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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (100863)	5/31/2013 5:36:51 PM
From: bart13	Read Replies (2) \| Respond to of 217516

Oil wise, the Peak Cheap Oil deniers first need to have their day with an oil price correction (which in my opinion will be accompanied and mostly caused by a recession). But overall, the biggest difference between now and the 1970s is the debt deflation, also known by the kinder, gentler and more PC term of deleveraging. It has almost run it's course. We actually already have hyperinflation in US stocks (per the IASB definition of +100% in 3 years). The Fed can't repress the money printing effects forever as witness the recent moves in Treasuries. Do recall too that the biggest inflation in the 70s occurred while rates weren't exactly low. The next biggest difference between now and then was velocity, and my work shows that it has bottomed or is very close to bottoming. The various bloggers who have been posting M2 velocity numbers (which are still crashing) are misguided - M2 is far from the only part of total money supply. Note the sentiment increases lately too, that will also positively affect velocity. Even today's U. Mich sentiment shows a 3.1% inflation expectation which has been stable for 3 months, and it's almost double the most recent CPI BS. As far as passing along higher costs, the corporate folk have managed to avoid much of it so far by hammering the labor share, which is down to about 58% from the average 65% in the 1970s. That too shall pass, but I don't yet have a target or prediction.