Inflation
Recession is now a virtual inevitability.
“This is a time of testing -- a testing not only of our capacity collectively to reach coherent and intelligent policies, but to stick with them.” -- Paul Volcker
Clients have concerns about inflation. Here are a few tips to approach these conversations.
"Wall Street wisdom is that QE is immensely powerful and is stoking financial bubbles. Academics say, 'I take your $100 bills, I give you back 10 $10 bills. Who cares?'"
“The first lesson is that central banks can and should take responsibility for delivering low and stable inflation,”
Demand destruction does not guarantee disinflation.
The inflation storm may have passed. But don't bet on it.
"The economic problem now is to control inflation and get to work on the supply side of the economy."
Paul Volcker restored the Fed's credibility through suffering. The Fed's leadership knows that it must pursue a similar course today.
Almost unique among serious finance books, Edward Chancellor’s The Price of Time serves well as bedtime reading.