# Rosenberg interview - "Get ready for higher inflation"



## dubmac (Jan 9, 2011)

http://www.theglobeandmail.com/glob...t-ready-for-rising-inflation/article14280125/

If David Rosenberg is right, and the Fed wants higher inflation, what are the effects on my pf?
I expect bond yields to continue to widen (probably not a good place to put money in the near term, and GIC rates to increase ...slowly. Not sure however, what the other implications are in the scenario that he presents. Does anyone have any input on what REIT's, and Gold prices will do in a rising rate, inflationary (to 2.5% annually) environment? What about other effects - oil, food company stock prices. Who wins and who loses in an inflationary environment?


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## GoldStone (Mar 6, 2011)

Don't make your investment decisions based on macro forecasts. They are useless.

Google "David Rosenberg forecast". Read the links from 2-3 years ago. Some of his past predictions look comical now.

Here he is... talking about Dow 5000 in 2010.
http://pragcap.com/david-rosenberg-is-dow-5000-really-possible

It's not really about Rosenberg. Macro forecasts are a mug's game.


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## humble_pie (Jun 7, 2009)

.
another member has already commented on the rosenberg interview in another thread:



andrewf said:


> I don't really listen to expert forecasts. You're better of flipping a coin.



actually, since rosenberg returned to canada to take up the chief economist's helm at gluskin sheff, has he really been right-on-the-money a lot of the time? i'm not a follower but i tend to think not.

black mac as you know i'm just a poor crumb with no eddication. I do know how to read, though. What i've read is that studies have shown that canadian bank shares have, historically, continued to rise right into the teeth of rising interest rate cycles. Apparently bank shares tend to go on rising for at least a year, i read.

as for gold, poor pie has read about 2 schools of thought. One says rising inflation = rise in raw materials = rise in gold price. The other school of thought says higher interest rates = higher cost of maintaining gold inventories = drop in gold price.

as the esteemed member says, one is better off flipping a coin.


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## fatcat (Nov 11, 2009)

in this article he was more specifically talking stagflation which feels more correct to me
http://business.financialpost.com/2...interest-rates-and-at-least-mild-stagflation/

these _experts_ litter the landscape
i say do your own reading and make up your own mind (or flip a coin)


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## humble_pie (Jun 7, 2009)

i'm flipping a coin

heads bonds go down
tails yields go up


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## GoldStone (Mar 6, 2011)

Here's another star economist - Gary Shilling - talking about deflation earlier this year.

Why Global Economies Face an Age of Deflation

Stimulus Spending Only Delays Chronic Deflation

The Five Ways Deflation Has Already Taken Hold

Gary Shilling has a very good track record of being right. He made a killing investing in long bonds for the past ~15-20 years (during secular decline in interest rates).

*DISCLAIMER:* I have no idea who is right, Shilling or Rosenberg. Inflation/deflation is a major uncertainty at this point.


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## Cal (Jun 17, 2009)

The way I see it is, as long as I stay invested, my portfolio is along for the ride, regardless of inflation or deflation. Whether it keeps up with either who knows.

If I cash out....as posted above, like flipping a coin.


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## andrewf (Mar 1, 2010)

This is where confirmation bias enters the picture. You can find an expert to agree with just about anything.


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## dubmac (Jan 9, 2011)

Thanx fellow CMF ers.
I think the general concensus is that this fellow (Rosenberg) is just another crystal-ball gazer. His opinion is not necessarily true.
I enjoy the feedback and always find your comments helpful when I'm trying to figure out matters financial and matters on investing. 
'ave a good weekend! - Gotta luv these cooler tranquil still-summer nights :untroubled:


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## sags (May 15, 2010)

If inflation doesn't occur after central banks have been pumping Trillions into the economy............

Wouldn't that mean all past and current economic theory was completely misguided and wrong?

An assembled group of economists would not agree on much.........but I think had they been presented with a scenario of unprecedented money printing by government, they would all have agreed the result would be hyper-inflation.

If it were not so...........money printing would be the painless cure for all economic woes.


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## andrewf (Mar 1, 2010)

The reason central banks are printing money is to cause inflation, pretty much explicitly. They reason they want to do that is to counteract strong deflationary forces (most of the world trying to deleverage at the same time).


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## dogcom (May 23, 2009)

Money printing is the cure and last gasp effort to the lack of credit getting out the door. People borrow and borrow if they can to cause inflation as long as money is cheap. Today they can't borrow because they are tapped out so interest rates must go close to zero to get them to borrow. The money printing must keep increasing to allow people to afford to borrow and so on. At some point either they print to oblivion or the world throws in the towel on the scheme. Gold will increase on this uncertainty and not because of inflation that is controlled. 

