{"id":20872,"date":"2020-12-20T15:39:50","date_gmt":"2020-12-20T19:39:50","guid":{"rendered":"https:\/\/www.pgmcapital.com\/?p=20872"},"modified":"2020-12-20T15:39:52","modified_gmt":"2020-12-20T19:39:52","slug":"will-we-see-a-return-of-inflation-in-2021","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/will-we-see-a-return-of-inflation-in-2021\/","title":{"rendered":"Will we see a return of Inflation in 2021?"},"content":{"rendered":"\n

Dear PGM Capital<\/strong> Blog readers,<\/p>\n\n\n\n

In our last blog article for the year 2020,\u00a0\u00a0this weekend\u2019s blog edition will be a discussion of the possibility of a return of inflation in 2021.<\/p>\n\n\n\n

INTRODUCTION:<\/h3>\n\n\n\n

Inflation is defined as an increase of an average\u00a0price level\u00a0of a\u00a0basket of selected goods\u00a0and services in an economy over some period of time.\u00a0<\/p>\n\n\n\n

The rise in the general level of prices, often expressed as\u00a0a percentage,\u00a0means that a unit of currency effectively buys less than it did in prior periods.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

An increase in the supply of money is the root of inflation,\u00a0in the sense that Inflation\u00a0depends on\u00a0money\u00a0growth and the\u00a0velocity of money<\/a>,\u00a0meaning that prices\u00a0increase when the product of the\u00a0money<\/strong>\u00a0supply and its\u00a0velocity<\/strong>\u00a0grows faster than real GDP.<\/p>\n\n\n\n

Inflation rate:<\/h5>\n\n\n\n

Inflation is the rate at which the the value of a currency is falling and consequently the general level of prices for goods and services is rising.<\/p>\n\n\n\n

THE INCREASE OF MONEY SUPPLY:<\/h3>\n\n\n\n

The below charts show the balance sheets of the Federal Reserve, the Bank of England, the European Central Bank, and the Bank of Japan at the end of Q2-2020, in response to the COVID-19 pandemic.<\/p>\n\n\n\n

\"\"
Fed-Balance-Sheet-until-June-2020<\/figcaption><\/figure><\/div>\n\n\n\n
\"\"
Bank-of-England-Balance-Sheet-until-June-2020<\/figcaption><\/figure><\/div>\n\n\n\n
\"\"
ECB-Balance-Sheet-until-June-2020<\/figcaption><\/figure>\n\n\n\n
\"\"
Bank-of-Japan-Balance-Sheet-until-June-2020<\/figcaption><\/figure>\n\n\n\n

The above charts show, that Central Bank balance sheets have swelled in response to COVID-19, for which the one of Federal Reserve is leading by a approx. 3 mile trillions USD growth in 2020.<\/p>\n\n\n\n

PGM CAPITAL ANALYSIS & COMMENTS:<\/h3>\n\n\n\n

It has been\u00a0approximately\u00a040 years since the world grappled with serious inflation; however,\u00a0since the coronavirus pandemic, rampant spending by central banks and governments has led to expectations that change is afoot.<\/p>\n\n\n\n

As can be seen from the below chart, Gold, the classic hedge against currency debasement, hovers around an\u00a0all-time nominal high.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Capital markets which are a forward looking mechanism are also hovering around all time high.<\/p>\n\n\n\n

Based on the above, some economists, turning to the history books, muse that inflation will follow.<\/p>\n\n\n\n

The threat of widespread and persistent price rises matters now more than ever. Inflation exacerbates social divides, affecting\u00a0those who are\u00a0worst off the most.<\/p>\n\n\n\n

As lockdowns ease, prices could jump. Businesses may want to make the most of pent-up demand as rules on social distancing are relaxed. Shocks to supply chains could bump up costs.<\/p>\n\n\n\n

However, in the rapidly changing world and subsequent turbulence and chances of rise in inflation, PGM Capital is at your service as your Professional, Trustworthy and Dedicated, Financial Advisor and Asset Management.<\/p>\n\n\n\n

\"\"\/<\/figure><\/div>\n\n\n\n

Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Yours sincerely,<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"

Dear PGM Capital Blog readers, In our last blog article for the year 2020,\u00a0\u00a0this weekend\u2019s blog edition will be a discussion of the possibility of a return of inflation in 2021. INTRODUCTION: Inflation is defined as an increase of an average\u00a0price level\u00a0of a\u00a0basket of selected goods\u00a0and services in an economy over some period of time.\u00a0 The rise[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":20901,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-20872","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=20872"}],"version-history":[{"count":25,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20872\/revisions"}],"predecessor-version":[{"id":20906,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20872\/revisions\/20906"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/20901"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=20872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=20872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=20872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}