The Crisis of Inflation with Lyn Alden - WBD509

Lyn Alden is a macroeconomist and investment strategist. In this
interview, we discuss the macro environment. We zero in on the
current inflationary crisis, focusing on the demand/supply
problems with energy, prospects for recession, and the impact on
markets and countries.


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The last time inflationary pressures seriously concerned the US
was the 1970s. The decade ended with inflation at nearly 15%.
Many believe current inflation, real inflation, not the figures
provided by the US Dept of Labor, is at least 15% if not higher.
And yet, we are in a much more precarious position now than in
the period of the 1970s referred to as the “The Great Inflation”.


Global debt is at an all-time high. US government debt is over
137% of GDP. Unprecedented money printing during the global
financial crisis was followed by more extreme money printing
during the pandemic. Most countries are now bloated with debt.
Further, interest rates are still at abnormally low levels.
Economies are precariously balanced. Recession is close at hand.


At the same time, there is an energy crisis. Decades of
underinvestment in energy infrastructure, poor policy decisions,
and geopolitical issues means we have insufficient energy supply
and price spikes. In the UK 40% of households could be deemed to
be in energy poverty soon. There is talk of oil reaching $300 a
barrel.


Then there is an emerging food crisis. The war between Russia and
Ukraine is affecting some of the biggest suppliers of wheat,
sunflower oil, and fertilizer. According to the World Food
Programme 276 million face famine. A cost of living crisis is
hitting the most vulnerable in all corners of the globe.


We are in very uncertain times. History suggests such pressures
fuel populism, protest, and conflict. How should we protect our
investments in such times? What assets could weather these
storms? Who can we trust?