{"id":159089,"date":"2019-11-04T16:30:06","date_gmt":"2019-11-04T21:30:06","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=159089"},"modified":"2019-11-04T15:53:32","modified_gmt":"2019-11-04T20:53:32","slug":"time-for-investors-to-reset-their-portfolios-for-inflation","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/11\/time-for-investors-to-reset-their-portfolios-for-inflation\/","title":{"rendered":"Time for Investors to Reset Their Portfolios for Inflation"},"content":{"rendered":"
November 4, 2019<\/div>
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By Money Metals News Service<\/b><\/p>\n

As investors reset their clocks to accord with the end of Daylight Savings Time, they may also need to reset their expectations for future returns.<\/p>\n

A strong body of research suggests that artificially changing the time twice a year \u2013 forward, then backward an hour \u2013 does more harm than good.\u00a0 It leads to sleep disruptions, heightened stress, missed appointments, wasted time (ironically), and a diminishment of productivity around these biannual time changes.<\/p>\n

\"Time<\/p>\n

As reported in HeadlineHealth<\/a>, \u201cCircadian biologists believe ill health effects from daylight saving time result from a mismatch among the sun \u2018clock,\u2019 our social clock \u2013 work and school schedules \u2013 and the body\u2019s internal 24-hour body clock.\u201d<\/p>\n

That mismatch can have dire consequences: \u201cAt least one study found an increase in people seeking help for depression after turning the clocks back to standard time in November.\u201d<\/p>\n

And \u201cresearch shows the springtime start of Daylight Savings Time may be more harmful, linking it with more car accidents, heart attacks in vulnerable people and other health problems that may persist throughout the time change.\u201d<\/p>

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Of course, no time is ever actually gained or loss \u2013 only redistributed from one part of the calendar to another.\u00a0 But meaningless manipulation is supposed to be beneficial, somehow, as compared to following a consistent 24-hour time cycle throughout the year.<\/p>\n

Similarly, no national wealth is gained overall through the artificial interjection of monetary inflation by the Federal Reserve.\u00a0 But the central bank\u2019s interventions do have the effect of transferring wealth \u2013 often from wage earners and savers to speculators and leveraged financial institutions.<\/p>\n

The Fed\u2019s recent stimulus campaigns and pronouncements on inflation may be setting up investors who buy into conventional asset markets for failure.\u00a0 Last week, Fed chair Jerome Powell reiterated his goal of achieving a 2% inflation objective.<\/p>\n

Put another way, the Fed aims to destroy 100% of the real value of any bond or bank certificate of deposit that yields 2%.\u00a0 Since most savings and money market accounts yield less than that, the Fed aims to ensure they deliver negative real returns.<\/p>\n

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As we\u2019ve seen in other parts of the world, it is possible for cash to carry a negative nominal yield as well.\u00a0 But it is generally easier to get depositors and bondholders to accept negative real returns disguised with positive nominal yields.<\/p>\n

A positive inflation rate also makes it easier for Wall Street to boost the stock market in nominal terms.\u00a0 That, in turn, gets investors excited and drives further gains.<\/p>\n

It\u2019s a virtuous circle\u2026 until it turns vicious.\u00a0 Just as booms can be artifically amplified and extended by monetary inflation, the resulting busts can be extreme as well (especially in real terms).<\/p>\n

According to asset manager Michael Pento<\/a>, \u201cWhen this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble\u201d<\/p>\n

He added, \u201cThe plunge in the stock market would be huge and from a much higher level\u2026 That\u2019s why the Fed\u2019s panicking.\u201d<\/p>\n

We wouldn\u2019t rule out central bankers being able to prolong and extend the bubble for a while longer before it implodes.\u00a0 But in the process, there could be an inflation-fueled explosion to the upside in hard asset markets including gold and silver.<\/p>\n

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The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Money Metals News Service As investors reset their clocks to accord with the end of Daylight Savings Time, they may also need to reset their expectations for future returns. A strong body of research suggests that artificially changing the time twice a year \u2013 forward, then backward an hour \u2013 does more harm than […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-159089","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159089","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=159089"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159089\/revisions"}],"predecessor-version":[{"id":159093,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/159089\/revisions\/159093"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=159089"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=159089"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=159089"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}