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Q&A With Paul McCully , Chief Economist, PIMCO: Is Inflation Really Dead ?
FYI: We put the question to Pimco Chief Economist Paul McCulley, who explains why you don't have to worry about rising prices—and why Forrest Gump was a great economist. Regards, Ted http://time.com/money/3148609/paul-mcculley-pimco-inflation/
Agree. Paul McCulley is easy to understand and speaks very clearly and plainly. Unlike that of Bill Gross, who is usually somewhat difficult to understand.
McCully makes some good points regarding why inflation is low. However, I think his analysis is short sighted and somewhat superficial. Maybe that's just the way these financial guys view things,
Let's also consider:
(1) the influence of an aging population shifting from their free wheeling debt laden "accumulation" years to a life style where financial security (thru home ownership, insurance annuities, savings) is paramount.
(2) the near demise of labor unions - for assorted reasons
(3) the increasing wealth disparity around the world and the increasing influence of money In our domestic political process. As McCully points out, the wealthy benefit more from low inflation (and thus have an interest in keeping it low) because their savings erode less rapidly. Debtors, on the other hand, benefit more from an eroding Dollar by repaying their debt in "cheaper" ones.
Comments
Unlike that of Bill Gross, who is usually somewhat difficult to understand.
Let's also consider:
(1) the influence of an aging population shifting from their free wheeling debt laden "accumulation" years to a life style where financial security (thru home ownership, insurance annuities, savings) is paramount.
(2) the near demise of labor unions - for assorted reasons
(3) the increasing wealth disparity around the world and the increasing influence of money In our domestic political process. As McCully points out, the wealthy benefit more from low inflation (and thus have an interest in keeping it low) because their savings erode less rapidly. Debtors, on the other hand, benefit more from an eroding Dollar by repaying their debt in "cheaper" ones.