Monday, August 2, 2010

Taking credit on the "there will not be hyperinflation" call

Back in October 2009, I put out a debate arguing it is more likely to be "Japan style deflation" than hyperinflation in the medium term: "4) Japan again. Yes, compared to the size of GDP, Japan has "printed" much more money then the United States and have an even bigger public debt than United States. Meanwhile, Germany, Australia, UK, and many others have much bigger size of "external debt" as a % of their GDP then the United States as well. And yet they have not imploded to Zimbabwe style hyperinflation. In fact, when you examine the way the Fed and the U.S. Treasury is collaborating, so long as there is a willing buyer (the Fed) and there is a "preference" for low interests rate(for U.S. treasury to trim the interest bills), in our case, for both of the debt-ridden Japanese and U.S. government, the arrangement will be "stable": meaning BOJ and the Fed will keep on holding near zero interest rates on the one hand and soaking up any excess issues unsold to the open market/monetizing the public debts and as far as any one can see, and this can go on for quite some time as long as 1) holds, which was what has been happening in Japan for close to 2 decades now." http://globalmacrosport.blogspot.com/2009/10/why-hyperinflation-with-usd-is-probably.html

After more than half a year, investors have discovered for themselves that that is indeed the case despite it was the unpopular, counter-intuitive "platform" back then!



I suspect, that post (also available on Linkedin's discussions) even got Barack Obama's followers or the US President himself's attention as can be seen on my linkedin profile with "Viewers of this profile also viewed..." (you got to sign in to Linkedin to be able to see this curious phenomenon):
Barack Obama, President of the United States of America

Well global macro view does not only REQUIRE years of experience in the investment industry and a great education but a WIDE world view, ahem, like someone who has live experience in Europe, Asia and North America, ahem, kinda like the author of GMAAS (Global Macro As a Sport).
Share/Bookmark