The Contrarian Investor: BUMP fears and inflation

CONTRARIAN INVESTOR

Among the pointy heads of the investment world, there is still a general sense of foreboding about prospects for 2014 and beyond.

Perhaps the best recent summary of this view is what analysts at CheckRisk call the BUMP feedback loop, which stands for Breaking Unconventional Monetary Policy. Fears about BUMP focus on the way Fed tapering might feed through into a vicious cycle involving currency wars, interest rate shocks, and sovereign debt risk, all ending up with global economic contraction. If you are looking for a less jargon-filled way of explaining these fears, track down David Collum’s magisterial review of events in 2013. Collum is actually a chemistry professor at Cornell, but his acerbic commentary at ...