Everything You Wanted to Know About Inflation

Published on
January 13th, 2021
Duration
60 minutes


Everything You Wanted to Know About Inflation

The Interview ·
Featuring Steven Van Metre and Michael Ashton

Published on: January 13th, 2021 • Duration: 60 minutes

Steven van Metre of Steven van Metre Financial interviews Michael Ashton, founder of Enduring Investments and a lifelong student of inflation—that famed economic phenomenon which pervades everyday life and yet is often difficult to truly understand. Ashton breaks down the Consumer Price Index, the most common measure of inflation, to its core, unscrambling its various inputs, evaluating its common criticisms (namely, that it fails to capture the magnitude of price increases in college tuition, healthcare, and housing), and comparing it to other alternative measures such as the Chapwood Index and ShadowStats.com. Van Metre, for his part, directs his gaze toward the macro issues such as the interplay between inflation and variables such as money supply growth, the velocity of money, and interest rates. Lastly, the pair look forward to see what inflationary (or, perhaps, deflationary) forces are on the horizon. Filmed on January 8, 2020. Key learnings: Ashton thinks that the Consumer Price Index is an imperfect metric but is nevertheless an optimal way to measure inflation. He argues that the extraordinary growth in money stock (induced by the Federal Reserve) will indeed augur inflation. Van Metre contends that various deflationary forces, namely the decrease in the velocity of money, will stop inflation in its tracks and could in fact bring deflation.

Comments

Transcript

  • JA
    John A.
    14 January 2021 @ 22:41
    19:00 "Money Velocity isn't going to go below 1" This is an assumption, and one which I think is going to be wrong. If money is concentrated in the hands of people who do not spend it, there is no reason for velocity to go up. We are at 1.2 now, and I believe other developed markets are worse than that. I liked the interview, he made some good points. But he needs to expand his imagination about what is and isn't possible.
    • MA
      Michael A.
      17 January 2021 @ 19:04
      Fair point. There's no reason velocity can't go below 1.0. It can't go below zero, but if suddenly the Fed added three zeroes to all bank accounts and prices didn't immediately respond, then velocity would drop to very nearly zero. You are right, I need to exercise my imagination more! What I guess I am thinking is that when you model velocity, it gets hard to make the model go much further than we are now, and really hard for it to stay there. But that could just mean there is a missing variable in the model. So what I SHOULD say is, 'I can't think of what the missing variable would be, that would make velocity react differently from the way that it has in the past." And even that isn't exactly true, because I can imagine nonlinear dynamics around zero. Freaky things happen around zero (https://mikeashton.wordpress.com/2016/02/23/wimpys-world/ ). Indeed, a couple of years ago we added a new variable to our velocity model to account for the amount of negative-yielding debt, which makes velocity behave differently at low Treasury yields than it would if these investments weren't available. So I accept your criticism, and appreciate the reminder!
  • VB
    Vikram B.
    15 January 2021 @ 03:40
    Did someone insert the Natural Gas chart instead of the Gasoline chart around the 10min mark??
    • MA
      Michael A.
      17 January 2021 @ 18:58
      yup. Here's the chart of gasoline. Not nearly as dramatic a picture, but accurate. :-) https://exchange.realvision.com/post/in-my-interview-the-editors-inserted-a-chart-of-natural-gas-rather-than-gas--600488a110c04262ea898d9b
  • SB
    Sebastian B.
    15 January 2021 @ 03:43
    Michael talks about the velocity of money being tied closely to interest rates and how when interest rates are high it encourages spending due to the opportunity loss of holding cash and the velocity of money rises. Conversely, when rates are low there is no penalty to holding cash and therefore spending drops and velocity in turn drops. I could be completely wrong but to me if feels like it should be the inverse. Would you not be encouraged to hold cash balances when you have high interest rates and be more willing to spend when rates are low due to cash being effectively yieldless due to low rates? When I look at the Fred and overlay the Fed Funds rate with the Velocity of M2 you do not see an increase in velocity during the early-80's Paul Volcker era. If anything velocity of money has dropped alongside this drop in interest rates. An expansion on this or any supporting charts/documents would be great. Thanks for the great interview, Seb
    • IW
      Ian W.
      17 January 2021 @ 13:58
      Agreed. I personally behave exactly the opposite and feel less bad about holding cash when interest rates are higher. But this of course depends on investment outlook. For example, going into 2020, I was heavily in cash because I did not see many opportunities and there seemed to be a lot of equity market risk. I didn’t feel so bad because I was making about 2 1/2% interest. Today, with interest at basically zero, I feel much more pressure to either invest or spend.
    • MA
      Michael A.
      17 January 2021 @ 18:48
      Cash earns zero. When interest rates are high, you're foregoing interest. So right now, your money sitting in checking is earning 0, but you COULD buy a 5-year Treasury note for 0.45%. In 2000, you were earning 0 in checking but you COULD buy a 5-year note for 6%. Don't know about you, but 6% sounds like it might be worth it, while right now I can't imagine tying up money for 5 years and getting a measly 45bps for it. That's the intuition. I think nowadays, since some checking accounts bear interest (at least, when interest rates are higher) and/or are associated with cash sweep features, people don't think of demand deposits as bearing no interest. But even those that bear SOME interest almost never bear very much, and the higher that the general level of interest rates gets, the wider this spread gets and the bigger the opportunity cost.
    • MA
      Michael A.
      17 January 2021 @ 18:53
      ...I didn't answer your second part, about the Volcker era. And you're right - prior to 1993, lots of things worked differently (that's why the Fed invented the dummy variable "inflation expectations became anchored", because there is an evident break in a lot of models in 1992-1993 between pre-1993 parameterizations and post-1993 parameterizations. I explain my hypothesis for this elsewhere). So you can't use ONLY interest rates to model velocity. In our model, we incorporate equity valuations (similar argument to interest rates - affects the opportunity cost of cash), a variable that describes the composition of M2 (how much is M1), and a financial-uncertainty measure which directly affects the precautionary demand for money. Good question.
  • AP
    Aneil P.
    15 January 2021 @ 04:39
    This is Idiotic: Housing has grown straight along with wages. Which tower does he live in? Housing is going up because of Feds purchasing Mortgage Backed Securities. The Fed's taking the bid away from me means I will end up taking a much bigger loan.
    • MA
      Michael A.
