Animal Spirits Podcast Talk Your Book: Hedging the Different Types of Inflation
Jun 6, 2022
Don Casturo, Founder and CIO at Quantix Commodities, brings his expertise in commodity markets to discuss effective hedging strategies against inflation. He analyzes the lasting impact of government spending amidst recession risks and decarbonization efforts affecting oil production. The conversation also covers the complexities of inflation dynamics, the performance of various commodities, and investment challenges in this environment. With a focus on diversification, Casturo emphasizes the necessity for specialized knowledge in navigating the current inflationary landscape.
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Early Stages of Inflation
- Current inflation is still in its early stages.
- Absolute price levels haven't risen drastically from their low base.
Structural Inflation Drivers
- Deglobalization and decarbonization are structural inflationary drivers.
- These trends, unlike falling interest rates or technology, contribute to rising prices.
Decarbonization's Impact on Oil Production
- Oil producers face reduced access to capital due to decarbonization efforts.
- This limits their ability to increase supply, despite high prices and demand.