However, speaking with the CNBC’s Squawk box, the Smead Capital Chief Investment Officer shared his thoughts on why the current economy is reminiscent of the 1970s. It was noted that inflation has climbed to 8.3% in the U.S. and may remain near the 40-year highs; however, according to Smead, inflation is not the only issue nor the only reason why this economy resembles the one from the 1970s.
Wolverine inflation
Yet, inflation does play a big part in recessionary fears in the market, which Smead dubbed the Wolverine inflation. In the 1970s, inflation was related to an energy crisis, which is also present in today’s markets, mostly due to the war in Ukraine. There are currently musings among the OPEC countries to increase oil and gas production to make up for Russia’s lack of oil, but nothing has been confirmed as of yet. Accordingly, asked to give his take on the possibility of new oil hitting the markets, Smead opined: In conclusion, the end to the energy crisis seems to be in the distant future if investment professionals like Bill Smead are correct. This would, in essence, mean more pain in the market may lie ahead for investors. Featured image via CNBC YouTube. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
