Tradefair & Financials
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Deflation
Deflation
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naw just 7k yesterday.I missed the main downdraft in the euro
 at 1.33.12 this morning the euro seems a bit low for today.Going long as it heads back to 1.34. magnificent week with the volatilty. Can't wait till Spain goes on the doomsayers radar and all the ups and downs it will create.  gonna be a great christmas![:D] |
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I will just list my predictions now. Whether you agree or disagree that is fine by me.
1. The USA will experience hyperinflation by 2013 due to people around the world losing faith in the US dollar. I believe this will be caused by China publicly announcing they are going to stop buying US treasury bonds after the USA injects another few doses of QE. Now, I must admit my theory is mainly based on analysis by the National Inflation Association (inflation.us). Although some doubt their motives and they can't be trusted 100% they have predicted so much which has come true and they really do seem to know what they are talking about. Their theory also fits in with my own research. 2. Oil and commodities, and especially food and bottled water will skyrocket in price. This may go without saying due to my above point but I think this will happen and will lead to oil producing nations demanding payment in other currencies or gold for their oil. Major deals around the world are already being done in alternative currencies as people begin to lose faith in the dollar. 3. The value of non essential assets will fall. When people cannot afford the basic human needs(in order of importance: water, food, heat and shelter) they will do anything to get it. When paper money is worthless people will be selling their houses and cars etc for whatever they can get. I'm expecting house prices to crash. 4. Every major currency around the world will get a temporary boost from the dollar collapse before going to zero as people begin to wake up to the fact that paper money is NOT a store of labour or value. It's based on faith. That is why you can buy a 3D tv because the person/business you give those notes to believe they can buy things with them. When people lose that faith your notes will be worthless and that is how hyperinflation will occur. What difference is there between a ten pound note and a 500 monopoly note? The ten pound note can buy something because people have faith in the currency. They are essentially the same. |
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good on you J2!
 your one of the very few people here who is willing to make an argument for his point of view.I salute you. nowhere do you mention you have a superior education or that those disagreeing with you are morons.Double salute!!! The hyperinflation argument you put 4ward is an interesting one.However I was watching cnbc yesterday, the UK edition and the guest there was arguing that QE will leave the world relativly unaffected as 1.It is in part replacing wealth that has dissappred and 2.The US govt has the option in the future to buy back its bonds, thus mopping up the excess liquidity, should there be any. It was a persuasive argument.I can't predict how it will play out but I'm betting that actions will be taken in one form or another to avoid hyperinflation.The govts of the developed world are simply not sufficiently disfunctional to allow it to occur. The apocalypse secenario in point 3 simply won't happen.I was reading this kind of alarmist rubbish a few years ago, each year they predict this is "the year". World population will need to double from here to get into this situation.People were building bunkers in the 60's to hide from nuclear holocaust,Never happened. btw, Exited the euro this morning at 133.60  the 3D tv is overrated! Theres too little 3d content. |
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Mr Bean says: "I was watching cnbc yesterday, the UK edition and the guest there was arguing that QE will leave the world relativly unaffected as 1.It is in part replacing wealth that has dissappred and 2.The US govt has the option in the future to buy back its bonds, thus mopping up the excess liquidity, should there be any.
It was a persuasive argument" That's the problem when you get your education from watching CNBC. It was a rubbish argument, not a persuasive one. First, real wealth DOESN'T just disappear, it may change hands but it doesn't disappear. Even with declining assets values like housing for example, NOTHING disappeared because the soaring values during the bubble years were NOT real. It was paper wealth that was falsely inflated in the first place. The market of wealth redistribution is a zero sum game, NOTHING just disappears unless you believe that rabbits just appear and then vanish out of a magician's hat. Second, the FED has no exit strategy. The USG cannot "buy back it's own bonds" when the FED is printing money to totally finance USG spending at the moment and the foreseeable future. That's the problem when you go down the QE road, there's no coming back. The FED is now the largest owner of USG debt, bigger than China or Japan. In other words the USG is lending money to itself at the fastest rate ever. Where's the exit strategy? The USG spends over $2 for every $1 it brings in and owes anywhere between $120-$200 TRILLION dollars (depending whose estimate you want to believe) if you include unfunded liabilities like Medicare, Medicaid and Social Security. So, how in the world is the USG going to be in a position EVER to buy back it's bonds? Go back to sleep, it's the only time it seems you do anything worthwhile. |
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Thanks for the reply. What is the 3d football like? I'm yet to see it!
