Discover and read the best of Twitter Threads about #inflation

Most recents (24)

What are the best channels to #invest in if I want monthly #returns?
What can we teach #children about #financialindependence?
What is the right #assetallocation strategy?
Read 6 tweets
#Assetallocation changes as you near retirement. What if your equity #investments are stuck in a phase where the markets are battered?
Can I share #income by creating a trust?
How can an IT employee generate alternate sources of income?
Read 25 tweets
Thanks to @GeoffCutmore & @cnbcKaren for having me on the show this morning.

Here's a short thread of the notes - entitled, "Time to Get Real?" - which I put together in preparation.
They should hopefully be self-explanatory:-

#SquawkBox #CNBC #macro #equities #commodities
You've heard it here before: pay out or pay down is a big part of the #inflation equation:-
Yes, there's a "V" - or at least a flipped square root sign - underway, but will it extend far enough & fast enough?
Read 11 tweets
The #Fed wants #inflation

The single biggest issue for the world today is that there is too much debt in the financial system
Globally the debt to GDP ratio is 322%
Amongst G-7 nations, the numbers are striking
The U.S.’s Debt to GDP is 106%
Germany’s Debt to GDP is 61%
Japan’s Debt to GDP is 236 %
The United Kingdom’s Debt to GDP is 85%
Canada’s Debt to GDP is 89%
France’s Debt to GDP is 98%
Germany is the only country that has been aggressively paying down its debt
Germany’s debt to GDP skyrocketed to 82% as its economy collapsed
Now there are three ways to deal with excessive debt

1) Pay it off through growth or fiscal restraint.

2) Default/ restructure

3) Attempt to inflate it away by debasing your currency
Read 7 tweets
#investing during volatile times are challenging
You have to invest in cheap and what has relative value and if you can manage Geo political environment, you have a winner in your hand
The last 20 years especially since 2009 was all about growth stocks and not about value buys
The #Fed , the #ECB, and all central banks were slowly destroying the cost of capital and people were being pushed more towards risk assets , these accelerated tremendously in 2020
Growth was nearly a passive investment, all money managers were pushed into the corner of ..
.. investing room , to give an example consider ETF, the more capital that goes into it, it triggers all of the algorithms to say, stock sector is above its 52-day moving average, and by default it will allocate another one percent
Read 12 tweets
The @federalreserve’s #JacksonHole Policy Symposium has typically been thought of as an event of #academic contemplation, rather than of active #policy innovation, but 2020’s event proved to be the exception to the rule.
That’s because #Fed #ChairPowell surprised many by introducing the #FOMC’s Statement on Longer-Run Goals and Monetary Policy Strategy, which was not expected until later in the year.
In many respects, the Strategy statement represents a mirror image to the #Fed’s stance more than a generation ago, in August 1979, when Chair Paul #Volcker took over leadership of the central bank…
Read 7 tweets
Ich will nicht schon wieder live-tweeten, aber wenn #Lanz fragt, ob jetzt in Deutschland eine #Inflation droht, dann frage ich mich, ob wir in Deutschland jemals ökonomische Kompetenz erlangen.
Clemens #Fuest verbreitet Angst davor, Vertrauen in die ökonomischen Möglichkeiten des Staates, aber nicht aus ökonomischen, sondern eher aus politischen bzw. ideologischen Gründen. #Lanz
Servicetweet: Asiatische Staaten, die, anders als Deutschland, keine marode Infrastruktur haben, sind besser mit der Pandemie zurecht gekommen als Deutschland. Der deutsche Weg des schlanken Staates ist gescheitert.
Read 4 tweets
#jacksonhole #jeromepowell
The possible era of #deflation in a fight against #inflation

Despite Zero or low Interest rates central banks have had a hard time reaching their inflation targets. But now it seems confirmed that it’s not low central bank policy rate which causes...
low inflation , but rather the low real interest rate
Ever since central banks embarked on their near zero interest rate policies and large scale asset purchase programme , Reality has proved them wrong , we have seen trends towards deflation rather than inflationary pressures
Post 2020, what we are seeing is loss of jobs and low employment levels , in case there is severe declines in demand side , and If employers are unwilling or unable to reduce wages they will have to reduce the number of employees,
Read 8 tweets
Let’s talk #Venezuela and it’s never ending super hyper #inflation for a second
Thread 👇
1/ According to the consumer price index elaborated by the National Assembly, monthly inflation in #Venezuela jumped to 55.1% m/m in July – thereby taking it back above the hyperinflation baseline of 50% (!)
2/ Under widely accepted definition of hyperinflation proposed by Cagan in seminal study (1956) an episode of this extreme economic phenomenon begins when threshold is 1st crossed but only ends when monthly increase in price level drops below 50% and stays there for at least 1yr
Read 11 tweets
The massive reset of the middle class in 2020 after #COVIDー19

