Investing/ Markets

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On today’s Intelligent Money Minute, we’ll interview Ed Peters on whether what are the inflationary indicators? During this episode, Ed breaks down the different types of inflationary indicators and how they each impact the economy. As Ed mentioned money velocity, is the amount of currency that is spent compared to how much money is out there. While the money supply has grown, GDP has increased faster, causing the money velocity to collapse and is currently flat.

While there is more money going into the economy, Americans are not spending, but rather saving their money. This can indicate that the current inflationary environment is caused by something other than money supply. Perhaps supply shocks due to supply chain issues. Perhaps demand shocks which are the pent-up demand for goods and services from Americans.

On the next episode with Ed Peters, we’ll talk about the difficulty the Fed has found itself in, and what are some of the potential outcomes as they navigate this difficult environment. Be sure to subscribe to our podcasts so you can stay informed.

Ed Peters Bio

Ed Peters is First Quadrant’s Managing Partner. In this role, Ed establishes the firm’s strategic direction, develops firm-wide initiatives, and chairs the Executive Leadership Team and the Management Operating Committee. Ed also contributes to First Quadrant’s research efforts, with a particular emphasis on market states, and manages the firm’s long-only multi-asset strategy. Prior to joining First Quadrant in 2008, Ed worked at PanAgora Asset Management, at various times serving as equity portfolio manager, Director of Tactical Asset Allocation, CIO of Macro Investments, and CIO. Other past work experience includes Interactive Data Corporation and Mutual Benefit Life. Ed holds an MBA from Rutgers University. He has published articles in multiple investment journals, as well as three books.

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On today’s Intelligent Money Minute, we’ll interview Ed Peters on whether this inflation is a repeat of the hyperinflation of the 70s? During this episode, Ed walks us through the history of inflation starting in the 1970s. He believes that the current inflation the U.S. is experiencing will not last long. He notes that the current inflation is more a perfect storm than a monetary issue.

The late 70s hyperinflation period was in part caused by the OPEC supply-side shock of 1973. There are reasons why the current inflationary period may be transitory. As Ed mentioned, there is a perfect storm of both a demand and supply shock that is similar to coming out of World War II. 

As a result, we think intelligent investors shouldn’t overreact to our current inflationary environment, but be prudent in understanding the reasons why we may be having inflation, and by understanding the cause or causes, we may be able to set proper expectations for the future.

Many people believe that the current inflation we are experiencing is due to all the stimulus checks and programs the government has put out over the past few years. While this increase in money supply can cause inflation, there are indicators that are telling a different story. We’ll be talking more about this and why the velocity of money (or how fast are Americans spending money) in future Intelligent Money Minute podcasts, so be sure to subscribe to our podcasts so you can stay informed.

Ed Peters Bio

Ed Peters is First Quadrant’s Managing Partner. In this role, Ed establishes the firm’s strategic direction, develops firm-wide initiatives, and chairs the Executive Leadership Team and the Management Operating Committee. Ed also contributes to First Quadrant’s research efforts, with a particular emphasis on market states, and manages the firm’s long-only multi-asset strategy. Prior to joining First Quadrant in 2008, Ed worked at PanAgora Asset Management, at various times serving as equity portfolio manager, Director of Tactical Asset Allocation, CIO of Macro Investments, and CIO. Other past work experience includes Interactive Data Corporation and Mutual Benefit Life. Ed holds an MBA from Rutgers University. He has published articles in multiple investment journals, as well as three books.

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On today’s Intelligent Money Minute, we’ll interview Ed Peters on the history and three causes of inflation. During this episode, Ed walks us through the history of inflation starting in the 1970s. He explains the types of inflation and what causes them. He stresses the importance of accurately diagnosing inflation in order to appropriately address it. 

It is important to get an idea of the history of inflation to get an understanding of the current inflationary environment. Inflation can be caused by a number of reasons—primarily money supply, supply shocks, or demands shocks. 

Since we haven’t dealt with inflation for about 40 years, there are a lot of myths surrounding inflation and our current environment. It is vital that you are able to properly diagnose inflation to understand the cause of inflation. We’ll be talking with Ed about Inflation in a number of upcoming podcasts where he will share what he thinks may be the cause of inflation and ways you can deal with it, so as an Intelligent Investor be sure to subscribe to our podcasts so you can stay informed.

Ed Peters Bio

Ed Peters is First Quadrant’s Managing Partner. In this role, Ed establishes the firm’s strategic direction, develops firm-wide initiatives, and chairs the Executive Leadership Team and the Management Operating Committee. Ed also contributes to First Quadrant’s research efforts, with a particular emphasis on market states, and manages the firm’s long-only multi-asset strategy. Prior to joining First Quadrant in 2008, Ed worked at PanAgora Asset Management, at various times serving as equity portfolio manager, Director of Tactical Asset Allocation, CIO of Macro Investments, and CIO. Other past work experience includes Interactive Data Corporation and Mutual Benefit Life. Ed holds an MBA from Rutgers University. He has published articles in multiple investment journals, as well as three books.