Jul 29, 2021Liked by Joachim Klement

Great article, excellent insights. IMHO inflation is muted because all this monetary stimulus does NOT end up in the average person's bank account. It ends up in bank vaults, to be spent by a relatively few. To get inflation, govt workers will need more than the token 2% pay raises per year that they have been getting. Dityo for workers in private industry. the military, SS recipients, etc. Without $ in their individual bank accounts, the stimulus goes up in smoke--literally. Did you see the rocket launch with Bezos on it a couple of weeks ago? That is where the fiscal spending was burned up.

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Feb 24, 2021Liked by Joachim Klement

Thanks for the great articles. I appreciate how you're able to distill the data cocophany into the main themes.

There seems to be so much focus on inflation and a commodity supercycle at the moment. Do you think that the commodity supercycle talk is a result of so much focus on inflation concerns? If we don't see persistent inflation then does that mean that a big underpin of the commodity price frothiness disappears and there will be a pull-back to lower levels?


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I enjoy your writing but respectfully disagree with your outlook (but hey, that makes a market!).

Stanley Druckenmiller made the point years ago that QE was deflationary, not inflationary. But I think inflation is coming because of two reasons. First, fiscal policy in both the US and Europe has completely changed. MMT (and the simplified political version of free money) is now in vogue.

If another tea party retakes Congress in 2022 maybe the narrative shifts again but right now Biden is intent on ramming through a $1.9 trillion stimulus package plus some kind of massive infrastructure bill in H2 of this year.

Second, Baby Boomers had to delay retirement due to GFC but are now have either already retired or going to retire en-masses post-Covid (for a variety of reasons). I don't think any company is prepared for the labour crunch that is coming (sure robotics and AI will help, but that's 5-10 years down the road or more). Cheers!

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