The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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its a great bet... I am in on this
...
I can remember hearing that irrational exuberance remark being repeated every time there was a stock market high.
Regarding money supply and inflation ..I think the velocity of circulation has a hand in it too.
Finally though , in the UK today a panorama report has said that the average household will spend £1,700 more in 2022 than in 2021 on tax hikes , fuel and electricity , council taxes , food and services ..you can see it happening already.
I think the inflation cycle has already began ..
More predictions by experts.
Dec. 4, 1996, Federal Reserve Chairman Alan Greenspan wondered whether stock prices were exhibiting “irrational exuberance,” the S&P 500 was priced at 745. It closed the following year at 875 and never finished any subsequent year below 950.
The bond market’s critics haven’t been right since Ronald Reagan held office; effectively, Treasury yields have done nothing but decline. Along the way, pessimists have periodically questioned the bond market’s sanity, including Alan Greenspan (an amazing run, for one of the much vaunted smartest persons in the room and yett not being able to predict much at all, despite being able to supposedly influence the world of money??), ... in April 2017 repeated his “irrational exuberance” charge, this time about bonds. Wrong again.
Milton Friedman’s statement--“Inflation is always and everywhere a monetary phenomenon that … can be produced only by a more rapid increase in the quantity of money than in output”--was once regarded as a truism, economists now wonder why money creation in developed countries has outstripped output without sparking inflation.
Nevertheless, although the traditional measures of money supply have lost much of their predictive powers, ...Friedman’s precept remains valid as a general principle. Eventually, more money must lead to higher prices. The relevant question is not if money creation will increase prices, but when. Timing is missing to vague in so many predictions?
In the 10 years from November 2001 through October 2011, the M2 money supply increased by 78%. Over the next decade, M2 grew by 120%.
In exchange for receiving 1.5 more percentage points of annual yield than they would obtain from cash, along with the possibility of strong performance should another recession arrive, Treasury investors court the ever-increasing risk that the skeptics will finally be right, leading to double-digit capital losses. That doesn’t seem like a sound bet to me.
Better instead to hold short notes and/or cash and/or gold !
the gnome, pondering from afar
Fair comment Steve, I stand corrected, slightly lightly less waffle and a bit more time to reconsider options.
He said more than expected, so less whaffle, which is why gold reacted the way he did
Key points in my earlier post
Obviously no fear of a straight answer then?
Kicking the can down the road and hoping things may turn out alright?
Doesn't exactly inspire any confidence in their monetary policy!
I wonder if our Boris Johnson has been giving them lessons on how to waffle?
Looks again Jerome Powell’s faster asset tapering remark is bunter just like inflation is transitory/temporary. Infact they might slow it down or halt. Gold can have a massive rally
Federal Reserve Chairman Jerome Powell said on Tuesday that the United States central bank will consider acting more quickly to dial back its ultra-low interest rate policies to counter higher inflation, which Powell acknowledged will likely persist well into next year.
The Fed is currently reducing its monthly bond purchases, which are intended to lower longer-term borrowing costs, at a pace that would end those purchases in June. But Powell made clear that Fed officials will discuss paring those purchases more quickly when it next meets in mid-December.
“The risk of higher inflation has increased,” Mr. Powell, who was tapped for a second four-year term by President Biden last week, said to the Senate Banking Committee. He appeared alongside Treasury Secretary Janet Yellen for the first of two days of testimony on Capitol Hill.
The Fed is heading into a difficult environment because the virus threatens to pull the central bank in different directions by putting its goals of low and stable inflation and a tight labor market into greater conflict.
Inflation has surged this year—to 5% in October from a year earlier, according to the Fed’s preferred gauge—amid strong demand for goods and services that have faced supply-chain bottlenecks associated with reopening the economy from the pandemic.
The latest variant of the coronavirus, like the Delta variant that led to a slowdown in growth during the third quarter, raises the risks of more continuous economic disruptions that fuel higher inflation.
The Australian economy contracted just 1.9 per cent in the third quarter despite both NSW and Victoria being forced into lockdown for most of the period. Economists had PREDICTED a contraction of 2.7 per cent. tHERE WOULD BE QUITE A FEW ON THE STREETS IN VICTORIA AND NSW WHO WOULD DISAGREE....
Australian shares plunged to their lowest level in nearly two months on Wednesday, beginning the final month of the year on the back foot, as a hawkish Fed and renewed fears over the omicron variant spooked investors..
“With potential changes in policy on the horizon, market participants should expect additional market volatility in this uncharted territory.”
UNCHARTERED TERRITORY!!! THIS MEANS WE HAVE TO RELY ON THE PREDICTIONS OF EXPERTS!? AND YU KNOW HOW RELIABLE THEY ARE!
Not sure how I will be able to sleep at night, but then there is always gold, but ti is not performing...unchartered waters, will cut back to investing in real assets...the GOLD medal ...
the gnome ...