Some aren’t ‘into’ Twitter, or “X”, or whatever we’re calling it now. This morning, I posted a summary of our thoughts on Inflation. Both on how Inflation has developed since 2021, and my thoughts moving forward.
So, if you are one of the aforementioned folks who are not “into” Twitter, allow me to repost my thoughts here …
Just so it’s clearly spelled out, in ‘plain’ speech, my personal take. The #inflationary spike we saw (and correctly said … it was NOT #transitory (remember that?)) … has been tamed. #Inflation at that point was led by three factors working in tandum …
1 ) Monetary Policy in 2020 that went IMMEDIATELY to 0%, and stayed there for far too long. But this did not immediately cause the problem …
2 ) Simultaneously, extraordinary Fiscal Policy in 2020. And that word “Simultaneously” is key. It’s both of those factors working in … tandum. But it was NOT simply those two factors working in tandum. #Inflation is, what it always is. TOO MUCH capital in the “hot” (to borrow the old phraseology) economy, in the hands of the consumers … chasing TOO FEW GOODS. That, is Inflation. And thus, the
3 ) Third piece was the incredible supply chain disruptions we saw in 2020. THOSE THREE variables, working at the same time, caused the #Inflation spike we have all suffered through for the past 2 1/2 years. Our stance was pretty firm this was going to be the case moving forward in 2021.
But what about now? As specified in the #Podcast ““The ‘Stock Market’ is ‘High’”, The Bull Case, The Bear Case, Inflation and Valuations …” ( https://gtctraders.com/the-stock-market-is-high-the-bull-case-the-bear-case-inflation-and-valuations-podcast/… ) we are in a ‘gully’ at the moment with #Inflation
We’ll need at least 3 to 5 prints w/ associated data (PPI to CPI spread being one of many) moving forward to make sure that the #Fed does not repeat the mistake of 1976. Quelling inflation, only for #Inflation to become structural and worse than before .. (1970’s Inflation below)
Thus, my term, we are in a ‘gully’ or ‘holler’ (I prefer the later for biased reasons) of #Inflationary data.
Thus, when WE SAY … moving forward “It’s Data dependent”. THE ABOVE is what we mean. It’s not a ‘slag off’ term, avoiding having a stance. It’s point in fact where we stand at the moment.
And as an aside, anything else? Is just trying to impress ones with terminology and models that should sort of be proprietary anyway. Look at that “Calculus” post by that guy last week everyone made fun of (rightly). Why did that post even exist? It came about because of an ethos of trying to impress others with knowledge.
One-upmanship. That ethos, leads the layman, to try to do the same. I have made it SOP to avoid ones trying to appear to be the smartest guy in the room. [Richard] Feynmans approach is the correct, and MORAL one
I will leave you with that for now …
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