Last
year I was convinced that the Fed would never raise in an election year. Six
months later, inflation is really starting to build up and now I've changed my
mind. I've talked about the crazy housing pressures before. But really what
makes me convinced is the price of oil. I don't think oil deserves to be where
it is because we are still at record stockpiles. But sometimes there is the way
you want things to be, (or expect them to be) and then there is the way things
are.
Anyway
- oil is up about 70% since it's lows? This is inflationary. It will just take a few months to work it's
way through. It took more than a year and a half for the decline in oil to work it's way through. And we'll probably start seeing it show up somewhere in Summer. The
dollar is less than 5 cents from it's high. I think it will move sideways. It
will take some very big circumstances to get it to go much stronger. I'm telling
you, inflation is now your dark shadow.
It
is exceedingly hard to make deflation in an advanced economy. It somewhat goes
against human nature. Inflation has been the norm about 80% of the time in
history. Deflation is the is the outlier. There is a ton of money buried in peoples back
yards. One day...... they are going to feel safe enough to dig it out. I think
that day is getting closer and closer. And if Trump were to win, I think
inflation could be a fire. This administration has suppressed people's natural
impulses for 8 years. I think there is going to be a be a mesmerizing snap back.
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