#inflation #deflation #stagflation
#usfed #euro #dollars

Western countries are dealing with this crisis by increasing debts, increasing social spending and hence, ensuring the destruction of their currencies
and their bond markets and impoverishing the citizens along the way.
The destruction of the middle class allows governments to enact all sorts of dangerous policies because the middle class is really what rises up.
However, in other countries, mainly in Asia, Eastern Europe, and even Russia, they’re not handling this in the same fashion.
Many of these countries don’t even have social spending programs to the extent that the West does.
Read 7 tweets
Inflation:

One of the biggest talking points of the Covid-19 crisis. There are many valid points on all sides of the argument of whether we are going to be faced with deflation, stagflation or inflation. Many of the best and brightest are pondering this question, ... /1 Image
... as it influences CB policy moving forward.
I just wanted to write down a few points on whether QE, and the huge increase in M2 that we've been seeing, will automatically lead to high(er) inflation. Firstly, assuming M2 flows down to the general population, an increase... /2
... in the money supply doesn't neccesarily lead to inflation, as people tend to save more money during times of economic hardship. We have already seen a pick up in the saving rate in this recession. On the bond buying side of QE, even though the CBs are purchasing bonds... /3 Image
Read 14 tweets
One noteworthy aspect of the #COVID19 market has been the success with which the #Fed & other #centralbanks have been able to stem the “Covid Crash” and then help control the recovery. The current backdrop reminds me a bit of the 1942-1946 #QE cycle. Let’s take a look. (THREAD)
1/ After the Great Depression, the government went into high gear during WWII and, in the process, ran up huge government debt. Federal debt as a percent of #GDP jumped to 116% from 39% during the 1st half of the 1940s.
2/ Not only did the Fed monetize the debt by increasing its balance sheet 10-fold, it repressed the entire #yieldcurve by capping short rates at 3/8% & long rates at about 2.5%. #Inflation ran up but, with the #Fed repressing rates at low levels, real rates went negative.
Read 24 tweets
#RBIPolicy at 12pm today,is likely to keep status quo on #REPO rate, which was last lowered by 40bps in May 2020,to 4%

In 2020,REPO cut by a total of 115bps

In 2019 REPO cut by 135bps

What may weigh on #MPC's mind is #Inflation,which was 6.09% in June 2020 Vs 5.84%,in March'20
Some like #ICRA predicting 25bps REPO cut,saying #RBI may want to be ahead of the curve,despite build up of inflationary pressures

Well,10 Yr #BondYield was 5.83% y'day

Today 10 Yr@5.84%--Bond markets are clearly not expecting rate cut

#REPO at 4%,is already lowest in 20yrs
As expected, #RBIPolicy leaves #REPO& Reverse REPO unchanged

Right thing to do,as further reduction in rates at this stage, would have distorted #YieldCurve

Already,3 month #MCLR of #SBI is 6.65%& 1 yr at 7%

#MonetaryTransmission is happening,so more cuts not needed currently
Read 5 tweets
Another #tech bubble? There’s a lot of talk about the FANG mega-cap #growth companies leading the market, just like 2000. The #tech companies’ narrow leadership of the #SPX is a big reason perma-bears are hating on the #market. Right or wrong? Let’s take a closer look. (THREAD)
1/ In 1999 I did a deep dive on the top darling stocks to compare the lopsided leadership of the late 1990s to the early to mid-1970s. Earlier, during the 1960s, the cyclical #bullmarket from Oct. 1966 to Nov. 1968 produced a huge bubble in retail speculation.
2/ #Tech & space companies were big favorites. Then came the #recession of 1970 & a painful bear market that wiped out speculators. During that decline & recovery, institutional investors dominated the #stockmarket & were buying tried-and-true stocks with bulletproof #earnings.
Read 18 tweets
#MMT & #Inflation One more time for the people in the back (or without a search engine). #Thread
Read this @FTAlphaville piece by @stf18 @NathanTankus & @rohangrey: ftalphaville.ft.com/2019/03/01/155…
Here's my way of framing the conversation. 1/n
If you've been in a coma for the last 12 years, you need to catch up on your central banking a bit:
"Fed has no reliable theory of inflation, says Tarullo" on.ft.com/3hXmj5N
2/n
In other words, mainstream econ has no idea what causes inflation, let alone how to deal with it. #MMT does. As an MMTer, I am obsessed with the risk of #inflation. 3/n
Read 7 tweets
Daily Bookmarks to GAVNet 07/30/2020 greeneracresvaluenetwork.wordpress.com/2020/07/30/dai…
Evolutionary origins of the SARS-CoV-2 sarbecovirus lineage responsible for the COVID-19 pandemic | Nature Microbiology

nature.com/articles/s4156…

#pandemic #evolutionary #origins #microbiology
Strike 1: Gold; Strike 2: Dollar; Strike 3: Inflation Expectations – Alhambra Investments

alhambrapartners.com/2020/07/28/str…

#inflation #gold #expectations #investments
Read 6 tweets
#sundaybrief This week @anup_malani and @VaidehiTandel discussed the return of #migrantworkers from rural areas and its likely implications on the spread of COVID and on the #Urban economy.

