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IPFS News Link • Economy - Economics USA

Jeff Gundlach Warns "History Books Won't Say Inflation Was Transitory"...

• https://www.zerohedge.com, by Tyler Durden

Building on his thoughts from earlier in the year that the dollar "is doomed," DoubleLine Founder Jeffrey Gundlach reiterated in tonight's webcast that any "economic growth we're seeing isn't really economic growth," it's just spending funded by "massive amounts of tools and devices The Fed has used."

As he noted previouslyconsumption is not really the economy. The economy is about production. And when you buy goods produced in Asia with stimulus money, it shows up as GDP, but it's really Asian GDP. It's consumption in the United States. "So the economy isn't really that strong with five million fewer jobs."

Even with all the stimulus...

"The Fed decided to go big early," Gundlach said and warns that policy makers going big with stimulus will be a "recurring theme" going forward, building on his previous thoughts that:

"We're running our economy in a way that is almost like we're not interested in maintaining global reserve currency status."

Specifically, the new bond king points out that it only took 20 weeks to unleash stimulus in these terms this time around, versus 80 weeks during the GFC...

And along with massive expansion of The Fed's balance sheet (and concomitant interest rate manipulation), Real Fed Fund rates are dramatically negative (the last time we had negative interest rates of this magnitude wasn't because interest rates were low, but because inflation was high), and while we have "high-ish inflation," Gundlach warns it's not like the '70s...

Simply out, he explains:

"We have the loosest monetary policy" going back to the early 1960s," adding that "we've never seen this magnitude of stimulus."


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