Vi, I have great respect for you and Mish. But nobody's thinking has encompassed all the realities, and not even the most prominent guru deserves disciples. I read easily 100 different views in a month, probably 30 each week, at least 10 a day. Economists, bloggers, and of course, posters: here and elsewhere.
In my opinion, the danger lies in getting "locked in" to any view. Even if one accepts a given outlook for the time being, it's merely an operating assumption.
FWIW, the view of many economists (I can post links if you like) is that inflation (and hyperinflation) IS a "latent" risk, not present in the current environment as Mish states. Almost uniformly, the greatest danger they see is that the Fed's exit strategy won't work. But unlike the majority view on SI, many state that it can work, and it will. Of course there are others who say it won't.
What if it partially works, and we revisit double-digit inflation and interest rates, like the 80's? Nobody knows.
There's no question that right now, crash-induced instant deflation has been avoided. There's also no question that we're still in a contractionary environment, when the RISK of deflation is being counterbalanced by injections of liquidity. Which in turn creates a RISK of inflation.
I appreciate your views, and Mish's; I read you both regularly. But as Dylan said:
"Don't follow leaders,
Watch your parking meters"
Since I never viewed either of you as having the only correct view, I attach no importance to whether you or Mish is right or wrong. For those who need a guru, I suppose a choice has to be made. Those who don't need a guru can make their own choices, using the debates among others as contributors to their own thinking.
Regards,
Jim |