      17 January 2021 @ 18:40
      https://exchange.realvision.com/post/evidence-for-my-statement-that-home-prices-for-many-years-tracked-incomes-v--6004843e6b00cf5ad8bb1f4f Take a look at the chart I just posted on Exchange in Macro Chat. In the video I clearly say that housing is probably back in a bit of a bubble, and you can clearly see on the chart that since 2000, home prices have outstripped wages. I didn't claim otherwise.
  • RA
    Ralph A.
    15 January 2021 @ 17:37
    The hedonic adjustments are a scam. According to the hedonic adjustment, the quality of magazines has gone up 100% in the last 25 years? What technology improved the technology of a magazine?
    • MA
      Michael A.
      17 January 2021 @ 18:21
      Magazines aren't hedonically adjusted in the CPI. Only a small number of categories are. Housing, and some electronics stuff. And they basically offset since hedonic adjustment for housing raises the inflation rate by about the amount the hedonic adjustments elsewhere lower it. But nothing for magazines. As for hedonics generally, what's the alternative? If we just wanted to track the increase in spending, we'd just look at nominal spending and divide by output. If we are trying to measure the cost of a constant quality of living, though, then we have to measure what you GOT ("utility") for what you spent. I think the complaints about hedonics come down to people seeing their spending going up and thinking the CPI isn't capturing it. It just isn't capturing what people viscerally feel like it SHOULD be capturing.
  • AS
    Arjan S.
    15 January 2021 @ 23:03
    A $100k house in 1980 now being worth $3.6m is a stretch. But $100k 1980 houses going for $1.5m to $2m is definitely not an outlier occurrence in the Bay Area and Los Angeles. You can find them on Zillow all the time. That’s not a criticism of the video. Just a fun anecdote.
    • MA
      Michael A.
      17 January 2021 @ 18:16
      Sure, and you can also find $100k 1980 houses going for less than $100k in some places. Definitely a distribution! I wonder if that means you feel poorer if you're living in the $2mm house and wealthier if you're living in the $80k house? Probably not...lol. More seriously, I think what that says is that those houses are one one tail of the distribution, and probably highly unlikely to remain there for the NEXT 20 years. So they're probably singularly bad investments at this level, wouldn't you think? Don't really know, just musing!
  • EB
    Earl B.
    17 January 2021 @ 15:37
    Why do you show a historical price chart of natural gas when the narrative is about gasoline? apples and oranges!
    • MA
      Michael A.
      17 January 2021 @ 18:13
      Yes, editor error there. It makes a very powerful point, but not the one I was making!!!
  • JJ
    John J.
    17 January 2021 @ 17:26
    Steve is a fantastic interviewer and interprets the presentation in a very understandable way. Great job. Michael Aston offered a wealth of information on a very complicated subject.
  • DL
    D L.
    17 January 2021 @ 13:24
    This guy has a hard time saying things clearly and succinctly and the you add in derogative tones and giggling, hard to consider him an expert. Hardfast rule, if you cant explain things clearly and simply, you aren't an expert
  • MO
    Master O.
    13 January 2021 @ 07:59
    Fantastic discussion guys. Can you please verify whether the Chapwood index is equal or a weighted index. According to their website it is weighted and not equal. My two cents on the inflation/deflation debate: So many smart people take one side or the other. I don’t think it is a binary choice. One thing everyone agrees on is that we have artificially low interest rates and an excess of borrowed money at these low interest rates. In other words, there is an unnaturally large amount of liquidity sloshing around and much of it is in the form of borrowed money where the *monthly payment* is unnaturally low. When there is an oversupply of money it is easy to see how that would be inflationary. If there is $1000 in circulation one would expect prices to be higher than if there is $100 in circulation. Just more dollars chasing the same stuff. But here’s where that simple model does not actually work in reality. In reality, that excess money actually pushes prices down if certain conditions prevail. It depends on the scarcity of the thing in question, which Michael Saylor argues eloquently, as well as who in the supply/demand chain has access to the excess liquidity. During the last 12 years since the GFC the excess liquidity has not been distributed evenly. In determining whether you will see an inflationary or deflationary result, you need to look at (1) scarcity of the thing in question (specifically whether the excess money can increase supply) and (2) where the excess money resides (exactly where in the supply or demand chain). Excess borrowed money at artificially low rates will be deflationary if the excess money is used to increase the supply of a thing more than the excess money is used to purchase the thing. Oil seems to be a pretty good example of this phenomenon. The history of shale is one of excess liquidity on the supply side and a product, oil, that is not particularly scarce. During the period that easy money was being made available to drillers, the same easy money was not made available to consumers. Drillers (supply) were borrowing at very low interest rates while SUV drivers (demand) were borrowing on credit cards. So there was and is a deflationary effect in oil prices. Excess liquidity largely caused an increased supply of a non-scarce item and the excess liquidity was not largely on the demand side. You know when oil gets really scarce? When there is not enough capital to get it out of the ground. Elite college education provides the counterexample. Unlike oil, excess liquidity does not increase the supply of elite colleges. Moreover, the marginal demand for elite colleges does not come from credit card borrowers. The system provides ample liquidity to satisfy the demand side of the equation. Rich people from other countries want their kids to go to elite colleges. So the excess liquidity in the system is inflationary because the excess liquidity does not increase supply but it does give the demand side more chips to bid up the price of that non-scarce thing. I am interested in thoughts on this. What is going to happen when the excess liquidity gets sucked out of the system?
    • SM
      Sam M.
      13 January 2021 @ 08:35
      Shadowstats = boneheads = "a stupid person : numbskull." Please get Shadowstats on ... Raoul says we can't use such terms to describe the guests ourselves so let's have it out by letting the guy comment on this [] guy.
    • MA
      Michael A.
      13 January 2021 @ 16:02
      Their website says that it is a "weighted index based on price." What I believe that means (although I don't have their technical document) is that the basket started off equal-weight, but is now price-weighted since those prices have changed. An analogy is the Dow Jones, where the index is essentially price-weighted (bigger prices are weighted higher). Of course, that tends to exaggerate the influence of things that are going up because they also get to be higher weights. And it's not remotely similar to your own price experience, which is weighted by the total expenditure of EVERYTHING in your basket, not just the small frequently-purchased items.
    • JF
      Jonathan F.
