A dirge too soon
Article Abstract:
Inflation has caused problems for investors in the two decades to 1996. Equities are seen as protection against inflation, since companies can raise prices. Zero inflation does not permit dividends or capital to grow by much. Yields rise, or prices fall, in response to a drop in growth rates and returns. Government securities are a better investment when inflation is low. Markets are not convinced that inflation has disappeared, and this means that equities and index-linked government securities will perform well, since they are thought to resist inflation better.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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Separating the wheat from the chaff
Article Abstract:
Grain and petroleum prices have risen with rising demand and lower stocks, though grain prices fell following favorable weather forecasts, and petroleum prices have dropped in spring 1996 as consumption has dropped. Demand for industrial commodities could lead to higher prices, but it is unclear whether this will affect inflation. Rising commodity prices were previously offset by cutting labor costs, but both labor and commodities could fuel inflation, according to Stephen Roach from Morgan Stanley.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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Commodities: cycling up?
Article Abstract:
Commodity prices may rise in 1996 as they did in 1994, and this could lead to inflationary pressures. Commodity prices account for a small part of total prices in the US, according to Kleinwort Benson, and Goldman Sachs also sees little danger from commodity prices for inflation in developed economies. Goldman Sachs forecasts a rise in commodity prices but some analysts argue that petroleum price rises may not continue in 1996.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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