Please Watch My New YouTube Video: Trend of the Week This is What Deflation Looks Like
Today’s Trend of the Week is This is What Deflation Looks Like. Last week, Ford announced it’s cutting the price of the Ford F-150 electric truck, the F-150 Lightning, by nearly $10,000. The prices had gone up when supplies were low, but now, Ford says that they’ve cut production costs, so they’re able to cut prices. Maybe. That’s one explanation anyway. But, the news came as Tesla’s long-awaited truck appears to be finally hitting the market (sometime this year.) There is an over-supply of electric vehicles in general as more and more car makers have pivoted to the EV, and the sector hasn’t grown as fast as the production. In order to keep market share in a young-fast growing industry, companies, like Ford, will cut prices. This is as an early sign of a potential deflationary period. The timing of a transition from an inflationary environment to a deflationary environment will depend largely on global climate change. A lot of money will have to be spent on building, or rebuilding infrastructure, which could stress supply, putting the brakes on deflation. Keep an eye out for my special report called, Investing in Global Climate Catastrophe for more on inflation, deflation and interest rates. For now, the Ford announcement gives us the first hint of deflation in a critical sector of the global economy.
Deflation or a spike in inflation in 2020-21: A tale of two fatter-than-expected tails
The financial market consensus on inflation is pretty obvious: For 2020 and 2021, the U.S. economy will see modest inflation, maybe 1.5% to 1.75%. That would be significantly below the Federal Reserve's inflation goal of 2% or so. And that gap would keep the Fed...
Another reason stocks are rallying? A belief in negative interest rates by early 2021
The Fed funds futures market, which trades bets on where the Federal Reserve's benchmark interest rates are headed, has rallied this week to send prices for futures contracts in early 2021 above 100. Above 100 traders are pricing in negative interest rates from the...
Inflation continues to fall; deflation a possibility
The Organisation for Economic Cooperation and Development said annualized inflation across the group of 37 advanced economies slowed to 1.7% in March from 2.3% in February. That's the biggest deceleration since the 2008 global financial crisis. Energy prices fell by...
More real world auto news on the possibility of deflation–and a Hertz bankruptcy
In my post on the possibility of a deflationary cycle, I noted the big surplus of supply over demand in the auto market. Where I wondered were all those excess cars going? Today, a story from Los Angeles, says that some of them are swanning around at sea--along with a...
Adding Coke to my Dividend Portfolio
Today's shocking announcement from Royal Dutch Shell (RDS-A) that it would cut its 10% dividend, to 16 cents a share is a brutal reminder of one of the big challenges facing dividend investors. Royal Dutch shares were down 12.02% as of 3 p.m. Nw York time today, April...
Are we headed into an era of longterm deflation? Will the Fed say it’s worried about deflation after tomorrow’s meeting?
As long as I can remember (which is only back about 40 years when it comes to the economy) the worry has been inflation. From the stagflation of the late 1970s, to Paul Volcker's brutal but successful assault on inflation in the early 1980s, to the seemingly endless...Funny money in Japan just keeps getting funnier–are you laughing?
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Selling Yamana Gold out of Jubak Picks, keeping it in long-term portfolio
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...
Private data says China’s economy is weaker than the government is reporting
The private CBB Beige Book reports that national sales revenue, output, prices, hiring, borrowing and expenditure were all weaker in the third quarter than in the second quarter
Inflation way below the Fed’s target likely to delay interest rate increase
The headline Consumer Price Index measure of inflation fell 0.4% in December after a 0.3% drop in November. The core CPI came in unchanged for the month.
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