Cents and Sensibility: the Inflation Guy Podcast

Ep. 84: Is it Time to Buy TIPS?

This is an episode with a call to action!

In this episode, the Inflation Guy discusses the current state of nominal and inflation-linked yields, and gives some historical context as to where those stand in the Grand Scheme of Things. In doing so, he explains why TIPS' downside is much more well-defined that those of normal Treasury notes, and why the current level makes it a good time...well, anyway, you can listen to the episode and find out!

 

NOTES

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Ep. 83: Inflation Bookshelf

So often, the Inflation Guy is asked to recommend a good book on inflation. Just one? That's crazy. There are oodles of good books on inflation, and in this episode the Inflation Guy recommends eight.

Okay, one of the recommendations was less-than-enthusiastic. But these are all worth reading. Listen to the podcast, and visit the links below to see the books in Amazon or other site.

[erratum - Inflation Guy in this episode refers to the author of Economics as Robert Samuelson. He obviously misspoke because no reasonably-educated economics student wouldn't know that Economics was written by Paul Samuelson, who won a Nobel Prize by the way. Also William D. Nordhaus, who did not.]

NOTES

Podcast Callback: Ep. 15: An Interview with Special Guest Milton Friedman

Books Referred to:

Fiat Money Inflation in France, Andrew Dickson White, 1933 (free pdf)

When Money Dies, Adam Fergusson, 2010

Inflated: How Money and Debt Built the American Dream, R. Christopher Whalen, 2010

The Great Inflation and Its Aftermath: The Past and Future of American Affluence, Robert J. Samuelson, 2010 (funny how many of these are from 2010. Never noticed that before.)

Money Mischief: Episodes in Monetary History, Milton Friedman, 1994

Asking About Prices: A New Approach to Understanding Price Stickiness, Alan Blinder, Elie Canerri, David Lebow, 1998

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival, Charles Goodhart and Manoj Pradhan, 2020

The Mandibles: A Family, 2029-2047, Lionel Shriver, 2017

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Check out the new website!: https://www.EnduringInvestments.com/

Ep. 82: Why Endowment CIOs Should Operate in Real Space

Eleven episodes ago, the Inflation Guy presented five ways that endowment CIOs could improve their inflation allocations. In a way, that put the cart before the horse and so the IG is circling back: what is it about UPMIFA that virtually demands that CIOs address their asset strategies in real space?

The basic problem is that two of the seven factors that endowment investment committees are to consider under UPMIFA are in tension in nominal space. But, by changing the problem to look at it in real space, the "consideration of inflation" requirement and the "real value of the endowment" requirement can operate in harmony.

Well, that's the gist of it. Listen to the podcast to hear why this is true!

And check out our new website! (link below)

NOTES

Podcast Callback: Ep.71: 5 Simple Ways an Endowment Can Improve its Inflation-Protection Allocation

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

To Subscribe for free to the blog: https://inflationguy.blog/

Check out the new website!: https://www.EnduringInvestments.com/

 

Ep. 81: CPI Report Summary - The Easy Part is Over

In this edition of the monthly CPI Report Summary, the Inflation Guy sets the stage by reminding us about the backdrop: the low, low inflation reports of the last two months. These were somewhat quirky, in mostly different ways, and the IG explains why today's higher-than-expected inflation report is a sign that - although things are getting better - inflation is about to get to the 'sticky part' where continued improvement all the way to the Federal Reserve's goal becomes more challenging.

NOTES

Podcast Callback: Ep.74: Inflation Folk Remedies

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Ep. 80: Hedonic Adjustment and Why You Shouldn’t Hate It

“Hedonic adjustment” is a curse word among those who think that inflation figures are all scrubbed to look nice by the Bureau of Labor Statistics (if they are, the BLS did a pretty rotten job of it over the last couple of years!), but it is not nearly as sinister as you might think it is. In this episode, the Inflation Guy goes inside-baseball again to explain hedonic adjustment, and the offsetting effect that no one ever seems to complain about because it pushes inflation higher.

It's okay to hate inflation, but don't blame hedonic adjustment! Or the Inflation Guy. He's just the messenger.

