A"Global"Inflec-on"Point?"" - PowerPoint PPT Presentation

A"Global"Inflec-on"Point?"" The"Post5Crisis"World"Economy"in" Historical"Perspec-ve" SIC,%Dallas,%May%27,%2016%

Looks%like%my%former%boss%is%winning%the%debate%

It’s%downward%revision%Bme%yet%again%

Secular%stagnaBon%fears%are%up% Source:%IMF%

But%did%we%miss%the%inflecBon%point?%

For%the%U.S.,%February%was%the%trough%

For%the%Eurozone%and%China%too%

Only%Japan%didn’t%bounce%aQer%February% Source:%Fulcrum%

Even%the%Atlanta%Fed%is%cheerful%about%Q2%

This%is%what%Reinhart%and%Rogoff%told%us%to%expect% Source:%Reinhart%and%Rogoff%(2009)%

Somewhere%between%5%and%10%years%…% Source:%Reinhart%and%Rogoff%(2009)%

Other%signs%of%inflecBon?% Commodity%price%indices,%198062016% 250" 200" PFOOD" PBEVE" 150" 2010=100% PINDU" PRAWM" PMETA" 100" PNRG" POILAPSP" 50" 0" 1980M1" 1985M1" 1990M1" 1995M1" 2000M1" 2005M1" 2010M1" 2015M1" Source:%IMF%

Commodity%prices%YTD% -20% -10% 10% 20% 30% 40% 50% 0% Soybean Meal Heating oil Gas oil Lean Hogs Brent Crude West Texas Intermediate Gasoline Soybean Lumber Commodity prices % change YTD (23 May) Silver Gold Zinc Ethanol Platinum Tin Sugar Shanghai Aluminum Shanghai Zinc Shanghai Steel Rebar Corn Orange Juice European coal Crude Palm Oil Rubber Aluminum Australian coal Rough Rice Bean Oil Wheat Palladium Coffee 'C' Copper Cotton COMEX Copper Nickel Shanghai Copper Lead Cocoa Source:%Bloomberg% Natural Gas Live Cattle Cattle Feeder ICE Natural Gas

Back%come%some%EM%equiBes% -20% -10% 10% 20% 30% 40% 0% PERU BRAZIL COLOMBIA RUSSIA HUNGARY THAILAND CANADA NEW ZEALAND CHILE PHILIPPINES GREECE TURKEY SOUTH AFRICA MALAYSIA NORWAY MSCI country indices, YTD INDONESIA EGYPT UAE USA CZECH REP . NETHERLANDS AUSTRALIA PORTUGAL DENMARK MEXICO FRANCE SINGAPORE TAIWAN KOREA UK BELGIUM POLAND SPAIN INDIA HONG KONG QATAR SWEDEN JAPAN GERMANY IRELAND AUSTRIA SWITZERLAND CHINA FINLAND ISRAEL Source:%MSCI% ITALY

Tightening%global%labor%markets% Global/dependency/ra3os,/1950@2100/ 110# 100# Dependents/working/age/popula3on/(%)/ 90# 80# (<15#&#65+)/(15164)# (<20#&#70+)/(20169)# 70# 60# 50# 40# 1950# 1975# 2000# 2025# 2050# 2075# 2100# Source:%UN%

The%U.S.%labor%market%is%clearly%Bghtening%

What%might%explain%the%inflecBon?%

Was%there%a%Shanghai%Accord?% Source:%FT%

The%world’s%central%bank%(shhhh)%

So%what%could%possibly%go%wrong?%

Populism:%a%global%backlash%against%globalizaBon%

What%else%could%go%wrong?%

Why%hike%now?%

What%if%Druckenmiller%is%right%(again)?% Source:%Druckenmiller%2016%

What%if%L%shaped%turns%out%to%be%I%shaped% Source:%People’s%Daily%

Final%thought:%The%last%inflecBon%point% OECD average inflation rate, 1956-2014 20 18 16 14 12 OECD - Total 10 OECD - 1956 members 8 (unweighted av.) 6 4 2 0 1956 1966 1976 1986 1996 2006 Source:%OECD%