Commentary China’s consumer prices are flat, while producers are hit with rising costs, and workers are facing lower wages and a tighter job market. The Chinese Communist Party (CCP) had hoped that removing COVID-19 restrictions would jump-start the economy. However, after a brief uptick during the first quarter of the year, demand for industrial and…
US Desperately Needs a Long Deflation
Commentary Consumer Price Index (CPI) day has been the same for most of the last 12 months. Data comes in and it’s not good. The mainstream media, however, immediately broadcasts the Biden administration spin that inflation is easing so stop worrying about it. Today, the report is elevated beyond expectations: 0.2 percent for the month…
As Discussions of Deflation Flood China’s Internet, Expert Warns of ‘Financial Idling’
China’s online platforms have been inundated with conversations about deflation for the past month. A financial expert pointed out that China is not a market economy, and applying Western economics to assess it is difficult. Moreover, the expert said that “financial idling” is a problem that must be dealt with; otherwise, the economy will continue…
Destruction of Capital and Central Banks
Commentary Inflation in assets inevitably leads to bubbles bursting. In the period when central banks were glad to see limited consumer price increases despite large increases in the money supply, they created massive inflation in assets. Throughout the quantitative easing era, bond prices spiked, equity valuations soared, house prices increased significantly above affordability levels, and…
Central Banks and the Destruction of Capital
Commentary Inflation in assets inevitably leads to bubbles bursting. In the period when central banks were glad to see limited consumer price increases despite large increases in the money supply, they created massive inflation in assets. Throughout the quantitative easing era, bond prices spiked, equity valuations soared, house prices increased significantly above affordability levels, and…
China’s Quantitative Easing Will Help Little in Economic Recovery: Expert
Several Chinese state media recently said that the central bank’s extensive liquidity injection this year would inevitably result in significant inflation and a surge in home prices. They encourage people to consider buying a house, as real estate ownership can serve as an effective hedge against inflation. These outlets also stated that the property market…
Japan Raises 10-year Bond Yield Limit, Signaling Possible Shift in Monetary Policy
The Bank of Japan announced on Dec. 20 that it was raising the ceiling on its 10-year government bond yield from 0.25 percent to 0.5 percent. Japan’s economic average plunged that afternoon, and the Japanese yen rose in response, signaling investors that the last country with negative interest rates was going to start ending its…
Ark’s Cathie Wood Calls Fed Hikes a Mistake and Prepares for Deflation
September 14, 2022
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Business & MarketsCathie WoodCompaniesdeflationeconomic policieseconomyinflationMarketsrecessionstocksUSUS News
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NEW YORK—Star stock picker Cathie Wood of Ark Invest cautioned that the Federal Reserve is making a mistake with its widely-expected interest rate hikes to bring down high inflation and said she is more concerned about deflation. The benchmark S&P 500 fell more than 2 percent and Treasury yields surged Tuesday after data showed consumer…
Elon Musk Sees Deflation Coming If There Is Another Major Fed Rate Hike
Elon Musk has warned that another interest rate hike by the U.S. Federal Reserve could result in deflation hitting the economy. Last year, Musk predicted that the U.S. would enter a recession. On Friday, Federal Reserve Governor Christopher Waller warned that he expects a “significant” interest rate increase later this month. He mentioned that policymakers should stop…
ARK’s Wood Says Fed Is Making a ‘Mistake,’ Sees Stocks Bottoming
July 14, 2022
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Business & MarketsCathie WooddeflationFederal Reserveinterest ratesMarketsstocksU.S. stocksUSUS News
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NEW YORK—The Federal Reserve is ignoring signs of deflation as it continues its aggressive interest rate-hike plan to combat inflation and will soon be forced to make a dovish pivot, star stock picker Cathie Wood of Ark Invest said in a webinar on Tuesday. “The market has figured out the Fed is making a mistake,”…
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