OhNoNotimAgain wrote:GoSeigen wrote:OhNoNotimAgain wrote:GoSeigen wrote:I think inflation is transitory.
GS
Wot, like QE was?
Strange comment. Care to elaborate?
GS
P.S. To be clear when I wrote inflation above I meant this present occurrence of inflation, I was not making a more general statement about all inflation everywhere. Perhaps that's the source of the weird reply.
There seems to be a view that inflation has been triggered by war and the recovery from the Covid pandemic.
In my view inflation was always going to happen because of the massive devalauation created by QE that started in 2008 in the wake of the financial crisis. Recent events have just supercharged it.
Furthermore, an ageing and soon to be shrinking working global population is going to fuel wage inflation. This will reverse the deflationary impact that the end of the cold war had by introducing the population of China and the whole of eastern Europe into the global workforce. Who needs a fridge repairman when it is cheaper to buy a new one from China delivered by Amazon?
Central Banks deluded themselves into thinking it was their brilliance that elimanated inflation. It wasn't, it was technology (suddenly, thanks to ebay, old stuff could be sold easily, adding to supply) and geopolitics.
The response is simple. Replace long duration assets with those of short duration. Forget price to hope ratios and go back to traditional stock valuations.
Agreed.
Interesting how many fail to link debasement of the currency to inflation in prices.
'But it's the war'.
And if it wasn't the war it would be something else. Covid. Brexit. Trump. Johnson. Wine in the garden of No 10. Whatever the current bogeyman is.
It's been a long time coming. The Russia thing is just giving it a rather large shove.
Would you elaborate on your final sentence?