications
of this for medium - term central bank accommodation.
The overpromotion
of home ownership, and the constant provision
of liquidity to the markets led borrowers to become reckless amid
asset price inflation.