Operating at the Intersection of Technology and the Capital Markets
Tag: price inflation
Cash flow is king in a world smitten by nosebleed valuations and unsustainable spending The Fed's commentary around potentially increasing the Fed Funds Rate in 2023 vs. 2024 reminds me of the equity analyst who would base his valuation case on a P/E multiple applied to an earnings estimate that was five years in the … Continue reading Cash Flow Is King In A Bubble Economy
More bogus CPI numbers reported yesterday (HERE). The CPI itself is a poor price inflation measure given it excludes so many asset classes such as equities, art and crypto. Let's focus on one CPI line item - "food at home" which was up 0.7% over the past 12 months ended May. Sorry, that's a bogus … Continue reading Inflating The Debt Away. Higher Prices Are Here To Stay.
"Inflation" to lead headlines again when CPI data is reported. Real-world price appreciation is well ahead of the Fed's 2% target. If last month was any indication the term "inflation" will dominate market-related headlines when May CPI data is released on Thursday June 10th at 8:30am ET (See Google Trends chart below for search term … Continue reading Jerome Powell: Inflator-in-Chief
It is starting to feel like the 1970's with out of control fiscal spending, inflation and now gas lines. We only have gas lines in certain parts of the country today as local government officials exercised gas price controls during the Colonial Pipeline shutdown. We could very well see similar price control policies from the … Continue reading More Lines To Come With Price Controls
The Fed likely won't taper asset purchases this calendar year. It should, but it won't. **Purchase our Amazon Kindle book Stagflation Is Imminent: HERE We previously mentioned mid-term elections as one reason why the Fed won't take away the punch bowl. Second, the Labor Participation rate - a key economic indicator for the Fed - … Continue reading The Fed Will Not Taper In 2021. Inflation Is Not Transitory.
With the Money Supply (M1) up 358% since January 2020 (as of February 2021), there is simply zero percent probability that prices are not going higher. A 3-4x increase in M1 ought to inflate prices by a similar multiple. Most of the recent $1.9 Trillion (the actual cost will be higher), COVID spending program was … Continue reading The Ugliest Chart I Have Ever Seen
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The Fed would have us believe "There's nothing to see here," (to quote Frank Drebin), as it relates to inflation. Consumer spending funded by government debt is of inferior quality as compared to spending funded by increased production. In January Americans spent their debt-funded government checks that were mailed out at the end of December. … Continue reading Long Rates Continue To Climb As Inflation Persists. Nothing To See Here.
We found rampant asset inflation around most every corner. Frankly, it was not difficult to find. The Fed either needs to re-tool its definition of inflation or be transparent about the fact that it is working diligently to promote the wealth effect. Here are a few asset bubbles as measured from the market trough in … Continue reading We Found The Inflation The Fed Is Looking For
I mentioned to a friend last night that I expect 1% Real GDP growth once we normalize after this recovery that will last at least for the next several years. However, the traditional "Real GDP" calculation understates inflation due to its narrow definition of inflation - the CPI. The Bureau of Economic Analysis does not … Continue reading Real GDP Doesn’t Begin To Tell Inflation’s Story
