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.
Not exact matches
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 -
price inflation gives way to crashing
prices and negative equity
for real estate and
for much financial debt leveraging as well.
I HOPE
for more
inflation b / c
asset prices will therefore inflate.
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
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
for a decade delivered good results, in favour of some explicit pursuit of
asset prices per se.
So, my bottom line is that monetary policy should react to rising
prices for houses or other
assets only insofar as they affect the central bank's goal variables — output, employment, and
inflation.»
-- 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 Collectible?
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?
Commercial banks in the West have created most credit
for speculation and
asset -
price inflation over the last thirty years, not to fund capital formation and industry.
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.
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.
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.
I have been arguing
for asset deflation and
price inflation for some time now, and that is not a mix that I would enjoy trying to manage, if I were on the FOMC.
The easy trade - off between growth and
inflation that so flattered
asset prices for a quarter century is over.
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.
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price index, and
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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 fact we've seen no surge in QE - related (consumer
price)
inflation (despite some dire warnings at the time, I anticipated this back in 2012), has also been reassuring — though there's precious little justification
for this, as we continue to experience
asset inflation instead.
A painful lesson people have been forced to learn over & over throughout history — they inevitably end up paying more & more
for their lunch (
price inflation), or else the lunch bill only finally comes due once markets (& the economy) collapse due to speculative excess (
asset inflation).
This should inevitably benefit oil and gas demand &
prices — whether it reflects a liquidity phenomenon, a dollar depreciation, accelerating
inflation, and / or simply a scramble
for real
assets.
Given that the excess credit is heading
for the financial markets, and not to the goods markets, we are getting
asset price inflation, but not goods
price inflation.
For the same $ 1,000, 3 % yield bond, if the raising of interest rates — either via a central bank decision, from
inflation, a greater supply of the same security or associated / competing securities entering the market, or from a flight to other
assets — brought the interest rate up to 4 %, the new
price of the bond would be $ 750 ($ 30 /.04).
Typically hard
assets are an excellent hedge against
inflation, meaning their value rises as the general
price levels for goods and services increases (known as Consumer Price Index or
price levels
for goods and services increases (known as Consumer
Price Index or
Price Index or CPI).
While the Fed's
asset inflation policy may not be working
for most retailers, it is clearly benefiting home
prices and Home Depot — they are in the right place at the right time.
Inflation for Goods
Prices, Attempted
Inflation for Housing - Related
Assets, but Sorry, No
Inflation for Wages
There are two types of
price inflation, one
for assets, and the other
for goods (and services, but both are current consumption, so I lump them together).
For the moment, the economy is being supported by
asset price inflation.
But what seems clear is this: The fiscal sugar rush that's ginning up growth in the short run could be setting the stage
for a letdown later, especially if the Federal Reserve feels compelled to take away the punch bowl before
inflation and
asset prices like stocks get too out of hand.