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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.