That is the track record the "Inflationistas" have amassed in predicting Inflation, Deflation, Disinflation - really ANY "Flation - so far in the 21st century.
0 for 14
My advice: Pour yourself a tall glass of STFU + go find another expertise to pretend to have...
How can any economist have missed 3 decades of deflation?
Automation, global labor arbitrage, digitalization + outsourcing/offshoring all have worked to drive global prices lower.
Missing this and/or ignoring it explains that awful inflation-predicting track record
The concern that "Spiking Commodity prices" are running away from buyers has been thoroughly debunked.
Commodity traders know that "The cure for high prices is high prices..."
Example: Lumber prices
They dropped almost 40% from the record high reached on May 10.
Sawmills are catching up with rampant homebuilding demand in N.America that fueled rally beset by supply shortages.
Buyers balked at historically elevated prices + supplies increased.
"Costs soared partly because of do-it-yourselfers’ spending stimulus checks, but a month of declines show that consumers aren’t about to trigger runaway [inflation]." nytimes.com/2021/06/21/bus…
This timeline nicely explains what occurred over the past 16 months:
Ask yourself how similar or different today is versus the 1970s. Your answer likely determines how concerned you are about whether rising prices are transitory or longer-lasting
WSJ: What Investors Can Learn From the History of Inflation
Lumber, among the world’s best-performing commodities as the pandemic sent construction demand soaring + stoked fears of inflation, has officially wiped out all of its staggering gains for the year.
Semiconductor shortage hurting biz: Companies are paying more for work vehicles when they can find them in stock. Instead of discounts of 8%+ from MSRP; Now, commercial customers are paying over sticker price.
CPI inflation is still about reopening + motor vehicle supply issues.
"Outside of a few categories that are experiencing significant idiosyncratic supply constraints or healthy price normalization, prices rose as much as could reasonably be expected."
Inflation worries focused on the 1970s are misguided: Oil Embargo, Energy Prices, Cartel driven shortages are so very different than the current environment: Economic boom/Reopening, Pandemic shortages, monetary stimulus.
Supply chain shortages of new cars sent Used Car prices skyward. In July they were flat. The Inflationistas managed to scare everyone with their usual nonsense.
If your name is Lawrence H. Summers, you keep penning nonsensical editorials, fail to acknowledge your terrible track record, then accuse everyone who mentions your terrible track record as going ad hominem (even as you make ad hominem attacks yourself).
Automobiles = largest component of inflation in 2021; Prices went ballistic earlier this year due to chip shortages caused by woes in restarting semiconductor production.
As Supply/Demand imbalance normalizes, prices soften.
FOMC seems 2b always behind the curve, historically, going back to the 1990s under Greenspan.
They are a big + boring conservative institution & are fearful of error. They tend to be less aggressive when making decisions, with significant ramifications.
Consider the errors of just the past 2 decades and you can see the biggest mistake they make is either arriving way too late to the party or once they are there, overstaying their welcome:
1. Only 5 stocks driving markets 2. Recession is inevitable 3. Breadth is terrible 4. AI is a bubble 5. Debt ceiling = disaster 6. Problematic new lows 7. Consumers running out of money 8. Earnings will fail THIS Q 9. HH Debt! 10. Rally faltering
Let's see if I can find something to undercut each of those 10 items:
Only 5 stocks driving markets?
Then why are Equal-weighted indices doing so well?
What drives market returns? These rolling 10-year total returns going back to 1909 (via Crestmont Research) show an average ~10% annual total return over any 10-year long period.
Ed Easterling (of Crestmont) breaks down those returns into these components: EPS, Dividend Yield, and P/E Increase (or decrease).
Note how cyclical P/E expansion/contraction is...
This is why it is important to include whether P/Es are expanding or contracting in any definition of a bull or bear market.
It takes the Earth 365 days, 6 hours, 9 minutes + 9.76 seconds to complete 1 orbit – to return to the exact same place relative to the sun. Our planet has done this about 4.54 billion times.
What does this unit of time have to do with investing?
Alas, utterly nothing...
This is an example of the irrelevant nature of the calendar - I'd be curious to see what the data looks like for successive rolling 12-month periods rather than calendar years; it might also be more useful than using January - December periods