To answer 1-2 of your points, quantative easing is effectively printing money IMO. The fact that the fed is buying 94% of US treasury bonds tells me that the US is rapidly running out of creditors and will have to turn to the fed more and more until they are effectively printing money to cover their deficits. Bernanke swore under oath that he would not monetise the debt but I believe the only way for America to repay their debts is to inflate their currency. There are some scary stats out there for the amount of Americans on food stamps (43% I believe) amongst other things. Unemployment will rise and soon the fed will act again to tackle deflation (their excuse). This will, IMO, anger the Chinese so much that they will announce they won't be buying anymore and they have cleared their dollar reserves into hard assets as they are doing as we speak! As for my third point, you make an interesting comment and I hope you're right and everything will get sorted but I can't see it. We've already seen during the great depression how bad things can get and also in more recent times we have seen the economies of Argentina, Zimbabwe and North Korea go to the wall. Just because we are privilaged westerners we are not immune and all fiat currencies eventually fail. America's last currency, the Continental failed when they started printing it during the revolutionary war and that is why there is a gold and silver clause in the US constitution. A clause they have chosen to ignore and they will pay the price. |
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43 million (under 14%) on food stamps not 43%.
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Thanks charlatan, reading it back that was a silly typo! That number is still so huge it doesn't really change my opinion.
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Do yourselves a favour and spend time to understand how the American housing bubble was created and how it's bursting in 2007 will take the global financial system down with it, it's only a question of time. The global banking system gorged in MBS and CDO derivatives sold by the US IH's in search of yield and those instruments will continue to blow up with further downgrades in the US housing market in 2011-12.
Chris Whalen is an ex-FED board member and an authority in the US financial system. You can follow his missives on the Institutional Risk Analysis website and his upcoming book is not to be missed (I read an early draft that Chris circulated for feedback). In essence, Chris's position is that all the major US banks are technically insolvent absent of mark-to-fantasy FASB rules and advocates the take over and resolution of Bank of America by the FDIC in an effort to prevent a disorderly collapse. He also argues that the dire condition of State and Municipal finances in the US will necessitate more money printing from the FED. If you have an interest in global economics, give yourselves the best possible Christmas present: http://www.rcwhalen.com/inflated.asp |
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I shall preorder that book, thanks!
What is your opinion on the UK housing market? |
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J2BLUE, I'm a Senior Director in a London based boutique M&A firm. My area of responsibility is the US market. My exposure to the UK housing bubble and the ensuing issues is only as deep as anyone's keen interest in all UK financial matters. I think someone like chisel may offer a more insightful opinion than mine since I think he is directly involved in the real estate business.
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wowoww dow up 245 points.USA inflation looking like less than 2%
melanus- your going well Menelaus Date Joined: 03 Feb 05 Add contact | Send message When: 26 Nov 10 19:38 J2BLUE, I'm a Senior Director in a London based boutique M&A firm. My area of responsibility is the US market your area of responsibilty is the US market? righto.What do you spend all day doing? twiddling your thumbs? your the senior director of delusion. did i mention that gold is back to 1390? wonder when we are going to hit that 800 mark[smiley:crazy] where is your boutique firm located melly? At the local meth lab?[:(] your going so well I have tears of laughter rolling down my face re- reading your catactysm attitudes. all is not lost melly, you can repent and come over to the side of the winners.Remember to chant at night before you go to bed "the fed is good, the fed is good". Then again, you may as well stay where you are.The train should run over you soon enough. Enjoy, Your disgraceful friend Benny ps. I need the AUD to get back over 97 to get back into the profit zone. |
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Another meaningless rant from Mr Bean.
Mr Bean, my advice to you is one. Don't ever pinch yourself. You might wake up and stop making money. Have you bought "Basic Economics for D.ummies" yet? It just might teach you how money gets created or what hyperinflation really is. Then again, perhaps I'm hoping for too much. To describe you as clueless is an insult to all clueless people out there. |
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dow up another 108 points.Looks like a slow slow day for you at the lab melly.
tried to buy economics for dummies at borders yesterday.Not available- I asked why not, they did a computer search and informed me that " a London based boutique M&A firm " had purchased all the available copies worldwide. aussie d 97.64 this morning, think I will cash in. Its nice to be clueless. All my Love Benny. |
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Impressive stuff from you again, Mr Bean. Making money in their sleep is something only a few very gifted people are able to do.
