What is the cause of record corporate profits: "greedflation" or excessive money?
Both data and logic tell us record profits are the result of record money creation, not corporate greed.
I recorded this podcast on the ARC-UK Youtube network on Friday, June 2, 2023. You can enjoy it at 1.2x.
The presentation is in three parts. In Part One, we discuss “greedflation,” a popular but dumb theory that corporations are causing inflation by arbitrarily jacking up their prices. Using data, logic, and examples, this theory is quickly demolished.
Listen (or read the transcript) and tell me what you think.
After the main event, there is bonus material! In Part Two, we discuss the recent debt ceiling debate, which was pure Kabuki Theater employed by politicians to make us believe they are serious about controlling spending - which is obviously not true.
Then in Part Three (we just had to cover it!) are some comments on the incredible surge in NVDA and other AI-related stocks, which looks like extreme hype over an important and valuable new technology.
Please enjoy the presentation, smash the “like” button, write your comments, and share with your friends! A slightly edited transcript is attached for those who prefer to read or want to pause over the charts.
Thanks for your support!
HardmoneyJim
June 3, 2023
Great episode, Jim. Thank you! I had two questions:
1. You reference the FANG; MNT stocks as AI stocks. When I look at the list of companies, I wonder why, especially for Netflix. They feel like tech, but not AI, other than Nvidia and Microsoft (via its OpenAI investment).
2. You reference "protect yourself" from these government forces and the unsustainable, long-term consequences of them. My previous notes on related topics show: (a) avoid long term bonds, investments in life insurance companies, and passive investment in stock market; (b) make your cash work hard; (c) own your own home; (d) find value stocks; (e) 10% in precious metals like gold; (f) farm land. Anything else I'm missing?
Thank you!
PS I'm looking forward to the course you are doing this summer.