What If We Run Inflation Hot: Harris Kupperman
"If so, we’re going to catch a whole lot of investors offsides, because no one is ready for a world with accelerating nominal GDP growth."
One of my favorite investors that I love reading and following, Harris Kupperman, has offered up his thoughts macro and inflation heading into the new year.
Harris is the founder of Praetorian Capital, a hedge fund focused on using macro trends to guide stock selection.
Harris is one of my favorite follows and I find his opinions - especially on macro and commodities - to be extremely resourceful. I’m certain my readers will find the same. I was excited when he offered up his latest thoughts, published below.
Please be sure to read both my and Harris’ disclaimers, located at the bottom of this post.
What If We Run It Hot…?
In the spring of 2022, Jerome Powell declared war on inflation. With the benefit of hindsight, let’s question what exactly he declared war on?
Was he upset that the bottom third were finally getting wage increases for the first time in decades? Was he upset that cattle ranchers were earning an acceptable return after years of negative returns on capital? Was he upset that oil firms were rapidly hiring and expanding, reinvesting their profits into new production? Or did he hate that rural lumber mills were suddenly earning fatter margins than the homebuilding executives he met on the golf course? Did he hate that steel prices screamed higher? Or was he mad that long-haul truckers were now making as much as Wall Street bankers. Did Jerome Powell declare war on the CPI? Or did he declare war on fly-over country, and the people who live there?