Odd Lots Viktor Shvets on Inflation and How Crypto Could Cause the Next Financial Crisis
May 10, 2021
In a compelling discussion, Viktor Shvets, a Managing Director at Macquarie, shares his insights on the future of the economy amid inflation concerns. He expresses skepticism about a prolonged inflation surge and highlights intriguing disinflationary trends. Shvets warns that the next financial crisis might emerge from the explosive growth of cryptocurrencies, challenging traditional market dynamics. He also explores the impact of recent monetary policies, the aftermath of the pandemic, and the evolving nature of fiscal management.
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Transitory Inflation
- Short-term inflation will rise due to base effects, recovering demand, and supply bottlenecks.
- However, long-term disinflation is more likely than sustained inflation.
Outdated Frameworks
- Current economic models are outdated because they rely on an industrial-age framework.
- Today's economy is driven by intangible assets and a fluid labor market, making capacity constraints less relevant.
Impact of Fiscal Stimulus
- Fiscal stimulus has a lower multiplier effect than expected, especially when directed towards speculation or debt repayment.
- Current fiscal policies mostly address exceptional circumstances or long-term projects with disinflationary effects.