Art Cashin: Key Indicator That Just Spiked Is Huge Warning!
- Art Cashin – Key Indicator That Just Spiked Is Huge Warning!
50-year veteran Art Cashin alerted King World News that a key indicator has just spiked and it is a huge warning. Cashin, who is Director of Floor Operations for UBS ($612 billion under management), also warned “If money begins to change hands rapidly, the risk of inflation rises dramatically.”
Eric King: “There was this call (last week) to print $30 trillion, and at the start of 2011 there was a great deal of coverage surrounding the calls for $100 trillion to be printed. You’ve been around this business for so long, what are your thoughts when you hear those kind of numbers just tossed around?”
Cashin: “They’re stunning. In days past you would never hear numbers like that bandied about. It took us 200 years to get to a certain level in our national debt. It took us something like 20 years to then double that. Then, in a matter of 3 years we’ve quintupled it.
Up until now it has not been a burning problem, and the reason is fear. You have to lend money or spend money to get inflation. That having been said, the Federal Reserve Bank of St. Louis puts out what is called the ‘Monetary Stock.’ It is the ‘raw material’ of the money supply, and it has been dormant throughout the year.
The report for the first part of this year suddenly spiked higher, and it’s something that I’m going to keep a very close look at. It may be, and there is some seasonality, but I think people need to begin watching the money supply, particularly the M2, and see if that starts to accelerate.
If the velocity of money begins to accelerate and M2 begins to move up, then you will begin to hear people talking about or at least worrying about inflation again. That could be the really critical story for the next month or so … (Bond) vigilantes will require some sign that inflation is beginning to show.