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Pimco Boss El-Erian: Deflation Now A Real Threat

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http://www.telegraph.co.uk/finance/economics/7928018/US-economy-on-the-road-to-deflation-warns-Pimco-boss-El-Erian.html

US economy 'on the road to deflation', warns Pimco boss El-Erian
Mohamed El-Erian, the head the
world's largest bond fund
, has said the United States faces a one in four chance of suffering deflation and a double-dip recession.
Published: 11:55AM BST 05 Aug 2010
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Mr El-Erian said that downward pressure on prices – translating into a rise in real borrowing costs – was a
lready encouraging companies to accumulate cash
"in a way that was unthinkable just two years ago", while individuals were being driven to save.
"On the road to deflation, which is what the United States is on today ... policy becomes less effective," he said.
He also warned that US unemployment was likely to stay "unusually high".
US inflation is currently at it lowest rate in 44 years.
Consumer prices dropped 0.1pc month-on-month in June, following a fall of 0.2pc in May. The core consumer price index, which excludes volatile energy and food prices, increased 0.2pc in June, but is well below the 2pc growth targeted by the Federal Reserve.
Concerns over deflation has already led some major investment funds to hedge against stock falls
while buying more interest-bearing assets.

PIMCO have 1TR under management so I suppose their views have some value. If people are saving they are not spending so prices need not rise. If prices don't rise they fall and the deflation vortex carries the spiral on down the black hole. Last time the Fed printed it boosted deflation. Once burned twice shy?

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http://www.telegraph.co.uk/finance/economics/7928018/US-economy-on-the-road-to-deflation-warns-Pimco-boss-El-Erian.html

US economy 'on the road to deflation', warns Pimco boss El-Erian
Mohamed El-Erian, the head the
world's largest bond fund
, has said the United States faces a one in four chance of suffering deflation and a double-dip recession.
I haven't seen a single cases of unmanipulated CPI deflation since WW II over say 2 years period (not even in Japan). Don't really believe him - and now with USD following again and chinese wage rising, deflation? He got to be joking. Deflation of asset / bond prices are another matter - it may be a problem for PIMCO, but that is not CPI deflation..

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Bond peddler says bonds good long term investment?

Or have I become too cynical hanging around this place?

Actually, M E-I is an equity peddler.

He's been the "face of Pimco" as they've tried to get equity investors in because Bill says bonds are dead.

This very recent pronouncement of deflation and "buy bonds now!" is a complete turnaround.

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Bond peddler says bonds good long term investment?

Or have I become too cynical hanging around this place?

Why does anybody listen to this guy, his boss, Soros, the bowtie wonder, or the rest of the self-serving tosspots who continually scream their own positions and boll0cks to everybody else. Pimco has a 180 degree different position from just TWO feckin months ago when it was inflation, inflation inflation. Obviously they are out of that position and heavily leveraged (hence the deflation nightmare). Anybody who has 1T under management should shut the feck up.

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Why does anybody listen to this guy, his boss, Soros, the bowtie wonder, or the rest of the self-serving tosspots who continually scream their own positions and boll0cks to everybody else. Pimco has a 180 degree different position from just TWO feckin months ago when it was inflation, inflation inflation. Obviously they are out of that position and heavily leveraged (hence the deflation nightmare). Anybody who has 1T under management should shut the feck up.

I like your style,

Ultimately it really is all greedy, self serving mind boggling boll0cks.

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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