Monday, February 4, 2013

Directive 10-289 Watch (Part 34,943)

Instapundit » Blog Archive » ENDGAME: Argentina Freezes Supermarket Prices To Halt Soaring Inflation; Chaos To Follow. “Up unti…: "FEBRUARY 4, 2013

ENDGAME: Argentina Freezes Supermarket Prices To Halt Soaring Inflation; Chaos To Follow. “Up until now, Argentina’s descent into a hyperinflationary basket case, with a crashing currency and loss of outside funding was relatively moderate and controlled. All this is about to change. Today, in a futile attempt to halt inflation, the government of Cristina Kirchner announced a two-month price freeze on supermarket products.”

This never works, but ignorant or dishonest politicians always try it. Luckily, nothing like this could happen here.

Posted by Glenn Reynolds at 11:34 pm"
And then there's that "dimwit conspiracy theorist" named Bill Gross who runs the world's largest bond fund:
Speed Read for Credit Supernova
1) Why is our credit market running out of heat or fuel?
a) As it expands at a rate of trillions per year, real growth in the economy has failed to respond. More credit goes to pay interest than future investment.

b) Zero-based interest rates, which are the result of QE and credit creation, have negative as well as positive effects. Historic business models may be negatively affected and investment spending may be dampened.

c) Look to the Japanese historical example.
2) What options should an investor consider?
a) Seek inflation protection in credit market assets/ shorten durations.

b) Increase real assets/commodities/stable cash flow equities at the margin.

c) Accept lower future returns in portfolio planning.
William H. Gross
Managing Director
Well there then, nothing to worry about up here in Obabwe is there?

And did I forget to mention Kyle Bass? He didn't make a killing predicting the financial crisis or anything:
However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed. Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth.