Skip to comments.Pimco's El-Erian Warns Inflation to Hit US, Europe
Posted on 05/14/2010 7:06:48 PM PDT by TigerLikesRooster
Pimco's El-Erian Warns Inflation to Hit US, Europe
Friday, May 14, 2010 10:33 AM
Although price pressures are currently muted, the United States will get an uptick of inflation over the medium term, the world's biggest bond fund management company said on Thursday.
Extensive money printing by central banks to buy securities in emergency measures, such as those the European Central Bank recently announced to stabilize euro zone government bond markets, will ultimately stoke inflation, wrote Mohamed El-Erian, CEO and co-CIO of Pacific Investment Management Co., or Pimco, in a three- to five-year "Secular Outlook" summary.
"This potential evolution from disinflation to inflation will likely proceed at different speeds in different parts of the globe. It is already well in train in emerging economies and will remain so," El-Erian wrote.
This week, gold rose to a record above $1,240 an ounce on concerns about the European sovereign debt crisis.
Flight into gold can also reflect investors' concerns about the potential for paper currencies to depreciate because of central banks' money printing and worries that inflation could gain momentum.
(Excerpt) Read more at moneynews.com ...
Shouldn’t inflation lead to higher stock prices, at least initially?
From the article “state capitalism” aka Socialism. Just bring back the guillotine for the statists. The lying isn’t working anymore.
Flashy fiat-money mongers like El-Erian get the headlines when they say the obvious truth, yet at a slightly different time and in a different setting they would nod their heads in approval at the suggestion we can “stimulate” ourselves into prosperity.
In other words, he and most of his peers, not to mention the media types who interview them are all Keynesians. If any event should finally show that Emperor Keynes has never had any clothes.
It already did. Look at Dow Jones Index. Inflation will drive up commodity price, despite collapsing demand, because, at some point, money supply would be expanding at a lot faster rate than that of demand drop. Then inflation will spill over to real economy.
Better yet, look at the cost of food. Two years ago a can of corn was 58 cents, today that same can of corn is $1.26 in my local market. The true index of inflation is in your local market, not so much the stock market. IMHO
Won’t happen. Debt is deflationary. Home prices will continue to fall. Jobs will continue to be cut. Salaries will decline. Stocks will fall.
Deflation. The opposite of what “everyone” thinks will happen.
“state capitalism.” That translates into lower expectations for returns.
Meaning a debt-death spiral...
They can give the banks all the money they want, it will just sit there nobody wants it.
This is impossible because Helicopter Ben promised us.
Got the suit in the closet, but,,,,,,it seems to have shrunk a little, or maybe alot. Looks like mostly around the waist.
Yeah, that’ll happen! Now we just need to find one of those discos with the strobes, the mirrored ball, and the coloured lights in the dance floor!
All that should not be a problem. The real one might be finding a DJ with a turn table and lots of vinyl.
Let me know how it is going rounding up this stuff, I need to find my Geritol.
Wages are stagnant unless one works in mid and upper levels of goobermint.
One poster already references the cost increases of nearly 100% in 2 years for canned vegetables. It is the same here.
I guess it's all good as Zeewoe lost only another 440,000 jobs last month.
We’d better HOPE we’re just going back to mid-1970 prices on food under Carter. Some charts show current food prices matching the tough times of the 1700’s. *Eeek*
http://www.thepeoplehistory.com/70sfood.html (1970’s prices)
Don't worry. I am sure the latest price of flash memory sticks has gone down. It will offset the rise of canned vegetable price.:-) Such is the way economic stats come out.