      16 January 2021 @ 23:42
      I have had similar thoughts about excess liquidity causing deflation because it is flowing into the supply side, rather than the demand side. In particular, I think the emergence of so many zombie firms is a key proof of this. The supply that these "zombie" firms provide is only possible because liquidity is so abundant. If that liquidity dries up, even a little, these firms go bust, and their supply disappears. That leaves the remaining companies (their competitors) with the ability to raise prices. So, I wonder about where the breaking point is for zombie firms. Can they just keep on existing in perpetuity until the liquidity spigot gets turned off? Or, is there a point where they blow up despite an overabundance of liquidity flowing in the system?
    • JF
      Jonathan F.
      16 January 2021 @ 23:45
      Adding to my last comment about zombie firms. If there is a mass deleveraging, and these zombie firms go bankrupt, could that lead to an inflationary deleveraging? I know that in most circumstances, deleveraging is considered deflationary, because it means reduced spending. But, if the leverage went more into excess supply than into excess demand, then deleveraging could reduce supply and increase prices. Of course, there were still be some lost consumption due to job losses, I would think. But, I am curious to hear your thoughts on this subject.
  • JT
    John T.
    13 January 2021 @ 22:26
    For the Q&A, I'd be more interested in a discussion of where you expect inflation (or the lack thereof) by asset class. 1. Precious Metals 2. Base Metals 3. Energy 4. Farmland 5. Housing 6. CRE 7. Stocks - US, Developed, Emerging 8. Bonds - treasuries, investment, junk You get the idea, any asset class you think will be significantly affected from an investment framework.
    • JF
      Jonathan F.
      16 January 2021 @ 22:58
      To add to this question, since we know that real rates are a major determinant in the change in precious metals prices, for example, can you run through some scenarios that might help one better understand the coefficient between inflation and interest rates. In other words, if inflation increases by X, interest rates would increase by Y. The difference between the two would mark the impact to real interest rates, which would then effect the price of gold and other assets. To elaborate on my question further, what types of things cause change in inflation to run higher or lower than interest rates change? Is there a scenario in history (in the U.S. or elsewhere) where inflation spiked, but interest rates stayed low, causing a large negative impact on real interest rates? If so, what is the risk of something like that happening again? And what happened to asset prices, like precious metals, during that time?
  • DB
    Daniel B.
    16 January 2021 @ 21:36
    Great conversation, challenged some of the things i thought about inflation. I think this is the guy you need to talk to about hyperinflation in the follow up. How does it happen? Can it happen in US/UK? How did it happen in Venezuela? Thanks
  • TA
    Tom A.
    14 January 2021 @ 18:39
    One thing I have been thinking about and would be really interested to hear someone on RV discuss (Steve & Michael would be great) is the impact of wealth disparity on inflation. If every additional dollar created is making its way to Jeff Bezos and Elon Musk, what is that money going to be spent on vs. if that dollar was circulating amongst lower/middle income folks? More dollars chasing the same amount of goods and services is what creates inflation, and once you hit a certain level of wealth you stop spending every marginal dollars you make on basic necessities like groceries and instead save and invest it. Jeff Bezos can only consume so many calories. Is it possible that asset price inflation is simply a symptom of the growing share of wealth that is owned by the top 1% and the fact that more dollars are chasing the same amount of stocks/real estate/etc.?
    • MA
      Michael A.
      14 January 2021 @ 21:46
      That is a really interesting hypothesis...I don't know if anyone has examined the relationship between the Lorenz curve in a society and its relationship to money velocity. I'm not sure I'm the guy to do it but I would love to co-author it! Neat thought.
    • JY
      John Y.
      16 January 2021 @ 16:28
      and maybe measured and mapped relative to the Gini coefficient.
  • rm
    richard m.
    13 January 2021 @ 22:57
    Michael, you mentioned the difference between Japan going into deflation and the US likely not is that Japan's money growth was only 2% and the US money growth has been about 25% just this year according to M2. But, isn't the M1/2 misleading? Can't money outside of the M1/2 metrics find its way into the M1/2 metrics causing them to rise but really that money was already in circulation so it give the impression that money was created when it wasn't? Like you said, Fed creates reserves not money and can only impact the monetary base. Also, money supply doesn't take into consideration the eurodollar market where the most dollars are created and destroyed. Insight appreciated.
    • MA
      Michael A.
      14 January 2021 @ 21:39
      Well, obviously could make this a super long answer but in the interest of time: yes, M2 has a number of components, some of which move for reasons that aren't necessarily obvious (or dangerous). Example: when the money supply started booming early last year, a lot of it was because corporations drew on credit lines and held the balances in cash: basically forcing banks to lend because they were afraid their lines would be cut off. Huge drop in velocity because that was purely precautionary, and eventually as those lines are paid back that money disappears automatically. So there are various flavors of 'adjusted M2' you can look at that might be more accurate particularly at any given time. The bottom line right now is that they're ALL booming so it's not super important! But you're right, at some level the Fed can only create reserves and try to influence lending (making reserves pay a penalty rate, for example, would force banks to lend more, instead of paying interest on reserves as they did in 2009, which disincentivized lending). Of course in the extant case the Treasury dropped money directly into accounts, so we didn't need banks to lend. That's why M2 grew so much more quickly. And if there are ever central bank digital currencies, look out because then the Fed doesn't even need Congress to increase actual cash balances...
    • MH
      Madhushanka H.
      16 January 2021 @ 10:27
      I dont like the comparison of Japan MMT effort to US in the first place. Eurodollar market itself is the same point that this time it can be different compare to Japan. JPY is not the reserve currency of the world and majority of world trade is still denominated in USD.
  • JA
    Jordan A.
    14 January 2021 @ 03:33
    I'm a construction contractor and I've noticed more of a decline in quality of craftsmanship, and materials quality relative to price. For example: Houses used to be built with interlocking thick planks of fairly hard wood for flooring, they had all copper piping, bathtubs and shower stalls were heavy duty metal or fiberglass, sheathing was plywood, appliances were heavy duty, and now the floors are cheap osb, the piping is plastic, bath tubs and shower stalls are acrylic, sheathing is also typically osb and appliances are flimsy. All much cheaper less durable and yet that doesn't show up in the price of a house. It's not like we are paying more over all. We're paying the same for a whole lot less.
    • SR
      Steve R.
      14 January 2021 @ 10:02
      Its the same in the UK. Cheap materials and very shoddy workmanship. Houses are literally thrown together, everything is the cheapest possible. Nothing is designed to last. No one in their right mind would ever buy a New Build property in the UK, total rip off and full of faults as long as you arm - and they are the good ones. Buyer beware!
    • DS
      Dan S.
      14 January 2021 @ 13:07
      Even nice cars have cheap plastics in non-touch areas now. You can no longer sit on the hood of your car without denting it!
