Inflation and Broken Windows

• John Mauldin, Thoughts from the Frontline
• |January 29, 2021

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Gripping Hand Update
Back with a Vengeance
Broken Window Fallacy
Implications
Robinhood, GameStop, et al.

I’m often asked if I foresee inflation or deflation. This week we had an “Ask Me Anything” session for Alpha Society members and it came up several times. Both are possible in their own ways, and frankly I feel a little funny telling people I think we will see both. I would just like to have a growing economy and dependable money that holds its value.

But for these letters, I have to distinguish between what I want and what I expect. The kind of stability I prefer isn’t on the menu right now. So today we will wrap up my 2021 forecast series with a look at this important debate.

By the way, my Over My Shoulder macro research service members already saw full versions of some of the reports I’ll quote below. If you aren’t one of them, now is a great time to join. Where else can you find an essay from a music lawyer comparing Robinhood to Napster? It was totally on point. Technology quickly transformed that industry. If you are in the market you need to understand those changes. Someone will become the financial equivalent of Spotify.

Getting tough‘ on China makes headlines, but abroad nobody cares what Johnson says

Date: 30‑01‑2021

Source: The Guardian

Most countries do not feel the need to pontificate about the failings of others. Change comes from within, not without

‘There is nothing that Dominic Raab and Boris Johnson can do about China, any more than they can about anywhere else they noted in the morning news.’

Boris Johnson was last week pressed by senior Conservatives to “take a tougher stance against China” on Uighurs, Hong Kong and human rights. What this means is obscure.

A British foreign secretary reaches his office each day amid images of imperial might. The Foreign, Commonwealth & Development Office is a gallery of murals of Pax Britannica, foreign victories, dazzling potentates, cowering enemies and grateful native peoples. By the time the minister’s feet are under his desk, he must feel the world is straining for his command.