House prices were up 6.2% in the third quarter over the same time last year, according to data from the Australian Bureau of Statistics. House prices in the capital cities are surging. Stocks are surging. Gold and oil are surging.
November 17th, 2009 | Dan Denning | 5 comments | ContinuedAll Posts Tagged With: "inflationary"
Fall in Commodity Prices Will Reduce Inflationary Forces
Now to the big subject of the day. Inflation. You’d think evidence of even bigger deficits in the U.S. is clearly inflationary. But not everyone thinks so. The new prophet of doom, Dr. Nouriel Roubini, says at least four factors are setting up what he calls “Stag Deflation” (as opposed to the stagflation of the 1970s, where you had no growth and rising prices). Roubini’s four forces of Stag Deflation are…
October 31st, 2008 | Dan Denning | 6 comments | Continued
Disinformation in the Inflation Wars
If you think that rising demand causes inflation, the sensible thing to do is reduce demand. You do that by raising interest rates. The higher cost of money causes people to cut back borrowing and be more prudent. Aggregate demand in the economy falls, and, presumably, so do prices. But that is all catastrophically backwards. It is a text book cause of putting the cart before the horse…
July 17th, 2008 | Dan Denning | 7 comments | Continued
The Profitable Marriage of Two Soaring Resource Companies
The huge run-up in commodity prices between January and mid-March has been a welcome boost for listed producers in the falling Aussie equities market. Oil, sugar, coal, gold, wheat… all these things have gained voraciously. Australian companies drilling, harvesting and mining them have weathered the storm of equity-selling better than other stocks. Meanwhile, listed financials have gone from shaky to shaken…
April 3rd, 2008 | Dan Denning | 0 comments | Continued
Fed’s Latest Line of Attack on the Credit Crisis is Inflationary
Bear Stearns was on the receiving end of an indirect loan from the Federal Reserve on Friday. Though Bear is the fifth-largest securities firm in the U.S. (and the ninth largest bank in the world), it’s an investment bank, not a commercial lender. The Fed can’t loan directly to investment banks, so the loan had to be routed through a willing third-party, in this case JP Morgan. It turns out that last week’s big US$200 billion loan facility was probably set up to make this three-way transaction possible.
March 17th, 2008 | Dan Denning | 4 comments | Continued