Tuesday, May 26, 2015

And Inflation is now...

MAS has just released the CPI data for Apr 2015.



CPI is at negative 0.5% y-o-y.
Core Inflation (ex accomm & private transport) is a paltry 0.4% y-o-y.


So just how scary is the inflation monster these days? Getting less and less scary I suppose.

That also means that the "cost" of holding cash is getting less and less expensive. Get what I'm trying to imply?

I suppose this means we should all invest in stocks now, since the economy is "picking up" and "rates are going to rise". That all means even higher-er stock prices, right? Better yet, buy negative yield soverign bonds! I mean, pffft, what could possibly go wrong?

2 comments:

  1. About the foreign bonds, their currency could devalue against S$ and you will be really underwater then. There's also the risk of default.

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  2. He is just being sarcastic - his "buy negative yield bond" means to pay the bond issuer interest after buying his bond rather than the other way around.

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