Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

May 16, 2020 | Inflation–Deflation

Bob Hoye has been in investment business for some 50 years, making him one of the more experienced researchers. His historical work has been thorough providing the first recognition of the fascinating transition from speculation in commodities to speculation in financial assets. It was controversial when Bob observed that “No matter how much the Fed prints, stocks will outperform commodities”. In January 2000, the research team concluded that the Dot-Com Bubble would peak in March 2000. In early 2007, the team outlined that the credit markets would reverse in May-June 2007. They did and the stock market followed. The latest was the call in early October for the Bitcoin Bubble to complete in December. Bob’s essays and speeches on political change and on actual climate change have been widely circulated.

The government world of policymakers is confident that massive reflation by central bankers will restore the economy. Financial history says it may not work and the problem is that interventionist theories have not fully understood financial history. In the jargon of economics, perhaps the most misunderstood term is “inflation”. Indeed, it has been so chronically misunderstood that “they” must be paying people to deliberately not understand it. In one decade, such as the 1970s, when the cost of living was rising faster than take-home pay there was considerable social distress. Over the past 300 years there has been, in the senior economy, a number of such examples. Also, there have been periods when asset prices and wages deflate. Both trends have occurred whether the senior central bank was disciplined by a gold standard, or when allowed recklessness under a fiat currency.

Download (PDF, 230KB)

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

May 16th, 2020

Posted In: Charts and Markets - Bob Hoye

Post a Comment:

Your email address will not be published.

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.