{"id":26863,"date":"2017-10-15T16:14:09","date_gmt":"2017-10-15T21:14:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26863"},"modified":"2017-10-15T16:14:09","modified_gmt":"2017-10-15T21:14:09","slug":"eric-peters-this-is-the-nightmare-scenario-for-the-next-fed-chair","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26863","title":{"rendered":"Eric Peters: “This Is The Nightmare Scenario For The Next Fed Chair”"},"content":{"rendered":"

Eric Peters: “This Is The Nightmare Scenario For The Next Fed Chair”<\/a><\/h3>\n
<\/section>\n
\n
\n

While we will have much more to share from the latest weekend letter by One River’s Eric Peters shortly, we found the following section on inflation vs asset bubbles – a topic which BofA’s Michael Hartnett has been focusing extensively on in the past year and which serves as the basis for the “Icarus Rally<\/a>” – particularly notable as it explains all of today’s comments from Janet Yellen and other central bankers<\/a>, discussing why it is only a matter of time before inflation returns, as the alternative, as Peters’ explains, is a world in which yields simply refuse to go up, leading to a nightmare scenario for the next Fed chair, who will be forced to pop the world’s biggest asset bubble.<\/p>\n

Excerpted from the latest weekend notes by One River CIO, Eric Peters:<\/em><\/p>\n

\u201cWhy are we not experiencing deflation?\u201d he asked. \u201cHow can the top five stocks in the Nasdaq reduce US GDP but we feel better off?\u201d he asked. \u201cWhy are Americans buying no more cars today than in 1978 when our population is 100mm higher?\u201d he asked. \u201cWhy compare today to a world of combustion engines when we have so many more interesting things to do without moving an inch?\u201d he asked.<\/p>\n

\u201cAnd why do central banks create endless bubbles to restore an inflation rate from that ancient time?\u201d <\/strong>he asked. \u201cWhy is that not the right question?\u201d\u00a0<\/em><\/p>\n

\u201cGlobal profits are rising, unemployment is falling, growth is up, wages too,\u201d said the strategist.<\/p>\n

\u201cYet bond yields seem unable to jump.\u201d <\/strong>US 10yr bond yields are 2.27%, Germany 0.40%, Japan 0.05%. \u201cThe cyclical surprise is that the Phillips curve finally kicks in, just as everyone gives in.\u201d US unemployment is 4.2%, a 17yr low. Germany 3.6%, a 37yr low. Japan 2.8%, a 23yr low. \u201cAnd the biggest structural surprise is that technology has rendered wage inflation a phenomenon for the history books.\u201d<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Eric Peters: “This Is The Nightmare Scenario For The Next Fed Chair” While we will have much more to share from the latest weekend letter by One River’s Eric Peters shortly, we found the following section on inflation vs asset bubbles – a topic which BofA’s Michael Hartnett has been focusing extensively on in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[37,124,13503,303,16506,426,451,15488,3650,4318],"class_list":["post-26863","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubbles","tag-central-banks","tag-eric-peters","tag-fed","tag-fed-chair","tag-inflation","tag-janet-yellen","tag-one-river","tag-us-federal-reserve","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26863","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26863"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26863\/revisions"}],"predecessor-version":[{"id":26864,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26863\/revisions\/26864"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}