Greenspan, Stagflation And What It Means For Commodities, Gold & Silver
Greenspan, Stagflation And What It Means For Commodities, Gold & Silver from King World News
This is the interesting thing regarding Alan Greenspan’s comments about stagflation as well as what it will mean for commodities, gold and silver.
Greenspan & Stagflation
By Michael Oliver, MSA (Momentum Structural Analysis)
August 6 (King World News) – I used to read Alan Greenspan in the late 1960s when he was still a private economic consultant and an unknown in the political/governmental world. He was also part of Ayn Rand’s inner circle—humorously called “the collective”—and contributed several chapters to Rand’s Capitalism: The Unknown Ideal. In his writings he attacked the underlying concepts of government central banks and their real-world consequences. Reagan appointed him as head of the Fed in 1987. Was this rebel going to bring down the system from within? Hardly…
Under Greenspan’s reign the Fed was arguably the sponsor of the dotcom and real estate bubbles. But maybe now, later in life, he’s come full circle. I can’t be sure, but his recent interview with Maria Bartiromo at least yielded this choice quote:
There are pressures obviously emerging for long-term debt to start moving up. It’s (at) an extraordinary low level. And as the inflationary pressures which now seem to be building, we’ve just been through a long period of stagnation, we’re moving now toward what we used to call stagflation. (emphasis by MSA)
MSA called a long-term top in T-Bonds (a low in yield) last October, and we argue that more drop in price/rise in rates is ahead, based on our assessment of annual momentum. So we agree with Greenspan’s rising interest rate outlook. We also see sufficient and increasing positive macro-trend technical evidence in commodities to affirm his fundamental anticipation of inflation.
We think that a factor in this shift towards commodities is not merely the rate rise situation, but a likely shift in investor preferences.