CNBC/Elizabeth Gurdus/12-28-2016
“‘We’ve got a year coming here where the labor price pressure is pushing though into product prices [and] inflation numbers are up. That’s why you see the bond yields up, because inflation’s coming around,’ said Rutledge.”
MK note: Former Reagan economist John Rutledge details an opinion very similar to what we expressed in a News & Views Special Report published earlier this month titled “Trump, Reagan economies at polar opposites.” If you read that Special Report and thought the argument had some merit, you will gain from the first-hand details provided at the link above.
Rutledge expects a strong performance from real estate under the circumstances, and in many places it is already appreciating. Real estate did well under the economic conditions that preceded the Reagan era, and, for the same reasons, gold and silver also did well – in fact, spectacularly well. We cannot know with certainty if inflation will actually take hold in the economy, but if it does, hard assets will be just as much at the top of investors’ wish lists as they were in the 1970s.
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