oldfart
Older than dirt
- Nov 5, 2009
- 2,411
- 477
One of the enduring puzzles of the last six years or so has been why Wall Street types and assorted fiscal conservatives have latched onto people like Ken Rogoff who is again warning last week of the impending dangers of high inflation just over (or in Ken's case, sort of just over but not yet) the horizon. It's Zimbabwe I tell you! Zimbabwe! For Rogoff's latest full stop semi-screed which doesn't say what it says it is saying because to do so would completely trash his professional reputation, see The Exaggerated Death of Inflation by Kenneth Rogoff - Project Syndicate.
Well someone at Bloomburg has tried to put a number to the losses, and that number is ONE TRILLION DOLLARS. And this is an underestimate. It is only the losses sustained in the US government securities market incurred by those who bought the inflation argument and made investments accordingly. Including other markets such as gold and other commodities, interest rate plays, foreign currency futures, and even vanilla stock and bond trading, the losses would be probably at least triple that. http://www.bloomberg.com/news/2014...llion-return-agreeing-with-fed-naysayers.html
So my question to all of the inflationistas out there is, "Did you put your money where your ideology was? And how much did you lose by that investment strategy?"
It seems to me that there are two alternatives. First, a lot of folks knew the inflationista arguments were ideological bullcrap from the start with no foundation in history, econometrics, or economic theory; and accordingly ignored it. These folks deserve plaudits for economic and financial acumen and came out well financially. No one ever said that political hacks had to follow their own economic advice, and history is replete with Wall Street operatives going back to "Uncle Dan" Daniel Drew, the first stock manipulator in New York, who proclaimed one thing while betting the other. For great entertainment and a bit of enlightenment, John Steele Gordon's "The Scarlet Woman of Wall Street" is still required reading for anyone pretending a knowledge of history of Wall Street and American finance will attest; including all seven of the other posters on USMB who have read it will affirm. I digress. Suffice it to say that their financial success should be balanced by the certain knowledge that the only people following the advice of such Janus faces are fools who deserve the fleecing they get.
The other group would be the true believers who invested as they believed. That they still believe is testament to both gullibility and power of cant over reality. Consistently in being in error is no virtue.
Well someone at Bloomburg has tried to put a number to the losses, and that number is ONE TRILLION DOLLARS. And this is an underestimate. It is only the losses sustained in the US government securities market incurred by those who bought the inflation argument and made investments accordingly. Including other markets such as gold and other commodities, interest rate plays, foreign currency futures, and even vanilla stock and bond trading, the losses would be probably at least triple that. http://www.bloomberg.com/news/2014...llion-return-agreeing-with-fed-naysayers.html
So my question to all of the inflationistas out there is, "Did you put your money where your ideology was? And how much did you lose by that investment strategy?"
It seems to me that there are two alternatives. First, a lot of folks knew the inflationista arguments were ideological bullcrap from the start with no foundation in history, econometrics, or economic theory; and accordingly ignored it. These folks deserve plaudits for economic and financial acumen and came out well financially. No one ever said that political hacks had to follow their own economic advice, and history is replete with Wall Street operatives going back to "Uncle Dan" Daniel Drew, the first stock manipulator in New York, who proclaimed one thing while betting the other. For great entertainment and a bit of enlightenment, John Steele Gordon's "The Scarlet Woman of Wall Street" is still required reading for anyone pretending a knowledge of history of Wall Street and American finance will attest; including all seven of the other posters on USMB who have read it will affirm. I digress. Suffice it to say that their financial success should be balanced by the certain knowledge that the only people following the advice of such Janus faces are fools who deserve the fleecing they get.
The other group would be the true believers who invested as they believed. That they still believe is testament to both gullibility and power of cant over reality. Consistently in being in error is no virtue.