    • dw
      douglas w.
      15 January 2021 @ 20:17
      Completely agree and enjoy your insights as a contractor. In LA the exuberance and increase in property values has only been exacerbated by Covid to the upside, as people get their home/work office lives situated. As we have reached a plateau in the cycle as interest rates are at the lower bound, the marginal price increase in housing is capped, developers must now resort to cheaper construction methods to keep a similar profit margin. QE infinity will continue to support real asset prices until something breaks.
  • PK
    Prafulla K.
    15 January 2021 @ 20:08
    @steven would love to know the effect of inflation and deflation on Bitcoin/gold in current environment
  • CU
    Christian U.
    15 January 2021 @ 14:16
    fantastic video. please more of this and can we next time add a few charts or graphs to make it all a bit more tangible. Thank you
  • JL
    J L.
    13 January 2021 @ 19:06
    It's a bit surprising a wide-ranging discussion of inflation does not discuss the distinctly different types of inflation. Asset price inflation is different from wage inflation, for example, which is different from goods and services inflation, whic iis different from commodity price inflation. These distinctions can matter a lot depending on the circumstances. The regime from 2009-2017 could be characterized as loose monetary policy with tight fiscal policy, for example, which is a recipe for asset price inflation with constrained wage growth. Policies that restrain wages can boost corporate profits, leading to asset price inflation, whereas policies that explicitly lead to wage price inflation (higher minimum wages etc) can have the inverse impact on asset prices (via lower corporate profits). One could also argue, clearly, that low interest rates are inflationary for asset prices — if not other types of assets — because of the way they favor long duration investments and allow valuation multiples to expand. Low interest rates can also inflate asset prices by providing cheap funding for Silicon Valley and speculative ventures (witness the SPAC boom). On another note, the description of MMT was rather unprofessional. It would be better to criticize the actual, intelligent case for MMT, than to present a cartoon version of MMT that is neither accurate nor fair. The basic premise of MMT is that, for a government with sovereign monetary policy (meaning one that issues debt in its own currency), undesirable inflation is the main policy constraint. This can include any type of undesirable inflation, in whatever form. So MMT, in realistic terms, at no point says a government can spend with abandon. Instead it says that inflation is the true policy constraint, and that undesirable inflation is thus the thing to monitor and watch out for. From that starting point, MMT believes in using creative fiscal policy to influence economic outcomes more than monetary policy. In order to prevent a regional housing bubble, for example, MMT might advise putting a cap on the size of mortgage loans linked to some multiple of annual rent equivalence. That way, if you want to pay more than a reasonable band of market value for a house, you can do so with cash but not with borrowing. Or MMT might alternatively see the benefit of adding targeted stimulus to one depressed region of an economy, but not another, and so on. The broader point is that MMT is neither crazy nor simplistic. It is actually very well thought out. You can disagree with their assumptions regarding the efficacy of government policy, but the theory understands the plumbing of how the system actually works and takes constraints seriously. It just advises focusing on undesirable forms of inflation as the real constraint, as opposed to, say, debt-to-GDP rules of thumb that aren't necessarily grounded in logical theory. It's also very ham-handed to say "Oh Japan tried MMT" and it didn't work. That's like saying you have a friend who tried the paleo diet to lose weight and it didn't work. Okay, he tried the diet. But what did he do specifically? What are the specific structural issues in Japan's economy? What did they target and what did they not? And so on. It was interesting, and refreshing, to hear him give a forecast for inflation in 2021 based on the increased quantity of the money supply and the potential for accelerating monetary velocity. But I would call this statement so simplistic as to be more wrong than right: "The main thing that drives money velocity turns out to be interest rates, and there is uncertainty and various other things, but the main thing is interest rates." Yeah, no. That isn't true. The main thing that drives monetary velocity is a desire to lend and spend — lending on the part of the banks, and spending on the part of consumers and small businesses (or the government, depending on where the spending goes). You can have a low interest rate environment where monetary velocity is high if, say, an economic recovery is underway, and animal spirits have returned, but the central bank has not yet raised rates meaningfully because they want the recovery to build a head of steam. Meanwhile, you can have a HIGH interest rate environment where monetary velocity is high if, say, it is near the tail end of a boom and a sense of euphoria reins in keeping with the bullish state of markets and the economy, at which point interest rates have been rising but animal spirits are out front. We can also play the game in reverse. Monetary velocity can be low, in an environment where interest rates are low, if some kind of financial shock has taken place and consumers and corporations are shell-shocked, or otherwise indebted and reining in their horns. Or monetary velocity can be low in an environment where interest rates are high, if, say, the impact of policy tightening from the central bank has started to work, market valuations have gotten too high, and the boom has petered out to the point where caution is creeping back in. Point being, lending and spending is what drives velocity, not interest rates. The interest rate impact is like the dog that follows its master on a leash, sometimes running ahead and sometimes running behind. Last but not least, it was good to see him push back hard on the whole dollar insolvency thing. With each passing day it becomes harder to see that scenario coming to pass. The Federal Reserve will not be shy about continuing to support the market in creative ways, and the Biden administration is about to open the floodgates. Then, too, companies with strong balance sheets will be itching to expand operations in a post-Covid environment where small business extinction has created juicy opportunities for national chains to expand, and banks will be eager to lend some of their massive reserve pile to those corprations in a new expansion phase. This is not an environment in which to expect doom and gloom related to stingy policy responses.
    • JL
      J L.
      13 January 2021 @ 19:09
      * if not other types of inflation rather * consumers and the private sector (not just small businesses)
    • DS
      Dan S.
      14 January 2021 @ 13:13
      The models are flawed since banking is not included. Banking Heath is assumed though that is where most money is created and destroyed.
    • CB
      C B.
      15 January 2021 @ 00:35
      Insightful comments JL. I would be curious to know your forecast for inflation (or deflation), if you have one.
    • JL
      J L.
