Lyn’s Nov Newsletter is first class. It covers many topics from a technical discussion of the different measures of inflation to a political theory that comes pretty close to Marx’s ideas: Trends like this generally lead to rising populist politics on both the right and the left of the political spectrum (cracks in the system emerging from the pendulum swinging very far), as people sense that something isn’t working right with the established system, due to a problematic mix of political and corporate interests merging together into cronyism, but differ in what they think the root of the problem is and how to address it. The trend she is referring to is illustrated by this chart:
which I think explains a lot of recent political phenomena, such as Brexit.
Lyns general conclusions are pretty close to mine:
- we are going to see a lot more money creation in the next few years, whatever the Fed spokesmen say,
- consumer prices and prices of real assets are going to continue to rise,
- gold and precious metals will benefit from inflation,
- other commodities will also benefit, but to a lesser extent, especially copper and uranium and oil,
- the yield curve will continue to steepen,
- we’ll probably get more riots.
Risk on, but less so, after big wins on equities.