{"id":57772,"date":"2021-05-11T06:10:29","date_gmt":"2021-05-11T11:10:29","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57772"},"modified":"2021-05-11T06:10:29","modified_gmt":"2021-05-11T11:10:29","slug":"weekly-commentary-generational-turning-point","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57772","title":{"rendered":"Weekly Commentary: Generational Turning Point"},"content":{"rendered":"

Weekly Commentary: Generational Turning Point<\/a><\/h3>\n
There is an overarching issue I haven\u2019t been able to get off my mind: Are we at the beginning of something new or in the waning days of the previous multi-decade cycle?<\/p>\n

May 5 \u2013 Wall Street Journal (James Mackintosh): \u201cWe could be at a generational turning point for finance. Politics, economics, international relations, demography and labor are all shifting to supporting inflation. After more than 40 years of policies that gave priority to the fight against rising prices, investor- and consumer-friendly solutions are becoming less fashionable, not only in the U.S. but in much of the world. Investors are woefully unprepared for such a shift, perhaps because such historic turning points have proven remarkably hard to spot. This may be another false alarm, and it will take many years to play out, but the evidence for a general shift is strong across five fronts.\u201d<\/i><\/p>\n

The \u201cfive fronts\u201d underscored in Mr. Mackintosh\u2019s insightful piece are as follows: 1) \u201cCentral banks, led by the Federal Reserve, are now less concerned about inflation.\u201d 2) \u201cPolitics has shifted to spend even more now, pay even less later.\u201d 3) \u201cGlobalization is out of fashion.\u201d 4) \u201cDemographics worsen the situation.\u201d 5) \u201cEmpowered labor puts upward pressure on wages and prices.\u201d<\/p>\n

The analysis is well-founded, as is the article\u2019s headline: \u201cEverything Screams Inflation.\u201d After surging another 3.7% this week (lumber up 12%, copper 6%, corn 9%), the Bloomberg Commodities Index has already gained 20% this year. Lumber enjoys a y-t-d gain of 93% – WTI Crude 34%, Gasoline 51%, Copper 35%, Aluminum 26%, Steel Rebar 32%, Corn 51%, Soybeans 22%, Wheat 19%, Coffee 18%, Sugar 13%, Cotton 15%, Lean Hogs 59%… The focus on inflation is clearly justified. Yet Mackintosh began his article suggesting a \u201cGenerational Turning Point for finance\u201d – rather than inflation. Let\u2019s explore\u2026<\/p>\n

I mark the mid-eighties as the beginning of the current super-cycle. A major collapse in market yields (following the reversal of Paul Volcker\u2019s tightening cycle) promoted financial innovation and the expansion of non-bank Credit expansion.<\/p><\/div>\n

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\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Weekly Commentary: Generational Turning Point There is an overarching issue I haven\u2019t been able to get off my mind: Are we at the beginning of something new or in the waning days of the previous multi-decade cycle? May 5 \u2013 Wall Street Journal (James Mackintosh): \u201cWe could be at a generational turning point for finance. […]<\/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":[124,7756,3487,16861,303,426,431,534,3650],"class_list":["post-57772","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-credit-bubble-bulletin","tag-cycles","tag-doug-noland","tag-fed","tag-inflation","tag-interest-rates","tag-monetary-policy","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57772","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=57772"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57772\/revisions"}],"predecessor-version":[{"id":57773,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57772\/revisions\/57773"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}