In one sentence: A rerun of 353 from January 2022. After a long opening about Swiss banking and homing pigeons, it is the same money-supply and inflation discussion, so read 353 for the content.
Key ideas
- Same conversation as 353. The Fed's job, money-supply growth (M1, charted on FRED), supply bottlenecks and whether inflation is temporary. [10:00–24:00]
- The opening is the only new part. About ten minutes of banter on Switzerland and money laundering, phone surveillance and a failed homing-pigeon experiment in the Grand Canyon. No investing content. [00:00–10:00]
- Dated figures. Phil's M1 numbers ($4 trillion to $20 trillion) and Berkshire's "7% a year" are as of early 2022. The Fed changed the definition of M1 in 2020, which accounts for much of that jump, so check FRED before repeating them. [14:00–18:30]
- Part 2 continues the topic in 354. [24:00]
How it maps to RuleOne
See 353. Inflation reaches the screen through pricing power and discount rates; the macro view itself is not a screen input.
Buffett, Munger and Graham links
See 353.
Words to know
- M1: a measure of money supply, cash plus checking-type deposits (and savings since 2020).
- FRED: the St. Louis Fed's free economic data site.
Try this
Search "FRED M1" and look at the chart, noting the 2020 break in the series. Then find a company on /stocks/ that raised prices without losing customers.
Check yourself
- What is new in this rerun?
Answer
Only the long opening banter. The rest is episode 353. - Why is high inflation hard on cash savers?
Answer
If savings pay 1% and prices rise 7%, you lose purchasing power every year.
Short quotes
None.