Mohamed El-Erian appeared on Hidden Forces, a great podcast by Demitri Kofinas. But instead of challenging consensus narratives or thinking critically about the power shaping our world El-Erian obfuscated and misdirected Kofinas and the audience about economics, the Fed and history.
------EP. 193 TOPICS------
00:00:00 INTRO: Reviewing Mohamed El-Erian's appearance on Hidden Forces with Demitri Kofinas.
00:00:56 El-Erian claims the Federal Reserve has made a "policy mistake" in three phases.
00:02:12 El-Erian: the economy's problem is not insufficient demand, but insufficient supply.
00:04:43 Snider: the supply of goods was inelastic during the 2020-21 covid and shutdowns.
00:06:10 El-Erian: the Fed made a mistake in calling consumer price increases "transitory".
00:08:32 El-Erian: the Fed's rate hikes will be too much for the economy to handle.
00:10:21 El-Erian: labor shortages is proof of a world of insufficient supply; not enough workers.
00:15:15 El-Erian: QE helps keep asset prices elevated through psychological, behavior forces.
00:23:39 Kofinas: Why doesn't the Fed factor financial instability into its actions?
00:25:53 El-Erian: the Fed stopped tightening monetary conditions in Q4 2018 because of stocks.
00:35:45 El-Erian: the market has noticed that we are missing market liquidity.
00:40:35 El-Erian: the 1970s Great Inflation began with an oil shock, expanding from there.
00:43:45 El-Erian: supply shocks can kick off (monetary, persistent and pervasive) inflation.
00:45:47 El-Erian: adaptive expectations in the private economy can lead to inflation.
00:47:15 El-Erian: in the 2020s we are following in the footsteps of the 1970s.
00:51:31 El-Erian: the marketplace is pushing the Fed to increase rates 5 times in 2022.
00:54:01 OUTRO: Check out Demitri Kofinas and the excellent Hidden Forces podcast.
----EP. 193 REFERENCES----
Hidden Forces: https://hiddenforces.io/
Demitri Kofinas: https://twitter.com/kofinas
Mohamed El-Erian Episode: https://bit.ly/3poVQ7f
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---------THE TEAM---------
Jeff Snider, Head of Global Investment Research for Alhambra Investments. Master of ceremonies, Emil Kalinowski. Illustrations by David Parkins. Audio and video editor, Terence. Episode intro/outro music is "Hong Kong Story" by Lazer Boomerang.
------FIND THE TEAM-------
Jeff: https://twitter.com/JeffSnider_AIP
Jeff: https://alhambrapartners.com/author/jsnider/
Emil: https://twitter.com/EmilKalinowski
Emil: https://www.EuroDollarEnterprises.com
David: https://DavidParkins.com/
Terence: https://www.VisualFocusMedia.com
Lazer Boomerang: https://www.facebook.com/lazerboomerang/
Lazer Boomerang: https://soundcloud.com/user-14207639