      15 January 2021 @ 11:08
      @ CB Well, I don't really believe in single-path forecasts. It's better to stay cognizant of a range of possible outcomes. But if I had to create a snapshot of the moment, it would be something like "ongoing asset price inflation, plus signs of real economic recovery, with investors and speculators pushing the envelope until something breaks." Highly speculative investments are white hot right now. That forecast could continue with the arrival of more fiscal stimulus, much of which could go directly into stocks. Those who don't need the stimulus checks will be tempted to invest (or gamble), and those who do in fact need the checks will be likely to spend the money quickly on necessities, adding to monetary velocity. Then, too, a lot of SPAC deals will be releasing cash in search of acquisition targets on a timeline. This means signs of real spending and the hot money crowd continuing to go wild. It also looks like the dollar should continue to weaken, because the size and scope of U.S. stimulus should dwarf that of Europe and Japan, and investors are meanwhile getting excited about emerging markets again. Goldman is even forecasting a new commodity supercycle, which would create a reinforcing feedback loop that favors dollar outflows (global rebalancing out of dollar-denominated assets, EM assets benefiting from higher revenues for commodity exports, EM bullishness accelerating flows out of USD, repeat). So I would anticipate ongoing asset price inflation, and signs that the reflation trade is working, and ongoing US dollar divestiture, with a Democrat-controlled legislature also visible pushing pro wage and labor policies that could potentially reverse wage deflation, or decelerate it. Asset price inflation + commodity price inflation + rotation into EM assets and ongoing dominance of white hot speculation plays (SPACs, IPOs, meme stocks etc) + anticipation of higher wage and labor costs (a reversing of wage deflation, or at least a stalling of it). All of this then goes on until it can't anymore because either 1) the Federal Reserve is forced to act meaningfully as a counterweight to inflation pressures or 2) the hot areas of the U.S. equity market extend so far and so high they are in the stratosphere at the point they simply run out of fuel, at which point a critical mass of speculative plays will be ripe for burning up on re-entry.
  • FL
    Fabrizio L.
    15 January 2021 @ 09:31
    So interesting. Using the example of college student wages coming out of college over 30 years. I hear it. How much did it cost to go to college 30 years ago? how much does it cost today? How affordable was college 30 years ago and how affordable is it now? So if the input cost has increased hundreds of percent and the output is constant how does that get explained? thanks.
  • RH
    Ron H.
    15 January 2021 @ 05:32
    I would like to hear a discussion around questions like a structurally-altered rate of savings. It is simply intuitive that trauma, economic depression, and uncertainty is likely to change psychology in a fundamental way. These are the words, in their acute senses, that I would use to describe the current situation for many if not most people, and they are relevant in a low-boil sense to the past 12 years as well. Will the US savings rate increase and converge toward that of the rest of the developed world, or to its long term average (which is several pct. points higher)? Might it even overshoot these means? If not, why not? I noticed that the personal savings rate reset structurally higher with the shock of 2008, as compared to the prior decade. Will it do so again for an extended period? Additionally, an intuitive argument can be made that the unprecedented asset price inflation will suck in more and more dollars that otherwise would be consumed, as more and more people see the ladder of economic mobility being pulled up out of their reach. These dynamics, which are largely unknown, are capable of driving future inflation numbers as much as M2 growth (especially M2 aggregated without regard to its distribution).
  • AP
    Aneil P.
    15 January 2021 @ 04:47
    I'm Sorry, CPI is indeed fraudulent. You guys have been drinking the Gov. Koolaid! In 1983, the government CPI rose roughly 12% and the government modified the CPI calculation to save money. In order to save money on salary increases and entitlement benefits, which are tied to CPI, the government changed their calculation of the CPI to reflect a much lower number. The statistic underwent another reconfiguration in 1995/96 with the Boskin Commission. These changes made the CPI an even worse indication of the real cost of living increase. It is estimated that between 1996 and 2006, this reconfiguration of the CPI saved the US government over $680 billion. Since then, the government has been artificially deflating the CPI to keep figures as low as possible. The readings you see published today no longer represent the real out of pocket expenditures incurred by most Americans. The government’s baseline CPI measure excludes items such as taxes, energy, and food; which are not only necessities, but also often a majority of our daily expenditures. The CPI increase from 2008-2012 was a total of 10.2%, but our research has found that for many cities, the cost of living increase was more than that in 2012 alone. The increase was slightly more in 2013. As an unintended conclusion, we realized that people were relying on the CPI as a benchmark to beat in order to keep up with their costs of living. In reality, if people were keeping up with CPI, they really were falling behind because the government index isn’t appropriately reflecting their cost of living increase. This is the negative result of the 30 years of CPI manipulation by the government in an effort to keep government entitlement increases to a minimum. The Chapwood Index is our attempt to help people understand why they feel like they aren’t keeping up and why, as they get older, they feel as though their money does not go as far – even when they’re following the rules, working hard and supposedly beating inflation. I go with Chapwood index over this Joker's proclaimed expertise, calling himself "nerd", indicating "expertise".
  • PT
    Pradeep T.
    15 January 2021 @ 03:49
    Very good interview; I now understand how inflation is measured from a high level perspective and the controversies around the basket items. thanks.
  • MC
    Mark C.
    15 January 2021 @ 03:07
    Great interview. Looking forward to follow up. I recall that 80% of the $600 did make it into the economy. Which is different from what I understood you were saying. And essentially we had no inflation. Is that attributed to energy? Housing: I saw the data on rents decreasing. As someone who is looking at this regularly in my area I am not seeing this because basically there is little rental inventory available in Suburbia/Rural areas. But my thesis is that once eviction moratorium is over and forebearance is nearly over inventory increases and puts downward pressure on housing. It seems quite likely that with jobless numbers increasing we are quite possibly double dipping...wouldn't this lead to strong dollar and as well much lower CPI? MMT seems to me actually how the system works and has worked. The "MMTers" perhaps want to spend like crazy and feel debt doesn't matter... is that your issue with MMT? or is it in the description of Mechanics/Process of how the system works? Cheers.
  • HF
    Hon F.
    14 January 2021 @ 21:12
    Thank you for this interesting conversation (even though I haven't understood everything). I have three questions: 1) How does debt fit into the inflation narrative? If people use the stimulus to pay off debt rather than purchasing more goods or services, would that still result in inflation? Every one seems to be concerned about the increasing debt levels, but nobody seems to think that this will impact spending behaviour. 2) If the dollar keeps losing value, won't other countries at some point try to get rid of dollar-denominated credit assets? If so, would that also contribute to inflation? 3) Will inflation eventually reach an equilibrium across countries or will it stay higher / lower in certain countries? If so, how would that impact the trade relations?
    • MA
      Michael A.
