A very good reason to ignore conventional wisdom

Message from yours truly:

Conventional wisdom says inflation is low. It is only low because the central banks want you to think that it is low. That will change when they are ready to let that perception change.

Published on Zero Hedge (http://www.zerohedge.com)

Home > QBAMCO On Gold And Inflation: "Don't Fight The Fed... Front Run It"

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QBAMCO On Gold And Inflation: "Don't Fight The Fed... Front Run It"

By Tyler Durden

Created 07/22/2013 - 17:20

Financial asset investors may continue to benefit in the short term while stocks and bonds remain well bid, but production and labor in over-levered economies should continue to wither. When we take it to its logical conclusion, central banks cannot withdraw debt support (on a net basis) and so our baseless currencies seem highly likely to fail to provide sustainable purchasing power. (This happens as producers demand more currency units for their labor and resources, not when consumers drive prices higher by competing with each other for finite supplies of labor and resources.) Continued inflation of all global currency stocks is likely. This implies to us that fundamental expectations of the inevitability of price inflation across borders and in all currencies must change, from unlikely to highly likely. Since very few investors expect rising inflation anytime soon, the return skew is overwhelmingly positive in its favor.

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Source URL: http://www.zerohedge.com/news/2013-07-22/qbamco-gold-and-inflation-dont-fight-fed-front-run-it