livemint.com/opinion/online…
In @TheWireScience, Sneha argued for prioritising patient #privacy while containing the spread of the novel coronavirus. @DataGovNetwork
science.thewire.in/health/do-indi…
.@CafeEconomics analysed the curious case of Indian inflation in light of recently announced #inflation estimates.
livemint.com/opinion/column…
Read 3 tweets
1/Thanks very much to my old friend @steve_sedgwick @SquawkBoxEurope for the chat this morning
2/We looked at #Growth v #Value, the #US v ROW, we touched on #bonds and borrowing, #money supply, #inflation, #lockdown, #commodities & #gold - all in under 10 mins!
3/If that was all a bit rushed, here follow the notes I sent to accompany our chat:-

#macro, #markets
Read 12 tweets
Under base case that COVID#19 pandemic continues to subside (without large-scale second wave), a recent paper by Peng Wensheng at CICC foresees modest global recovery in 2H20, with #China growth outpacing US and EU... 1/5
...The recovery will be "atypical" since supply is expected to recover more rapidly than demand. This further implies muted #inflation in the near term and a low level of "natural interest rate"... 2/5
...For policy response to the pandemic, #US relied more on fiscal relief, while China leveraged monetary expansion more heavily. Moving forward, China should strike a balance between management of short-term (economic) cycle and medium-term (financial) cycle... 3/5
Read 5 tweets
In a world where people still starve (though thankfully proportionately fewer over time) and material needs in general are unsated, there can be no #savingsglut. There CAN be misallocations of saving -due to corrupted price signals or corrupted polities, or both- but that’s...
...a very different matter.
Secondly, ‘saving’ is supposed to represent an available resource -whether for consumption or production, whether material or human. It is NOT something which magically appears when the #centralbank & its minions sit behind a keyboard...
If #JeromePowell or M #Lagarde cause a million smackers to appear in everyone’s account overnight, bank balances will have risen; #savings, will NOT. Even a man as unnuanced as Mussolini got this, sneering that Italians’ wealth would not rise if they all had more printed...
Read 13 tweets
As monuments are being torn down i am going to create one. The work started last week when i re-homed a tatty old rescue sword. All week i have been tinkering. Yesterday i started the research.

This will be an ongoing thread for a bit.
#sword Image
Time hadn't been kind. Must have been stored either completely damp or in a damp space. Active rust was having a go at the blade and guard leaving some quite deep pitting. Doubtful it was going to see another century. ImageImage
The 1897 pattern sword is very common and reasonably cheap. All antique swords are like time machines to me. They were present in momentous times and often carried by people in fear of their lives. I can't help travelling back and wondering at it all when holding one. Image
Read 233 tweets
China abandons GDP target for first time in decades. Historical decision, significance goes beyond current COVID-19 crisis. (1/5) #GDP #China #TwoSessions
bit.ly/2XqPG8a
Very wise to drop GDP target. Many, including Liu He, probably want to see it disappear permanently. But GDP target much more than a policy goal. GDP growth = foundation CCP's legitimacy for over 30 yrs. Scrapping 2020 target also affects CCPs long-term promises and goals.. (2/5)
What is next? Do GDP targets (including long term 2020-target) permanently disappear? Simply postpone achieving 'moderately prosperous society' for 1 year? Or further redefine this long-term goal? Shift to (more) environment, health, well-being targets? (3/5)
Read 5 tweets
#RBI cut by 40bps each of these👇
#Repo rate to 4%
#ReverseRepo to 3.35%
#BankRate to 4.25%

Decision was reached after 5:1 vote,with #ChetanGhate,lone voice calling for 25 bps cut

#MPC meet was held ahead of schedule from 3rd-5th,June

#EMI #moratoroum extended by 3 more months
Moratorium extension till 31st August 2020,is both timely &reflective of @narendramodi govt's alacrity--Big relief to #MiddleClass

Measure to convert #moratorium interest payment into #TermLoan payable in FY21,is helpful

This will reduce #NPAs &stress on banks' balance sheets
#RBI's cut in #Repo will reduce cost of funds&extension of #moratorium will be supportive of financial stability;#Rates across #YieldCurve will move lower from current levels

Fall in #ReverseRepo rate will disincentivise banks from #hoarding #liquidity&coax them to lend

#Covid
Read 10 tweets
"Last time we did money printing nothing happened"

Few people actually understand why we got away with it

1/ It was done at the same time China was undertaking massive infrastructure spending

2/Tech also held prices down

3/Globalisation was in full swing which is deflationary
All these factors have now broken down or reversed

Globalisation is now dead.

Talk is of restoring national production chains which is hugely inflationary (rebuilding the chain and doing it with a higher cost labour force).

Supply chains are also broken at both ends
We now have a supply shock and a demand shock

Tech offshoring manufacturing may have to be re-shored with the corresponding price increases. Tech startups can no longer burn cash indefinitely

What we are seeing in the commodities (particularly oil) is further reduction of CAPEX
Read 5 tweets

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