Another voice in the inflation/deflation debate. This one is changing his tune.
"I think the people that write off the prospect of cost-push inflation are taking on a very myopic view. Inflation is a process, and it takes a long while to build. There is evidence that the consumer deleveraging cycle is largely over. Subprime auto credit is up 30% from a year ago. We are up to a 20% share of mortgages being originated with downpayments of less than 10%. CLO (collateralized loan obligation) issuance is back to 2007 levels. In the corporate space, fully one-third of high-yield debt issues this year have been centred in firms with the weakest balance sheets. At some point, money velocity and the money multiplier will stop falling."
About unemployment he says::
"Much of this “capacity reduction” may reflect the fact that an ever-rising number of the “99%” are actually getting paid not to work. So I would say this may be more about the incentive system than demographics."
John
Edited by John Burns 8/15/2013 08:04
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Rosenberg changing from deflation to inflation
