In my base-case, we are going to see a double-top inflation picture, but I sincerely hope that we don’t resummon our inner financial illiterates, if rates drop towards 0% due to temporary disinflation
That's a seminal article, Andreas
Thank you very much.
What's your idea of a fair P/E multiple in the current regime, also considering the real yield vs equities chart?
bang on Andreas, 0% interest rates make exactly zero sense
"We have always seen double tops in inflation, once inflation gets as hot as it is now" Sample size here is tiny to extrapolate the same thing will happen again this time? We are entering a prolonged period of tighter financial conditions where FED may need to accept higher inflation (4-5%) in order to balance recession risk trade off with financial stability, I do not think double top however as supply chain from covid and Russia war were unique events unlikely to have simultaneous inflationary impact again. Maybe something yet unknown causes second spike?
There is NO precedent for rate hikes at the same time as persistently downward sloping (~30-40bps) yield curve, isn't it? this whole hiking episode seems as odd as our decade long QE did! Hiking in presence of a downward sloping persistence. In fact it goes against ALL the textbook Central Bank reflexivity (ie both reflecting and setting of expectations, even as they hike) in working "with" rate markets!
I hope you're wrong about the double top (though I think you're not). The sooner we get to a real cost of money, the sooner funding moves from throwaway meme projects to ventures that add value to the economy. My own industry (private equity) will be hit hard by this, but it's badly needed.
I see the 0% consequences in the stack of abandoned Tier Trotinetts in front of my house every day!
What's your take on government debt refinancing?
Hi Andreas, thanks for all your work. I’d like to heard your ideas (and Alfonso and other collaborators in Real Vision) on the consequences of the FED policies for the ROW. Central Banks are probably in a lose-lose situation. Feels like we will be in a TINA on steroids. Looking Forward to Steno Reaserch. Good luck with that.
Great article Andreas 👍 I will definitely be following your commentary. I hope also that you and Alf continue your Sunday trading podcast and that you continue as a contributor to Real Vision. Best of luck, Woody
Fantastic read, sir!
Great job and very good logic!
What about efficiencies...do you really believe in efficiencies because all the environmental bigreset is based on the fact that we will re-invente efficiencies. Obviously, these politicians have not read about the Jevons Paradox...they should. https://www.frontiersin.org/articles/10.3389/fenrg.2018.00026/full
Interestingly, female hygene, perfume, personal care and makeup industry has not seen major inflation yet is one of the most poluting industry in the world. Not affected apparently by supply disruption. It is telling indeed.
I don't trust environmental feminism or innovations to draw hope of a better future, whether observing financial markets trying to express economic reality or in the planet's betterment.
I guess the next best thing is for a giant asteroid to hit the earth.,.. In the name of the Universe.
Very interesting, thank you. Can you expand on Chart 4 please - it says 1974-84 experience, (10 years) but the x-axis (current time) is 17 years, which doesn't make sense to me.
great take, thank you!
why wouldn't you ape into blow off top of a 15 year bull market? last chance to top up, ur not gonna make money during a global deflationary bust might as well try to make a few bucks on the bang out