'It's Going to Be Inflation Everywhere:' Deputy 'Doom'

Discussion in 'Economics' started by WallStWhizKid, Mar 10, 2010.

  1. 'It's Going to Be Inflation Everywhere:' Deputy 'Doom'
    | 10 Mar 2010 | 09:40 AM ET

    The global economy is entering a next "supercycle" phase that will generate inflation necessary for recovery, a strategist and protege of noted economist Nouriel Roubini told CNBC.

    Arun Motianey, director of fixed income strategy at Roubini's RBG Capital, said the supercycles feature periods of commodity booms followed by busts, and the US economy is on the verge of an inflationary period that will generate a sharp rise in prices.

    "We're heading into a world of inflation because we are highly indebted and we are indebted here in the US economy in the household sector and in the financial sector," said Motianey, author of the book "SuperCycles."

    Motianey said the inflation would likely drive up the prices of other US assets such as stocks. Central banks "have to start letting inflation into the system," he added.

    Roubini has gained notoriety as a "Dr. Doom" who predicted the beginning of the financial crisis in 2007.

    While Motianey's forecast was not as dour as those customary from his boss at RBG, he did say the times ahead in fact will be more challenging if the economy isn't able to create inflation and suffers deflation instead.

    "It's going to be inflation everywhere and it's going to happen really through the weakness of the US dollar," he said. "Then inflation in those other parts of the world that are expecting appreciating currencies, they're going to inflate as well because that's the way you ultimately correct this."

  2. I could be wrong, but wasn't Roubini calling for deflation last year? Or was that Faber? I get these jerk-offs mixed up all of the time.
  3. The dollar fell pretty far from 2002 all the way to 2008.

    Where was the inflation then?

    There are more sound explanations for the case of deflation than there are for inflation. In either case, I'll believe it when I see it.
  4. during the Depression, there was deflation - most stocks, most commodities, etc. went down a LOT. we have a lot of people without jobs.

    But these days, who knows???
  5. maxpi


    I just sped-read the article but I thought it said that "people owe a lot so there will be inflation"..

    If they owe a lot they can't spend as much, sellers have less pricing power and that would be anti-inflationary, no?

    I'm working on my hair, eyeglasses, beard, speaking voice and taking a continuing education course in Public Access TV Show Production so I can be a guru... I can do this shit, hold on for the next earth shaking prediction. I might write a book and become an expert on the George Noory Show and hit the Amazon number one list overnight while I'm at it, might as well milk it for all it's worth...
  6. With National Debt @100% of GDP and massive entitlements, the only way to avoid riots is inflate = monetize.

    Can you imagine the civil unrest if one day in the not too distant future, Congress slashed medicare, social security, welfare, unemployment, housing, defense and public service unions BY HALF. Or More?!???

    What happens when the FIRE economy (25% of GDP) gets thrown to the deflation wolves?!? That's another 10% GDP ripped from the 5-9% already cut from Government spending.

    We're talking Great Depression here, guys. And that doesn't even touch the debt service commitments with a rapidly shrinking tax base....

    Either way, we've got to run a surplus budget to pay off this wicked debt.

    How we get there is a Great Depression (1929 style), or Zimbabwe.

    What's easier?
  7. clacy


    You have a lot of alarmists calling for the end of the world due to either massive inflation or massive deflation. I guess that shouldn't shock anyone, as bad news sells.

    The inflationists could be right, or the deflationists might be.

    In my humble opinion, we might just get a slow asset price reflation, along with low consumer price inflation because it seems to me that Ben Bernake is actually **gasp** doing a pretty good job of walking the fine line with monetary policy.

    But what do I know? I don't happen believe that Ben is an evil puppet being controlled by the Rockefellers, NWO, Skull & Bones, Illuminati, etc.

    I think our bigger concern is whether or not out of control spending by Obama and the Democratic congress will force us to inflate.
  8. You don't get it. We've already passed the point of no return.

    You haven't done your homework.

    What would happen to the US economy if the budget was balanced tomorrow?
  9. How would that be accomplished... tax EVERYBODY 100% or slash government and entitlements by 40-50%?

    How would the people react?

    In other words.... we are on borrowed time... just until the rest of the world cries, "No Mas"...

    The ONLY correct path for US recovery includes (1) Slash government and entitlements 40-50%, (2) Slash tax rates.... Art Laffer says, "11.5% flat tax on both individuals and corporations is all it would take", and (3) broaden the tax base as much as possible. Without these things, the sand of our hour glass is rapidly being draining.

  10. bullshit it can be fixed tomorrow
    #10     Mar 10, 2010