 

NOTES

To Subscribe to Quarterly Inflation Outlook: https://inflationguy.blog/shop/

Podcast Callback: Ep. 4: The Making of an Inflation Index

Website reference: BLS Link to Hedonic Adjustment Q&A

Website reference: BLS Link to Hedonic Adjustment for Men’s Suits

Research reference: Johnson, D.S., S.B. Reed, and K.J. Stewart . 2006. “Price Measurement in the United States: a Decade Aftert he Boskin Report.” Monthly Labor Review 129 (5): 10–19.

Ep. 79: Seasonal Adjustment and Inflation

The inflation derivatives market is currently suggesting that prices will decline in the US between August (the report we get in a couple of weeks) and December. Does this mean that inflation is upon us? No, and the reason why is something called 'seasonal adjustment.'

It turns out that seasonal adjustment is critically important for inflation markets, and the market's pricing is not nearly as outlandish as it looks. In this podcast, the Inflation Guy explains in plain English what seasonal adjustment is, and what it means in this case.

NOTES

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Ep. 78: Why China’s Economic Weakness Isn’t Deflationary

Recent data out of China has shown growing stresses in the property market, implying stresses in banking; weakness in the trade balance; and generally disappointing growth. This has led some observers to suggest a deflationary wave is headed our way. In this episode, the Inflation Guy recalls a prior example where weakness in Pacific Rim countries actually provoked acceleration in Western economies, and rising inflation.

NOTES:

Book: Maestro, My Ass! https://amzn.to/45hhFbP

Ep. 77: This Month’s CPI Report - Don’t Get Used to It!

The US CPI was released today and was a modest positive surprise to expectations that were already pretty optimistic in the sense that economists (and the Inflation Guy) were expecting a low print. In this podcast, the IG breaks down the report and points out the very positive developments...along with some curious quirks that soften the miss.

But the big question is, what happens next? And here, the Inflation Guy is less sanguine. He gets specific about why, in this podcast. Tune in, and subscribe!

NOTES

Pod callback: “Inflation Folk Remedies”

Blog callback: “Three Colliding Macro Trends”

Blog callback: “Summary of My Post-CPI Tweets (July 2023)”

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Ep. 76: Why Does Inflation Matter?

The Inflation Guy, let's face it, sometimes goes a little off the rails when the topic is inflation and the importance of the inflation lens. In this episode, he compares inflation to the fabric of space-time. Can you imagine?

The upshot is that even if you don't know anything about space-time, it is still very important to you - and it is crucially important if you happen to be launching rockets. So if you're launching investment rockets, then the fabric of the price-system-space-time should be very, very important to you. It's a good point.

Just seems like he could have said that more succinctly.

NOTES

Blog callback: “Wimpy’s World”

Pod callback: “Ep. 21: Recording for Posterity the Absurdity of Negative Interest Rates”

Chart of Enduring Quebec Retiree Inflation strategy vs Qc Retiree Inflation: Thru June 2023

Ep. 75: Where Are We in the Inflation Tale?

Let's take a big step back. The Inflation Guy spends a lot of time in his podcasts talking about the current CPI figures and fairly short-term considerations. But economic episodes are like books, with rising action, a climax, and falling action - and bigger cycles are like book series (think Harry Potter). As we get closer to the end of this book, we need to think about how the next book advances the plot. The Inflation Guy talks through the current chapters, looks forward to the end of this book, and suggests what he thinks Book 2 will look like. Because inflation is not a book you can put down: you're in it to the end.

NOTES

Podcast callback: “Ep. 50: What the Money Velocity Comeback Means for Inflation, and Investors”

The Inflation Guy's book: “What’s Wrong with Money?: The Biggest Bubble of All” – by the way the price online is absurd. Email inflationguy@enduringinvestments.com and he can sell you out of his own stock. If you're in Europe, try https://www.wiley.com/en-be/What%27s+Wrong+with+Money%3F%3A+The+Biggest+Bubble+of+All-p-9781119191162

Chart of the M/Q and V convergence: https://inflationguy.blog/wp-content/uploads/2023/07/convergence.jpg

Link to Trivia Answer Audio: https://www.youtube.com/watch?v=q4-gsdLSSQ0