1- The inflation/deflation debate makes me uneasy. I find the topic is poorly understood.

Much of the discussion centers on either i) inflation as measured by CPI or PCE, or ii) inflation as measured by a paper currency’s purchasing power in relation to other paper currencies.
2- Inflation is a monetary phenomenon. Increase in MS = inflation. It always first manifests in capital markets, most noticeably in stocks. General prices of goods remain stable for a time, until something causes velocity to spike (like continued abuse of trust in the currency).
3- Too many ppl point to record-low velocity and rule out the possibility of inflation. These people ignore financial history at their own peril. Low AF velocity has preceded most hyperinflationary episodes (see e.g. Weimar).
4-Velocity is a psychological concept before an economic one. People cause velocity. And when they do, velocity could spike up violently and unexpectedly. I’ve paraphrased most of the above from @vol_christopher’s “Vol at World’s End”, and a quote he attaches in there by Parsson:
5- UBI is one potential tailwind for velocity. For now, ppl are thinking this helicopter money is a one-time thing. So they hoard it (and thus it has little effect on velocity). But they likely won’t hoard it if helicopter money turns into full-blown UBI...
6- Also, as lockdowns are lifted and the world returns to “normal”, much of the helicopter money that has been hoarded will likely be spent. Here’s Russel Napier on that:
7- So when someone says, “We’ve had no inflation despite QE & all” feel free to refer them to this thread. We’ve had tremendous inflation in stocks, bonds & real estate. By the time inflation gets picked up by CPI or PCE, you’ll know the End Game is near...
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