I can tell by the comments and emails I get, the question of inflation or deflation is number one issue occupying most people’s mind - as it should be. The question of inflation or deflation is one of politics. True “free market” capitalism is deflationary. By it’s very nature it seeks to keep input costs low, including wages. My argument is the politics is shifting left globally, and this is inflationary. I pointed out that rising 30 Year JGBs is one thing that I look at as confirmation.
Even though the Japanese bond market is (was? BOJ owns most if it now) the largest bond market in the world, few people trust it like I do. So for traders, and other market participants is there something else we can look at? Well there is one other measure I quite like.