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<blockquote data-quote="Arado" data-source="post: 1423974" data-attributes="member: 308"><p>I'm not sure if I follow the logic here - his point is that the Fed wants to pretend that there's inflation even though there isn't? Even he admits that if people see inflation coming then the 10yr treasury will sell off and rates will rise, putting pressure on asset prices. </p><p></p><p>The Fed does not want an inflation narrative to take hold because that will be dynamite for gold and bitcoin and will force the Fed to monetize all of the debt (as no one will want to hold treasuries with negative real yields). Bonds are in a hyperbubble with interest rates lower than they've been in hundreds of years and commodities are still at a historical low relative to real estate and stocks. If an inflation narrative were to take hold that would cause a stampede out of bonds. The powers at be continue to manipulate the CPI lower to make us ignore skyrocketing prices everywhere. There are still some folks in the deflation camp but none of them can point to cases of prices going down in areas that are actually relevant to cost of living - they point to commercial real estate and clothing as evidence even though these are stranded assets whose demand will likely never recover. Food, energy, healthcare, commodities, residential real estate are all essential and going way up. </p><p></p><p>If Fed wants to convince people of inflation, all they have to do is stop adjusting the CPI downward and they'll easily have 5+% inflation. </p><p></p><p>[MEDIA=twitter]1349881381971640321[/MEDIA]</p><p></p><p>[MEDIA=twitter]1349086563012063232[/MEDIA]</p><p></p><p>[MEDIA=twitter]1349440199701442561[/MEDIA]</p><p></p><p>[MEDIA=twitter]1349419662644289537[/MEDIA]</p></blockquote><p></p>
[QUOTE="Arado, post: 1423974, member: 308"] I'm not sure if I follow the logic here - his point is that the Fed wants to pretend that there's inflation even though there isn't? Even he admits that if people see inflation coming then the 10yr treasury will sell off and rates will rise, putting pressure on asset prices. The Fed does not want an inflation narrative to take hold because that will be dynamite for gold and bitcoin and will force the Fed to monetize all of the debt (as no one will want to hold treasuries with negative real yields). Bonds are in a hyperbubble with interest rates lower than they've been in hundreds of years and commodities are still at a historical low relative to real estate and stocks. If an inflation narrative were to take hold that would cause a stampede out of bonds. The powers at be continue to manipulate the CPI lower to make us ignore skyrocketing prices everywhere. There are still some folks in the deflation camp but none of them can point to cases of prices going down in areas that are actually relevant to cost of living - they point to commercial real estate and clothing as evidence even though these are stranded assets whose demand will likely never recover. Food, energy, healthcare, commodities, residential real estate are all essential and going way up. If Fed wants to convince people of inflation, all they have to do is stop adjusting the CPI downward and they'll easily have 5+% inflation. [MEDIA=twitter]1349881381971640321[/MEDIA] [MEDIA=twitter]1349086563012063232[/MEDIA] [MEDIA=twitter]1349440199701442561[/MEDIA] [MEDIA=twitter]1349419662644289537[/MEDIA] [/QUOTE]
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