{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

INFLATION - Monty Guild - The Drivers of Inflation By Monty...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
The Drivers of Inflation: By Monty Guild ME 3232: Engineering Economics and the Real Economy July 4, 2008 (Modifications 11/5/08) Introduction: Prof. Lyon The following commentary provides an excellent discussion on the causes of inflation. It is readily understood by anyone with an understanding and appreciation of the time value of money. It is written by noted wealth management and hedge fund manager Monty Guild. Mr. Guild is the CEO of Guild Investment Management, Inc. The original commentary provided here can be found, along with further related market and economic commentary, at jsmineset.com or guildinvestment.com . Follow-up 11/5/08: Prof. Lyon Since the commentary by Mr. Guild was assembled to create this document, the markets have gone through massive turmoil and there is wide speculation of a world-wide recession and many countries are clearly showing signs of economic contraction. In the midst of this, countries such as China are seeing annual economic growth rates drop from 10-12%, to 7-9%. This is still good, but the drop reflects difficulties in their export markets. As a result, some of the examples given to illustrate the inflation drivers are a bit out of date. However, the drivers are still quite valid, and evidence of their effects are still apparent today, and some of the drivers will go into overdrive in the near future given the international bailouts that are occurring. Put simply, inflation may seem to have subsided for now, but it will become quite apparent again during 2009. As a result, it remains important for people that are looking to plan for their future, and protect their investments, to understand these drivers and be aware of the potential detrimental effects of inflation. "INFLATION'S DRIVER" PART 1 OF THE SERIES Posted On: Tuesday, June 17, 2008 Author: Monty Guild INFLATION WILL COME MORE AND MORE INTO PUBLIC AWARENESS OVER THE NEXT SEVERAL YEARS There are many indicators of inflation in the world that we watch to forecast oncoming inflation. Currently, the great majority of these tell us that the inflation we have seen so far…is just getting started. In our newsletters at Guild Investment Management we have been talking about inflation and its expected arrival for almost two years. We have pointed out the reasons for inflation, and discussed them in a general way. I would like to go into each one individually in a short memo that we will send to clients and to the CIGA’s [Comrades In Golden Arms – name carried by readers of jsmineset.com] in the next few weeks. The public media has picked up on the theme of inflation in the last few months, and they have been haranguing the public about higher food and energy prices. As a result, many people believe that once the rate of the rise in food and energy prices slows, the rate of increase in inflation will recede.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
IT IS NOT THE CASE THAT FOOD AND ENERGY ARE THE SOLE OR MOST IMPORTANT DRIVERS OF INFLATION TODAY. Inflation is a function of many variables and there are about 10 of them that we will discuss in coming memos.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern