06-14-2021, 03:42 PM
(06-14-2021, 03:29 PM)fenders53 Wrote: [quote pid='26739' dateline='1623701480']
Why would fed try to should inflation?
Because economies blow up with unchecked inflation? I was young but the 1970's sucked. Certain economic statistics have to stay in a reasonable range or it's trouble before long. Inflation, unemployment and interest are among those important things.
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The 1970s were a unique combination of Nixon taking the Dollar out of Bretton Woods to create the Petrodollar in 1971, and an exogenous shock to the entire economy from the OPEC embargo suddenly raising the price of every conceivable input for sustained periods.
The temporary supply chain disruptions from Covid are not in the same ballpark.
Also, the thought that capital intensive industries like agriculture/mining/etc. are going to perform better than other equities in a sustained inflationary environment is laughable. Find a cash-flow positive software company with solid double-digit YoY growth figures, and that's what will really shine. Low overhead and high margins will continue to outperform. Don't let CNBC scare pieces trick you into buying low-growth commodities while they are high.