      14 January 2021 @ 21:59
      My 10c answers: 1. Paying off debt gives the money to someone else, who then spends or saves it. So it doesn't really change the bottom line, unless it goes to someone with a greater propensity to save. Now, if you pay off bank debt and the bank doesn't extend that credit to someone else, then money has been destroyed and that's M2 contraction. A lot of these questions boil down to money/balances being passed around, not created or destroyed. So I don't think this changes a lot, at the margin. 2. The question of other countries selling dollars/dollar assets is a similar question. They have to sell it TO someone, so the total amount of money/credit is the same, just in different hands. By exiting a particular market the relative values can change of course. So if China sold all of its credit assets, interest rates would be higher...but then they would hold dollars. So what do they do with the dollars? If they sell the dollars, then the FX rate will decline but the person who has the dollars then needs to invest them. Maybe he buys credit? Or, China can buy US goods with those dollars instead, which pushes up prices perhaps. But this all changes the distribution of things, more than the absolute level. 3. The only way you'd get a stable equilibrium is if all countries also expanded their money supplies at the same rate. If one country expands faster than another, then there is more of currency "A" than currency "B" and the exchange rate between A and B changes (specifically "A" should cheapen, just like if there is a bumper crop of corn and a bad crop of beans, the price of corn should fall relative to beans. Same deal). In that case, country A will have a higher rate of inflation than country B, around some common general inflation level.
  • WB
    Wotan B.
    14 January 2021 @ 21:52
    07:52 - Good laugh. :D
  • AL
    Aaron L.
    14 January 2021 @ 08:37
    Please make this guy a regular! Let him nerd out about inflation as much as he wants, I and many others want to hear what he has to say and go to a deeper level. Thanks
    • SV
      Steven V. | Contributor
      14 January 2021 @ 16:41
      I hope Mike will become a regular! I wanted to introduce him to the RV family by doing a broad-based interview before he really nerds outs and goes down the rabbit hole of inflation.
    • MA
      Michael A.
      14 January 2021 @ 21:43
      How deep are you willing to go???? We can get pretty nerdy. But if I mention a Laspeyres index then stop me because there's no coming back after that...
  • SL
    Shawn L.
    14 January 2021 @ 05:24
    I looked up the paper Micheal mentioned he wrote concerning the inflation "feels like" indicator that closely tracks Gold and found it was a free download. Here is the link to this paper. https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1701806_code1526450.pdf?abstractid=1661941&mirid=1 It was not in the NABE journal he mentioned, but I located it in the SSRN journal. I have not read the entire article yet, but the synopsis tracks with what he mentioned. It would be nice to have confirmation on this for accuracy.
    • SL
      Shawn L.
      14 January 2021 @ 05:38
      Also, here is an interesting piece comparing S&P500 vs inflation YoY-10yr and you can see interesting outcomes regarding real rates of return. https://inflationdata.com/articles/2012/01/21/inflation-stock-market-correlation/ So, if serious inflation is coming in 2021 and productivity / growth does not increase at a similar or better "serious" pace, we could see a negative real rate of return on stocks and have to pay taxes on these phantom returns to cap it off. A pendulum swings both ways before slowing down right?
    • MA
      Michael A.
      14 January 2021 @ 21:42
      "Business Economics" is the NABE journal, but yes that's the right link. Search the title and you will find other links too: e.g., https://link.springer.com/article/10.1057/be.2011.35 Thanks for posting!
  • GA
    Gerald A.
    14 January 2021 @ 16:36
    Two guys justifying the financial repression and suppression of working people by defending the moneychangers and governments ludicrous definitions of (and narratives about) inflation. Consumer prices are a ridiculous way to measure inflation. It is a prima facie deception not to include asset prices (and labour prices) in the measurement of inflation. It is the big lie of the moneychangers and their useful idiots. This video should be titled "Everything you wanted to know about consumer prices." and NOT "Everything you wanted to know about inflation." That is the essence of the big lie.
    • TA
      Tom A.
      14 January 2021 @ 19:06
      Michael was defending the calculation of CPI while also pointing out its shortfalls. There was no discussion on the ethics of inflation.
  • LJ
    Lynn J.
    14 January 2021 @ 18:24
    An increasing supply of money over the growth of economy/GDP will cause inflation. However, since 2008, continuously QE/money printing did not generate inflation. The basic wage/salary is increased a bit and hightech section salary is increased a lot, there is no much wages/salaries increased in other sections. The goods/service price is little changed, or say lowered due to the technology development. No idea if there is an equilibrium for money supply, inflation, tech development and unemployment.
  • dw
    douglas w.
    13 January 2021 @ 18:18
    I oversaw the development of a number of retail stores and during a growth phase hired a team 100+ people at competitive wages in relation to their position. I left the field a few years ago and recently was speaking with someone still with the company and they are paying employees the EXACT same salaries, and in some cases less, than what I paid the same employees 10 Years ago. As the dollar is certainly worth less than it was a decade ago the fact that there is ZERO wage inflation for large majority of workers in retail/hospitality jobs, really adds to the deflationary forces that are already in play. You don't need cpi inflation to increase, you just have wage inflation stagnating and after a few years you are unable to keep up with your standard of living.
    • dw
      douglas w.
      13 January 2021 @ 18:26
      I look at inflation in baskets, consumer price inflation, asset inflation, financial inflation. Not going to argue with cpi (although with commodities/grains/soybeans ripping lately we may finally begin to feel it in the products we purchase). Asset inflation - I live in LA and a modest small house 1000sq ft or a 2bdrm condo in a convenient centralized neighborhood is million + dollars. Stock market at ath and btc probably headed to 100k+ this year. So, I can't stop seeing inflation.
    • JL
      J L.
      14 January 2021 @ 03:25
      One could also argue that tech deflation = wage deflation. By that meaning, technology is deflationary because it increases efficiency, lowers the cost of inputs and production, and removes the need for human labor at the margins. The tech deflation thesis means wages for human labor, on average, should go down over time. Technology means fewer humans required, and less human skill differential required, for a vast range of jobs. But that's an important distinction because the tech deflation thesis does not depend on a weaker currency. You could have a scenario where wage deflation is occurring (because of tech) even if the currency has retained its value or gotten stronger.
    • DS
      Dan S.
      14 January 2021 @ 16:35
      The average wage earner can no longer support a nuclear family on one wage. Two parents working is usually needed and that's detrimental to child development.
  • ES
    Edward S.
    13 January 2021 @ 20:56
    Follow up question: Mike's thoughts on the cause of inflation in the 1970's and early 1980's? Steve: I thought the interview was great. Very well constructed and executed.
    • DS
      Dan S.
      14 January 2021 @ 13:11
      End of Bretton Woods System of Money and consequent mayhem in oil market.
