The salon hosted by Sally Jo Button was an excellent forum to discuss the global macro economic environment. It was a robust discussion that included thoughts on the European debt crisis, the China question as it relates to a potential trade/fx war and the effect these may have on our markets.
My input focused on the issues of monetary policy, expanding M2 money supply the potential for inflation and how to approach the asset allocation dilemma with an uncertain outcome with regard to the level and direction of inflation.
With all the hype, inflation is only 1 of a few scenarios that include deflation. These will have a massive impact on asset valuations and many financial ratios. I will be producing a piece that addresses the various roads ahead and the impact on asset allocation decisions.
Tom Koehler