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Likelihood for stagflation?
03/31/2020, 9:56 AM
Hi Cullen. Thanks for your calming voice during these scary times.
It seems to me as though this is an environment that could lead to stagflation. Global governments are about to spend tens of trillions of dollars supporting their economy, but the productive capacity of those economies is unlikely to respond correspondingly. Does this make you worry about stagflation?
04/01/2020, 9:35 AM
It's a growing concern. The longer this thing persists the more govts will respond with fiscal stimulus. And the longer that means productive capacity is being met with pure stimulus. This is a recipe for inflation. Perhaps not 1970s style inflation, but certainly higher than what we've become accustomed to.
"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche