I am still not terribly worried about near-term inflation; although,
I am paying more attention to the intermediate-term. Many of the disinflation/deflation
prognosticators I read regularly, who have been right, are changing their tune
slightly, and this is causing me pause. Eventually we will transition from this
disinflationary secular bear/range bound market to an inflationary secular
bull.
However, here is why nothing is imminent: until wages move, we
won’t have inflation, and wages have been stagnant:
Second, if inflation does get out of hand an equity
allocation should do quite nicely:
The charts indicate basically that inflation doesn’t appear
to be a threat now, but if it does become one then stocks should help weather
that storm. One caveat is that inflation
is the only thing in my opinion that will cause interest rates to rise (via the
Fed), so that could have a near-term negative impact on stocks.
The views
and opinions expressed in this blog are those of the author(s) noted and may or
may not represent the views of Capital Analysts, Inc. or Lincoln
Investment. 04/13
