We Study Billionaires - The Investor’s Podcast Network TIP331: Inflation w/ Cullen Roche
Jan 10, 2021
Cullen Roche, an investment expert known for his insights on Pragmatic Capitalism, dives deep into inflation and the economy's current landscape. He challenges the common notion that money supply expansion leads directly to inflation. Roche discusses strategies to protect portfolios in uncertain times and explores the rationale behind stocks trading at 50x earnings. The conversation also sheds light on the complexities of bond investing and the evolving macroeconomic environment, making for a thought-provoking listen for investors.
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Money Supply Expansion
- Money supply almost always expands long-term due to a debt-based financial system.
- Loan creation drives deposit growth, fueled by economic expansion and demand for money.
Defining Money and Inflation
- Defining "money" is complex; different forms exist (e.g., deposits, gold) with varying liquidity.
- Inflation concerns arise not just from increased money supply, but how it's used and supply chain disruptions.
Investing During Inflation
- Hedge against inflation with globally allocated assets, real goods (real estate, precious metals), and value stocks.
- Value stocks offer more predictable cash flows during inflationary periods compared to growth stocks.