Monthly Archives: June 2014

Inflation fears are wrong

  The Economist ran an excellent article today “The spontaneous combustion theory of inflation”.  I have been saying the same thing, that inflation is unlikely to be caused by Quantitative easing and the increase in the money supply attributed to QE is irrelevant to inflation and is actually deflationary as it hurts insurance companies and moderate income retirees who depend on bonds. As those parties experience less bond income they will switch to a less inflationary mode, so that is an example of a deflationary force. The economic recovery has clearly left the moderately skilled workers behind, where they now have lower real income than before the 2007 top and their real income is lower even going back 15 years.

2017-01-10T23:33:44-08:00June 26th, 2014|mayflowercapital blog|Comments Off on Inflation fears are wrong