- 8 June 2008
Was actually thinking about getting bonds soon.. knowing that the fiat currency could go zero..but a limited amount just in case i am wrong on main play of PMJust my two cents but gut feel is we're a lot closer to the end of this rate raising cycle than the mainstream expectation.
I can't prove that with data (and I always prefer data....) but we've already had significant inflation and we've already had a rise in interest rates - that's got to be sapping consumers' spending power and the sustainable demand for physical volumes of goods and services surely?
Just my perception but I think ultimately the Fed's and other central banks with ongoing tightening will bring about a proper hard landing economically simply due to the pace at which rates have been tightened. As with anything, a rapid rate of change tends to bring about overshoot. Once that happens, once there's an undeniable recession, that's the end of pricing power for practically anything other than bona fide scarce things eg gas.
Associated with that I see unbridled blue sky optimism at the moment. News media and government are both proclaiming permanently low unemployment and so on - that will be wrong is my expectation. Very wrong.
A bit of crystal ball gazing there, not backed with hard evidence, so take it for what it is. Time will tell.