The Compound and Friends Zombieland
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Jun 3, 2022 In this engaging discussion, Jason Hsu, founder and CIO at Raliant Global Advisors and finance professor at UCLA, shares his insights on navigating China’s complex economic landscape. He delves into the interplay of inflation and employment, exploring the challenges faced by both emerging markets and corporate giants. The conversation also tackles the Federal Reserve’s struggles with rising interest rates and the implications for global investors. Hsu's expertise provides valuable perspectives on investment strategies amid an evolving economic climate.
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Inflation Drivers
- Markets react to inflation headlines, but current price spikes are due to external factors like war and China's lockdowns.
- These factors won't disappear quickly, regardless of Fed actions, making inflation persistent.
Inflation Types
- External shocks like oil prices are transitory, but their duration is uncertain.
- Wealth effect-driven inflation, like in services, will resolve as money supply and credit tighten.
Policy Recommendations for Inflation
- Reduce tariffs on imports to combat inflation.
- Sweet-talking OPEC into increasing oil production might be more effective than releasing oil reserves.