Posted on 06/28/2021 5:24:09 PM PDT by blam
Earlier this year, former Clinton Treasury Secretary and erstwhile Harvard President Larry Summers was pilloried by his fellow Democrats for daring to suggest that the firehose of COVID-inspired fiscal and monetary stimulus would likely cause runaway inflation. Then, over the weekend, Summers doubled down on that (so far, correct) call, warning that inflationary pressures might be more persistent than the Fed’s Chairman Jerome Powell (who continues to insist that price pressures will ultimately be “transitory” despite the FOMC’s decision to move up its expectations for the timing of rate hikes to account for hotter-then-expected inflationary prints) has let on.
Now, it looks like another Clinton-era economic nabob, Summer’s predecessor as Treasury Secretary Robert Rubin (who, let’s not forget, was once a member of Clinton’s “committee to save the world” alongside Summers and former Fed chief Alan Greenspan) is speaking up to warn about the “material risk” that the US could see persistently elevated inflation for the foreseeable future.
Rubin also praised his successor, saying Summers had performed “a great public service” by warning that the recent spikein prices might fail to dissipate amid the trillions of dollars of spending and relief ordered up by President Biden and the Democrat-controlled Congress.
Speaking Monday during the virtual Aspen Ideas Festival, Rubin said “we have a strong economy.” And while inflation may ultimately prove to be transitiory, “there’s a material risk of it being enduring.”
“As an investor and as a policy maker, I would have a cautious bias,” Rubin said.
Summers said over the weekend that he sees prices rising “pretty close” to 5% at the close of the year. To be sure, that doesn’t seem like much of a stretch considering that May’s headline CPI number showed prices have jumped 5% over the prior 12 months.
Rubin’s comment pits him and Summers squarely against their successor, Treasury Secretary Janet Yellen, who has been one of the most visible advocates of the “transitory” inflation argument, and one of the loudest cheerleaders’ for the Democrats’ COVID-era spending (“now is the time to go big” – remember?) Yellen recently told lawmakers that she expects inflationary pressures to recede below May’s level by the end of the year. The Fed’s inflation projections also see price pressures easing.
But Rubin and Summers aren’t the only ones sounding the alarm about inflation (though they might be the only Democrats). BofA Chief Investment Strategist Michael Hartnett recently wrote that, far from being transitory, hyper-inflationary pressures might persist for as long as four years.
Observing that US inflation averaged 3% in the past 100 years, 2% in 2010s, 1% in 2020, and is “annualizing 8% thus far in 2021”, Hartnett writes that it is “so fascinating so many deem inflation as transitory when stimulus, economic growth, asset/commodity/housing inflations (are) deemed permanent.” Assessing the risks from a global perspective, a team of senior Deutsche Bank strategists recently warned that developed economies like the US and Europe are “sitting on a time bomb”.
If this keeps up, the Dems will need to dispatch Stephanie Kelton to get their errant economists back in line.
More immigration, more free money etc. means more people buying stuff they couldn’t afford before.
Artificially raising demand. Econ 101.
Looks like the young professionals’ daily cheap $8.75 lattes are a thing of the past.
Inflation: Too much money chasing too few goods.
Will people who don’t get the stimulus checks (all of us soon) and those who no longer get enhanced unemployment money (deadlines coming) stop spending due to necessity? Many of us don’t go to movie theaters and top rock concerts. I think Paul McCartney type nostalgia tours were many hundreds per ticket. Wealthy Boomers only.
When prices are sky high will we have another Woody Guthrie
and Grapes of Wrath shift to being penniless?
Too much consummin’.
Rubin the Dwarf’s plan is to trash the economy and blame Trump.
Its not going to work.
Summers lost 1.5 billion of Harvaaaaards money, he is a dolt!
The Feds have been expanding the money supply at 38% yearly. Sooner or later the market catch’s on. Usually takes a year or two. As people figure out how worthless their money is becoming they spend it faster and faster to get what value they can out of it. The lag time eventually reachs zero like in Venezuela where nobody wants the currency. It all depends on how fast the money supply is expanding.
If it really was TEOTWAWKI then the bond market would have collapsed. Alas, the 10-Year Treasury, after bottoming out at 0.55% last year, remains relatively near that all-time low at 1.54% and lumber prices are now falling back to earth.
I see a motive for this fearporn: to push freeze-dried food sales, or get clicks, or sell doomsday or gold newsletters. Or maybe it is simply that after 15 months of spending 30 days in the hole to effect 2 weeks of curve-flattening, people want to be perpetually triggered. I get it - there isn't too much hope with Bidet in the White House and conservatives slobbering all over Putin's faux defense of Christendom...it seems like we've lost our minds.
But we survived 8 years of Obama and 8 of Clinton. Uncle Sleepy is a relative joy.
Of course a well-diversified portfolio of food, water and ordnance is helpful, but the financial markets have beaten gold over the long haul, and through inflation and stagflation. Hold steady, be wary any inflation concern trolls that accepts payment in the dreaded "fiat currency," and call me when the 10-Year Treasury hits 400 basis points.
Having lunch with some friends today, they were lamenting how the prices have soared at all their usual summer vacation destinations. Those with big bucks will have no problems, the poor don’t go there anyway - the middle class is being squeezed out.
How many new lies will be manufactured ..
No matter how much they lie, cheat, and steal ,
... they cannot fool the American people.
“Dogs Playing Poker!”
My only motive is to make Freepers aware of the bad news before the inflation hits. I don't post it anywhere else. Let the rest of the country find out the hard way. They need a hard lesson. Inflation will probably be redefined , yet again, to hide how bad it really is.
I am totally for the dissemination of information. It’s part of what makes markets efficient. I am looking forward to your posts.
Buffets have been struggling to stay afloat. Hometown and Furrs are now history. Golden Corral has had some of its partners declare Chapter 11. I mention this because I use to pay 10$. The price went to 14$. I’ve been predictng 38% inflation. I was a bit surprised to see a 40% rise this soon.
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