by Tyler Durden
Thursday, Jul 15, 2021 - 09:40 PM
With the latest CPI numbers stoking interest in the "transitory" vs. "not-so-transitory" inflation debate, it's perhaps fitting that the latest MacroVoices interview featured Macquarie global equities strategist Viktor Shvets, who explained why he believes the world is entering a new era where the deflationary pressures produced by technology-induced improvements in productivity will create a "race to zero" that will see prices continue to fall.
However, Shvets believes that over the next 10 to 20 years, inflation and deflation will act more like opposite sides of a pendulum that occasionally swings back and forth.
On the inflationary side, one new development is the dominance of fiscal policy over monetary policy in terms of their impact on the market. An innovation inspired by COVID-19 that Shvetz expects will increasingly become the norm in the US. As the younger generation embraces "socialism", the US government will likely increasingly pay for medicine and even a universal basic income for those who don't work (and perhaps even for those who do).