  • CD
    Carl D.
    14 January 2021 @ 04:52
    maybe I'm a fool but after watching hundreds of videos on fed policy I never realized we didn't have a spike in M2 growth post GFC. Everyone focuses on central bank balance sheets but maybe that's irrelevant for predicting inflation, showing low m2 growth in Japan lit a lightbulb for me, bank reserves aren't money! And the recent M2 spike really does make this time different
    • DS
      Dan S.
      14 January 2021 @ 13:06
      Fed is financing the stock market. Vendor Finance always ends badly.
  • DS
    Dan S.
    14 January 2021 @ 12:52
    There is much more credit today versus 1982. Credit has substituted for income. For example in 1982 in USA it was not uncommon to pay for college out of pocket. So I would not call SS boneheaded ,but it has it own problems. Government has an incentive to lowball inflation to keep promised benefit costs controllable.
  • JP
    John P.
    14 January 2021 @ 10:35
    the most useful and insightful piece on Macro of the last few months. A real dark horse- nearly didnt watch it.
  • SL
    Shawn L.
    14 January 2021 @ 05:40
    Excellent as always Steve and keep bringing him back. Smart guy Thanks!
  • MH
    Martin H.
    14 January 2021 @ 03:15
    As per normal they bastardize the term inflation and totally muddie the waters and create a complete misunderstanding of the topic!
    • SL
      Shawn L.
      14 January 2021 @ 05:20
      Please elaborate. What does the term inflation mean and what was misunderstood?
  • AB
    Amarildo B.
    13 January 2021 @ 22:26
    If you are a worker you see inflation in everything, but can't do anything about it but if you are a econom specialist on inflation and live under a Rock 🥌 than shure A's hell 🤪 you can't see 🙈 lnflation !!!
  • HD
    Henry D.
    13 January 2021 @ 21:38
    From this very helpful discussion I have the idea that we can fairly accurately determine where inflation currently is, but there was not really an indication of the accuracy of where inflation will be in the future. Is there a chart or model of world dollar creation and flow including dollar like derivatives from treasuries to eurodollars maybe weighted on their liquidity, because obviously the Fed's mandate doesn't allow it to "print" dollars and while the government spending is large I suspect, though have no idea, that it is trivial to the dollar denominated instruments that banks and non bank lending institutions create around the world. This seems to be a valid critique of the Feds operation, and that of proposed MMT, that the Fed can influence "dollar" creation and destruction, but it doesn't have control over it and it is not even clear with a quadrillion? or so dollar denominated derivatives where or with whom that control actually is located. Thus it seems that the Fed and government spending can influence the expectation of inflation, which certainly at the moment seems to have an influence in the stock market, not so much with bonds, I'm just a retired high school teacher so I would love someone with an actual understanding of the system to help clarify at least the critical elements to watch. It is obvious even to me it is not what the Fed says as there is little to no correlation to that and actual growth or inflation in the past.
  • BR
    Bret R.
    13 January 2021 @ 17:16
    As to the statement "the penalty for holding money at zero percent interest rates is zero", Doesn't this ignore inflation? If the Fed is artificially suppressing interest rates to zero and the CPI is at say 2% then the real inflation rate is -2%. In that situation the penalty for holding cash (as compared to gold) is -2% per annum.
    • JL
      J L.
      13 January 2021 @ 19:51
      His statement was off base on multiple levels: -- monetary velocity and purchasing power are two different things -- opportunity cost and currency depreciation can incur huge penalties -- a nominal rate of zero doesn't tell you what the real rate is He seems to imply there is a fixed connection between the prevailing interest rate and monetary velocity. There is not. The variables are independent based on what is happening in the economy. You can have high velocity with low interest rates, or low velocity with high interest rates, or high with high and low with low -- all the combinations of a 2x2 matrix -- depending on where things are in the cycle and what just happened (e.g. start of a boom, tail end of a boom, aftermath of a financial crisis, etc). He also seems to ignore purchasing power. If you are sitting in cash and your purchasing power is being eroded because all manner of prices are rising, and you are missing out on asset price appreciation that could have protected you, you are paying a big penalty. If the currency's value is depreciating rapidly, maybe you are getting killed. There are many scenarios where monetary velocity is not the driver for purchasing price erosion. He also neglects to recognize that the nominal yield (interest rate) doesn't have to mean anything because the Fed can use financial repression tools. If the nominal yield is zero, so what -- the real yield could be anywhere at that point, depending on inflationary or deflationary impacts. The real yield is just the nominal yield minus inflation (or plus deflation). So if inflation is higher than the nominal yield, the real yield is negative (e.g. 0% interest rate and 5% inflation = real yield of minus 5%).
    • MA
      Michael A.
      13 January 2021 @ 21:26
      Other commenters also brought this up. You're right, there's a penalty to holding cash. But what I meant was that the penalty to holding cash (at 0% nominal yield) relative to other investments where you can earn 0%, is zero. So why buy a bond or CD when you can hold cash and earn the same? Ergo, more money sits in cash. From Q1 1992 through Q1 2020, the correlation between the level of M2 velocity and the level of the 5y Treasury rate has been 0.86. There are other factors - especially now - but the level of interest rates explains a huge amount of the variation in money velocity. Samuel Reynard at the SNB wrote a nice paper a few years ago tying in the feedback loop: https://www.piie.com/publications/working-papers/assessing-potential-inflation-consequences-qe-after-financial-crises
  • MQ
    Michael Q.
    13 January 2021 @ 16:51
    I feel that an overall inflation number, whilst great for economists and governments doesn't actually help to define actual inflation that is felt by people. Why aren't we starting to track inflation against quintile earning groups? This would provide an ability to taget inflation protection for the people it hurts the most. For example the bottom two quintiles of earners barely moving their disposable income totals in the last 50 years, whereas the cost of living has dramatically increased in that time. According to the previous Pew Research study “In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago, and what wage gains there have been have mostly flowed to the highest-paid tier of workers.” So affectively the lowest earners have experienced a greatly disproportionate amount of inflation against their increase in wages over the last 40 years. Adding even more detailed breakdown to highlight the differences there was a WSJ article that talked about “The median net worth of households in the middle 20% of income rose 4% in inflation-adjusted terms to $81,900 between 1989 and 2016, the latest available data. For households in the top 20%, median net worth more than doubled to $811,860. And for the top 1%, the increase was 178% to $11,206,000.”
    • MA
      Michael A.
