roguedolphin: RBS outlook
I'll go with the Scotch guy. He is half right. Inflation will paralyze certain sectors of the stock market. But why isn't he advising his clients to buy things that hold up well in inflationary periods? Oil service stocks, eg., should do fine. Go into cash? During inflationary periods, cash is trash. I guess he means move your money into investments after the crash he foresees.
As far as inflation goes, you ain't seen nothing yet. Right now, processed food companies are hiding inflation by downsizing products. The 6 oz. UTZ potato chip bag is now 5 oz. Same price, of course. People will sit up and take notice once the price of the 5 oz. bag doubles. Prediction: The cost of food at the grocery store will pretty much double in the next 6-12 months. (But mushrooms will remain the same price; they are grown in the dark and are extremely light to truck to the store!)
Inflation is hideous. Every phase of production of a good rises, starting with the raw materials cost, and it snowballs from there. From the farmer to the food processor, to the store. And when people can no longer afford to drive to work and come out ahead, think cashiers in nonunion shops, they demand wage increases or they quit. The turbocharger of inflation, if you will, is the wage increases with no concurrent rise in productivity. That is what inflation is all about. Think the Jimmy Carter years.
"I see a bad moon arising. . ."
bbotcs
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