This blog has been very insightful and has triggered some thought processes.
Couple of points:
1. Average debt to GDP ratio was 33% in whole 1970s decade. whereas the current debt to GDP ratio is 125%. Probably gives a measure to assume that inflation will drop 4x faster now as sensitivity to interest rate increases is much higher.
2. While the deglobalization factor is not expected to change anytime soon with tensions expected to escalate if anything, technology adoption is not expected to drop either. Both factors, which were nonexistent in the 1970s and which affect inflation, could balance each other in near future going forward. There is also the off chance that political parties get more aggressive in dealing with inflation with attempts to remobilize global supply chains as the old guard gets seen off ( as is evident from mid-term polls).
This blog has been very insightful and has triggered some thought processes.
Couple of points:
1. Average debt to GDP ratio was 33% in whole 1970s decade. whereas the current debt to GDP ratio is 125%. Probably gives a measure to assume that inflation will drop 4x faster now as sensitivity to interest rate increases is much higher.
2. While the deglobalization factor is not expected to change anytime soon with tensions expected to escalate if anything, technology adoption is not expected to drop either. Both factors, which were nonexistent in the 1970s and which affect inflation, could balance each other in near future going forward. There is also the off chance that political parties get more aggressive in dealing with inflation with attempts to remobilize global supply chains as the old guard gets seen off ( as is evident from mid-term polls).
nice writeup, geoffrey
Interesting observation and analysis on USD/JPY.
Great writeup, enjoyed reading it.