Thursday, October 17, 2013
David Rosenberg is Now Betting on Inflation; Richard Koo Still Thinks U.S. on Path of Japan (DR's WealthTrack Interview and Links)
David Rosenberg, Chief Economist and Strategist at Gluskin Sheff, thinks you should bet on higher rates and inflation. He will eventually be right. He's been bullish on bonds and bearish on stocks since the Fed's QEs began, and both bonds and stocks went up in tandem since then. So if the Fed tapers QE to zero, wouldn't that flip the current trends upside down? Would stocks and bonds go down, deflation be a threat again, and David Rosenberg's old views come back into play? Or will the economy breakout here (JP Morgan's Chief US Equity Strategist Tom Lee thinks so), which would bring on inflation and the end of QE and ZIRP play. I thought we've been in a deleveraging cycle since 2007? How does even the hint of tapering, end of ZIRP, and fiscal tightening not destroy the inflation thesis. Nomura's Richard Koo, who is an expert on Japan's lost decade, still thinks the U.S. is following Japan (RICHARD KOO: Forget Hyperinflation — The Fed Is Now Facing The True Cost Of Quantitative Easing (at Chron.com via BusinessInsider); Richard Koo: US on Path of Japan, Fed Could Need Capital Injection (via ValueWalk)). Still, everything is all about timing. Careful because the sunspot cycle is peaking.
Source: WealthTrack via Youtube
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