Cathie Wood responds to Elon Musk flagging the surge in price pressures and says technology like blockchain will 'bend the curve' on inflation
- Technology like
blockchaincould help temper inflation, ARK boss Cathie Woodsaid on Twitter.
- Wood was responding to a tweet by
Elon Muskon the current strength of price pressures.
- Supply-chain bottlenecks and shortages of labor and raw materials have seen a surge in global inflation.
ARK chief executive Cathie Wood is firmly on the side of the debate that believes the current surge in inflation will likely be short-lived. In a series of Twitter exchanges on Tuesday with the likes of Jack Dorsey and Elon Musk, she explained the deflationary forces that will help quell the pickup in price pressures, including the role of technology.
Supply-chain bottlenecks at ports, warehouses and rail depots around the world that built up during the worst of the
Central bankers face a delicate balancing act of curbing excessive price increases without dampening economic growth, which in many cases, is still below pre-pandemic levels.
On Monday, Wood took to Twitter to detail three deflationary forces that will "overcome the supply chain-induced inflation," responding to Jack Dorsey less than 72 hours after he sounded an alarm on rising prices.
Tesla chief executive Musk weighed in. "I don't know about long-term, but short-term we are seeing strong inflationary pressure," he tweeted in reply to part of Wood's thread.
"Inflation has flared in response to COVID-related supply chain bottlenecks and oil supply constraints but, IMHO (in my humble opinion), the powerful and converging deflationary forces associated with
"If they expect lower prices, most consumers/businesses will defer purchases, exacerbating a decline in the velocity of money. Despite the burst in cyclical inflation during the last year, velocity is hovering at low levels. If ARKInvest is correct, the next leg will be down," she continued.
She pointed to the decline in velocity - the rate at which money turns over per year - and how that will also help offset inflation.
"I am struck by the behavior of millennials who, at the margin, are sacrificing short term consumption to pay down student loans or invest in
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