In a recent interview with Eric King of King World News, he notes that the once dormant threat of inflation could be waking up.
From King World News:
...That having
been said, the Federal Reserve Bank of St. Louis puts out what is called
the ‘Monetary Stock.’ It is the ‘raw material’ of the money supply,
and it has been dormant throughout the year.
The report for
the first part of this year suddenly spiked higher, and it’s something
that I’m going to keep a very close look at. It may be, and there is
some seasonality, but I think people need to begin watching the money
supply, particularly the M2, and see if that starts to accelerate...
If the velocity
of money begins to accelerate and M2 begins to move up, then you will
begin to hear people talking about or at least worrying about inflation
again..."
Cashin notes that this isn't just theory. Indeed, we've seen it before in history. Most people know of the most notorious experiences: Weimar Germany and Zimbabwe.
Somebody once
asked a famous literary character (who lived through the Weimar
hyperinflation) how did he go broke? He said, ‘Slowly and then
suddenly.’ The Weimar Republic saw inflation develop very slowly, and
then suddenly. Once it developed it was almost like Zimbabwe except it
was in a major nation, and destroyed the moral values of a whole
civilization and basically led to the underpinnings of World War II.”
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