Why There Will Be Global Stagflation

According to Fortune, evidence suggests that growth will slow and inflation will continue to accelerate, regardless of whether commodities back off their highs.

Contrary to popular bullish global growth estimates, global inflation trends in Asian economies like China, Indonesia and Thailand are seeing companies pass price increases along to consumers to take advantage of global growth trends. However, the U.S., China, Japan, India and Brazil are just a handful of the many major economies with consensus growth forecasts for 2011 which are too high in relation to the models against a backdrop of accelerating inflation and higher interest rates.

Key to the argument is the fact that, even if commodities were to back off their current highs, it's very possible that global inflation readings will continue to accelerate because corporations will use the growth estimates to justify passing the last two quarters of price inflation along to end-customers.

With consensus figuring out the inflation component, the task at hand is to figure out how to time the uncovering by consensus of the bearish growth factor on the short side of equities.