      13 January 2021 @ 21:17
      Definitely true that inflation hurts those at the bottom the most. Of course, those bottom quintiles aren't all the same people (college students, e.g., tend to be there and then exit those quintiles) so the bigger issue quantitatively is that their consumption baskets change a lot as they move from the bottom quintile to the middle. That's one reason that lots of people feel inflation is higher than it objectively is: they're experiencing the move to a higher standard of living quintile which means a "nicer" basket at the same time that the basket itself is getting more expensive.
  • BR
    Bret R.
    13 January 2021 @ 16:15
    I liked how you discussed the price of gasoline declining then showed a chart of natural gas declining.
    • MA
      Michael A.
      13 January 2021 @ 21:14
      Oh wow! I just watched the recording and you're right. Wrong gas! I promise I didn't do that. I was talking about gasoline: $3 in 2007 and $2.25 now. Good catch!
  • HH
    HODL H.
    13 January 2021 @ 19:17
    I’m only 44 minutes left but does he talk about ACY inflation index?
  • BE
    Brett E.
    13 January 2021 @ 15:33
    I found it very interesting when the guest commented on low interest rates being deflationary. Paul Volker crushed inflation with high interest rates. Can you explain the dichotomy? Thanks.
    • MA
      Michael A.
      13 January 2021 @ 16:11
      Great question. Volcker raised rates, but it's HOW he raised rates that matters: he restrained money growth, and that caused interest rates to rise. The short-run effect is higher interest rates and velocity, but the long-term effect is lower inflation because of slower money growth. However, these days the Fed doesn't control interest rates by changing the quantity of reserves. They used to - every day you'd wait for the 11:30 open market operation to tell you if the Desk was adding reserves (system repos) or draining them (matched sales, aka reverse repo), and that's what controlled the overnight rate. But they don't do that any more. The Fed just moves rates by telling everyone where they should be. So these two things are divorced in a pretty dangerous way. I say again, great question.
    • rm
      richard m.
      13 January 2021 @ 18:23
      You're describing the interest rate fallacy that high rates means money is tight and low rates mean money is loose. History tells us the opposite is true, including the inflationary 70s.
  • MB
    Muhammed B.
    13 January 2021 @ 16:25
    I felt like he took the other side of Steve’s thesis? Which is good, but like he said we just scratched the surface. New CPI data keeps going down ?
    • SV
      Steven V. | Contributor
      13 January 2021 @ 17:02
      This interview wasn't about my thesis but about Mike's view. I agree, we just scratched the surface of his knowledge!
  • MJ
    Marc J.
    13 January 2021 @ 08:44
    Great interview Steve, thanks.I'm going to have to watch this again but I think Michael said 'stimuls' cheques will cause inflation / have caused inflation, partially changing my opinion. So, is it fair to say that 'stimulus' cheques will cause / is causing inflation but only in certain areas of the economy? If so, which areas, or are we already seeing this?
    • MA
      Michael A.
      13 January 2021 @ 16:16
      Check out core goods inflation vs. core services inflation! This month, core goods inflation rose above core services for the first time in a decade. When you get your stimulus check, you don't run out and buy an accountant, you go out and buy a jacuzzi!
  • ME
    Mark E.
    13 January 2021 @ 15:32
    There is a penalty for holding cash when rates are zero, and that is inflation. Even at 1.2-1.4% inflation pa, there's still a penalty for holding cash. PS. Steve, you're a nice guy but I can't believe you let your guest get away with saying multiple times that the Fed is printing money. You continually say on your YouTube channel that the Fed can't do that, right?
    • MA
      Michael A.
      13 January 2021 @ 16:14
      There is a penalty for holding cash, but the penalty is less when interest rates are at 1% than when interest rates are at 4%, no? The Fed doesn't "print" money; only the Treasury can do that (at least until Central Bank Digital Currencies are a thing). But we use that as shorthand for creating reserves, and the Fed can do that without constraint except inasmuch as the Congress holds them to account. And historically, the Congress is much more likely to get annoyed when the Fed is being tight than when it is loose! But you're right, this isn't "printing" per se. Just me being loose with my language.
  • CB
    C B.
    13 January 2021 @ 15:38
    Can you comment on the two statements below: Many inflation watchers believe that to be sustained, we need to see inflation in wages. This seems unlikely in the short run given unemployment levels, but might be an issue longer term if we continue to de-globalize and bring more manufacturing home. Companies would then compete for talent in a small population of semi-skilled workers. Government policy may play a key role in hastening this trend. Also, though the Fed has dramatically increased the money supply, many of those dollars remain trapped as bank reserves at the Fed and are not circulating in the economy. If the yield curve continues to steepen, the profit incentive for banks to lend those reserves increases as well. So perversely, higher rates may lead to more dollars circulating and in turn, more inflation pressure.
    • MA
      Michael A.
      13 January 2021 @ 16:08
      Sure. The first statement is about wages. Economists mess this up all the time. Wages don't lead inflation - they follow inflation. It's hard to show this econometrically (although you can) because the series are cointegrated, but it's easy to see intuitively (and Shiller actually hinted at this way back in the 1980s with a paper asking why people dislike inflation): if wages led inflation, we'd all love inflation, wouldn't we? Because our wages would tend to go up first, and THEN prices. We'd always be ahead! But we know that's not the way it works. We have to walk in and argue to the boss that our cost of living is going up. THEN, he or she may raise our wage. Or maybe not. Second question is about money velocity, and you have the causality exactly right. Friedman said that "velocity is the inverse of the demand for real cash balances." We hold less cash when interest rates go up, because there's more of a penalty to hold cash and not invest it or spend it (and investing it just gives it to someone who wanted cash, presumably to spend). So over a long period of time there's a GREAT correlation between interest rates and money velocity.
  • JS
    Jon S.
    13 January 2021 @ 14:25
    Please bring Michael back on plus tier live with live questions? Many thanks
  • BH
    Benson H.
    13 January 2021 @ 09:50
    How will inflation affect gold and gold equities ? negative or positive correlation.
  • SM
    Sam M.
    13 January 2021 @ 09:01
    SVM/Guest: "The penalty for holding money at zero interest rates is zero" ... Not what I would have concluded ... don't tell RV Crypto. Completely unrelated to this comment - last week at the Cricket in Australia a player was unhappy with the umpire's decision and says - "Can I call you a bone-head?" ... the Umpire says "No"; the player says "What if I think you are a bone-head?" The umpire say's "Yes, that's OK" and the Player says "well I think you are a bonehead.".