Powered By Blogger

About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, November 23, 2017

Continuing Bet Against Inflation

My longer term inflation pressure gauge strongly suggests some acceleration of inflation
pressure over 2018 - 19. However, the shorter term inflation pressure measure, although
hitting a low this year, has advanced only meekly despite a nearly global advance in economic
momentum. The broad CRB commodities index is up but slightly over levels seen in mid-2016.
Even the industrial commodities composites have leveled off after advancing earlier this year.
I think it is true that despite faster economic growth, there is still significant excess plant capacity
in the world, but there are a couple of other factors worth remembering. One major one has been
the very substantial over-investment in inventories in evidence for at least the past five years. I
believe excess stocks are being worked off and that as near term supply comes into better
balance with demand, commodity prices should rise a bit faster. The other big change we have
seen since the early part of this new century has been the 'financialization' of materials markets
through rapid growth of futures trading and the development of products that both traders and
investors can access without having to deal with the actual physical volumes themselves.After
the major global economic downturn of 2007- 09, materials markets have have lost favor to
the financials reflecting the continuing imbalance between materials supply / demand.

However as the slack comes out of the materials markets and inventory overhangs are cleared,
there may well be a shift in trader preferences from financials back toward materials, one which
could be much stronger than the actual improvement of materials demand vs. supply.

With prospects for faster inflation still rather humble short term, the financial markets still
hold sway. Consider the exceptional tightening of the yield curve: 30y Treas% - 2y%


Clara Mellor said...

Steel Strips Wheels extends rally on export order for 6000 truck wheelsCapitalStars

Hopper said...

Additional massive transform we have now viewed because beginning component of that completely new centuries has become this http://www.cheaptranscriptionservices.net/transcribe-audio-file-to-text-online/ connected with products promotes as a result of swift increase connected with futures dealing along with the progress connected with merchandise of which both equally professionals in addition to shareholders can certainly admittance devoid of having to deal with the exact real quantities of prints independently.

Christopher Blevins said...

There are actually a physiological as well as other ways thanks to which you can purchase the serious sample. Just simply aim to cope with a the following vicinity and then determine website to find extra resource the fresh surroundings of times listed here. Additionally you can purchase the most effective everyday living sample.

Gabroo said...

You can now continue your work with this field and can enjoy the inflation with the new findings. Just enjoy the new analysis with this link and maintain the new fields. With this blog you can enjoy the new phase of life.

Gabroo said...

A zone of the inflation where you can find your time more great. There is the new zone of the analysis with the help of which you can find the better fun. There is the original source with the help of which you can make your life more good.

William Leeson said...

Now you can carry on your projects with this particular area and may benefit from the inflation using the brand new results. Simply benefit from the brand new evaluation with this particular check it here and gaze after the brand new areas. With this particular weblog you are able to benefit from the brand new stage associated with existence.

JohnA swingle said...

These factors are helping in economic plans and with such results are giving us more ideas. We must try this for finance students who are working for the accounting.

EvaRlara said...

This is the official site for those who wants to know how inflation effected in our society. Inflation is the One of major factor in which the price of goods and services are getting higher. and this condition is not good for country.