ART CASHIN: “A Dormant US Inflation Indicator Just Spiked, And It’s Got Me Thinking Of Weimar And Zimbabwe”

In an interview with King World News Veteran trader Art Cashin makes it clear he has been more concerned about the threat of inflation in the U.S. than most analysts. From that interview King World News: 

“That having been said, the Federal Reserve Bank of St. Louis puts out what is called the ‘Monetary Stock.’  It is the ‘raw material’ of the money supply, and it has been dormant throughout the year.

The report for the first part of this year suddenly spiked higher, and it’s something that I’m going to keep a very close look at.  It may be, and there is some seasonality, but I think people need to begin watching the money supply, particularly the M2, and see if that starts to accelerate…

If the velocity of money begins to accelerate and M2 begins to move up, then you will begin to hear people talking about or at least worrying about inflation again…” 

Cashin notes that this isn’t just theory, as we’ve not only seen it before in history, most people know of the most recent notorious experiences: Weimar Germany and Zimbabwe.

“Somebody once asked a famous literary character (who lived through the Weimar hyperinflation) how did he go broke?  He said, ‘Slowly and then suddenly.’  The Weimar Republic saw inflation develop very slowly, and then suddenly.  Once it developed it was almost like Zimbabwe except it was in a major nation, and destroyed the moral values of a whole civilization and basically led to the underpinnings of World War II.” 

….read more at KingWorldNews HERE