Milton Friedman coined the phrase “inflation is always and everywhere a monetary phenomenon”. He would have been aghast, I think, if he were still around to see this chart of the US monetary base:
Continue readingMonth: April 2022
Trouble brewing in Europe
Germany is the largest economy in Europe. Things are not going well there. It is less than four years ago that President Trump spoke at the UN and was openly laughed at by the German delegation. Trump’s laughable comments, as perceived by the Germans, were to warn of impending serious problems since Germany had deliberately wound back its power generation capacity in favour of long term access to Russian gas.
Now look what two stories appear on the same page of the FT:
Continue readingInvestment in an inflationary environment
Investing in an inflationary environment is new to me in practical, but not theoretical, terms. It has been obvious for over a year now that this current inflation was emerging. But it hasn’t made the practical decisions of how to invest any easier. The last time the world’s major economies experienced significant inflation was at the end of the 1980s. I didn’t have any money to invest back then, so my understanding was theoretical, not practical. I read about it. Fast forward 30 years, I’m now living on the success or otherwise of my investment decisions in what is turning out to be an inflationary environment. At the beginning of 2021, I made my views clear in public professional circles that inflation was emerging as a looming threat. Many didn’t believe me. But we all have to deal with it now.
So, how to invest?
Australian Actuary 