Minyan Wendy writes:



In your post How does one invest for inflation and deflation? you addressed investment themes for hyperinflation and deflation. What about the middle ground? How about a scenario of mild, but higher than market-predicted inflation.... inflation rates of 5% to 10% per year. That would be troublesome to retirees and others, and is far more probable than the much rarer, and more extreme, disastrous scenario of hyperinflation.



All I care about is the inflation of the prices of the goods and services I use. This is much higher than the official rate of inflation, though it is certainly not hyperinflation.



How linked is the world economy to the U.S. consumer? Would global stocks still roll on, if the U.S. economy stagnated? Would commodity prices stagnate?



Wendy

A Whole Lotta Flation

What about the prices of necessities?

Base Money Supply

IEF Lehman 7-10 Year Treasury Fund

Not All Muddle Throughs Are Created Equal

Not Your Father's Stagflation

This is not your father's stagflation

Searching For Yield & Searching For Guarantees

Prices are rising at x%, the CPI is a crock, so if I get less return than x% then I am losing money

As long as banks can borrow short-term with negative real-rates and lend long-term banks effectively have a license to print money.

An Asymmetrical Unwind of the Credit Bubble

Muddle Through Assumptions

Housing is going to continue to be weak

Commercial real estate is going to be weak

Capital impairments at banks will be an issue

Unemployment is going to rise

Consumer spending will be weak

Credit card defaults will rise

Foreclosures will rise

Corporate earnings will be weak



The Yen carry trade will unwind

Muddle Through Assumptions Discussion

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