Of course this is the world reserve currency we are talking about. If we are talking about other currencies outside of the big currencies then hyper inflation occurs because no one cares about those currencies.


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## GoldStone (Mar 6, 2011)

sags, monetary system is a complicated beast. "Money printing" is not as simple as you make it sound. Try reading this:

Stop With the “Money Printing” Madness


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## james4beach (Nov 15, 2012)

I don't believe that high inflation is imminent. Look at gold and commodities ... commodities in general have been plummeting for two years now. This is not consistent with a high inflation environment.

Additionally I see strong deflationary forces on the world economy. Namely Europe, whose banking & derivatives mess basically means inevitable deleveraging. Once that crisis erupts, it's going to destroy a lot of money. At the same time China seems to be slowing and contracting... remember the Shanghai Composite has been declining for over 3 years now.

The only places I see anything smacking of inflation are US stocks and oil prices. But I'd say these are outliers in the global picture, though oil is very serious. I sense overall that deflationary forces are more potent now than inflationary ones. And think about it... the Fed and ECB printed this much money, and it didn't even make commodities rise.


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## humble_pie (Jun 7, 2009)

i think every family is experiencing de facto inflation at the consumer level. There's no deflation in sight here.

what food, clothing, gas prices are in decline? none.

what insurance, property tax bill, hydro, home heating supplier, IP provider, phone, dentist, orthodontist, physiotherapist, gym enrolment, private school tuition, university tuition, hairdresser, barber or any other service fee being billed to any family anywhere in canada, is actually going down?

everything keeps going up ...

EDIT: family budgets have never had anything to do with price of gold. IMHO the yellow metal could plunge to pre-nixon gold standard levels, while cost of living for ordinary family consumers would keep on increasing by 10% per annum ...


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## My Own Advisor (Sep 24, 2012)

I'll flip the same coin Humble.

Buying more EMA today though, 52-week low.


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## andrewf (Mar 1, 2010)

Here's core CPI:










Core CPI is below the Bank of Canada's target of 2%. But yeah, yeah, the BoC is part of a vast global conspiracy...


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## HaroldCrump (Jun 10, 2009)

Listening to David Rosenberg in that video, and other such economic soothsayers, it seems it may not be _that_ hard to be one, esp. if there is no requirement to be _right_.
You look at a bunch of macro indicators, read some news, know a little bit of economic history, shoot some bull, and you are all set.
Most of us on this forum can do this job.

Wonder how much these guys pull in.


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## andrewf (Mar 1, 2010)

And these guys don't ever have to be right. They just have to be interesting, to get on the cable news circuit.


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## MoneyGal (Apr 24, 2009)

To Andrew's point - did anyone read this fantastic column by Jason Zweig on investment journalism? http://blogs.wsj.com/moneybeat/2013/06/28/the-intelligent-investor-saving-investors-from-themselves/


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## Four Pillars (Apr 5, 2009)

MoneyGal said:


> To Andrew's point - did anyone read this fantastic column by Jason Zweig on investment journalism? http://blogs.wsj.com/moneybeat/2013/06/28/the-intelligent-investor-saving-investors-from-themselves/


'fantastic' is indeed the word - thanks for pointing out a great read.


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## andrewf (Mar 1, 2010)

Agreed.

This is why the business/investing media is so counterproductive. The more you take in, the more you're likely to be lead astray.


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## My Own Advisor (Sep 24, 2012)

MoneyGal said:


> To Andrew's point - did anyone read this fantastic column by Jason Zweig on investment journalism? http://blogs.wsj.com/moneybeat/2013/06/28/the-intelligent-investor-saving-investors-from-themselves/


Jason's article was outstanding.


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## humble_pie (Jun 7, 2009)

no, it's the other way around.

this article doesn't knock "investment journalism."

rather, the whole point of the article is how he, the journalist, has been 100% right so many times, but it's the readers who wrongfully revile him for not subscribing to the popular views.

actually i found the article somewhat self-serving. This journo has a clever reverse-pretzel way of telling the reader how great he's always been. Right down to callously using the dying father story to enshrine the self-righteousness.


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## andrewf (Mar 1, 2010)

Most biz news is a bunch of talking heads predicting things that have a nasty habit of not coming pass. It is just so much noise. That's not even getting into the dog and pony shows like Kramer.


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