Martin North interviews economist John Adams about structural imbalances in the Australian (and global) economy.
“I do think they will try to print their way out of this problem.”
Hat tip to Macrobusiness.
Comment:
I do take issue with the comparison of CPI to Broad Money growth. Broad money growth should closely match nominal GDP growth (real GDP plus inflation) and not just inflation or its surrogate, CPI. The chart below compares nominal GDP in the USA to the money supply (MZM + time deposits is not quite the same as the official definition of Broad Money).
The Fed opened the spigots before the last two recessions, without much effect — in an attempt to inflate the economy out of a recession — and closed them too quickly in 2010, causing a hiccup in the recovery. Since then money supply growth has normalized at close to the increase in nominal GDP.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.