Remind me again, how is money created? |
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It will all crash 2011-12 imo, usa unemployment was up at 9.8% today and stock market takes it as good news as it means more printing of money and tax cuts for all, this is perverse and cannot continue for much longer.
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Conceptually you are right Pierre. Unfortunately however Rosenberg, Janjuah and Edwards have been saying "cannot continue for much longer" for the last 1 1/2 years now.
As long as the money printing continues unabated (in other words the bond holders are not revolting), this game CAN go on forever. The minute bond holders revolt, the game ends right there and then. Place your bets. |
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i think you finally give yourself the right reply, menelaus. but i need to twist your argument a little.
for sure, there will be one moment where bond holders will suffer. but not as a result of hyperinflation, but as a result of massive haircuts on their redemptions and defaults. if you ask me, that would be even a fair result as bond holders are "wealth" holders and a redistribution of wealth in this planet is more than welcome. and im not talking about east/west or north south. not even poor/rich. it s a matter of young vs old generations and we cannot afford to have a planet divided into 2 categories, one that is got everything ( houses, jobs and guaranteed pensions -read "bondholders"- ) and another that is crashed by the massive amount of debt accumulated from the previous and as a result of that is struggling to find jobs, will never be able to afford a house and a pension scheme. just watch the student revolts these days, in the uk and other parts of europe. we probably read it in the news in our glasstowered offices, or from the comfort of our sofas at home, and we dont realize the massive burden these guys feel hanging over them. just watch out when the real paupers of this world wake up and revolt too. but political rants apart, the game will end up with destruction of money and stored wealth. which will kill demand, and will make older generations/western populations finally be forced to save and work harder. the result will be likely to be an even more deflationistic situation! you see, the fact is that all money related matters are demand driven and not supply driven. theoretically you can have deflation for centuries with a massive money supply, if people kill their demand ( and they will, when they ll realize they dont have a pension anymore ). and you could have hyperinflation even with a very narrow money supply, at the end of the day - as you say - if you dont trust a piece of paper you dont trust it wheter there are 100 or wheter there are 1000 of those in your wallet. your analysis is too centred on a revolt of people with wealth who will want to change the rules of the game, who will decide that money is worth nothing and only gold is a valid way of transacting, and so on. in your own words, you believe bond holders will revolt. actually, no chance. it s the bond debtors who will revolt and change the rules. but this is typical of the rich classes to always think they can decide the changes, but in history revolutions have always been forced from the bottom. this time around, not heads but portfolios will roll, but it s not the marieantoniettes of this world who will decide what/where/how. and no offence, but you, wykha, billgross, i will include even myself for par condicio, we are all closer to marieantoniette :-) finally, to avoid that any serious conversation becomes a personal feud of one poster vs the other, remember that mrben and you are speaking different languages. not only, you re even talking about different things, no wonder you keep throwing handbags at each other. mr ben is an annoying, vain and rudimentary day trader ( and probably with a bit of a complex, else he wouldnt feel the need to brag every day ). while you re a philosopher who thinks about grander things. problem is, grander things shouldnt distract you from the minutiae that drive investments up or down. getting married to the idea of hyperinflation and end of the financial world could have costed you and like minded people a lot of money the past 2 years, in terms of real losses and mainly in terms of missed opportunities. while reading the right signals and a good sense of timing could have made the mrbens of this world a lot of profits. so in a nutshell, i would definetely read a book from you - you actually have a great writing style - , but i would probably end up giving mrben some savings to manage. you guys all enjoy the weekend jw |
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There too busy shifting the blame onto the Euro for people to acknowledge why the dominos are falling in the order they are. Spain will go in late 2011/early 2012 and from that point on it's a ticking time bomb, the stock market will start declining then and by 2013 we'll have the Lehman event we can't avoid.
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JW, long post, interesting but a few inaccuracies.
I've have been posting on these forums for a long time that "deflation is a myth". That doesn't make me a hyperinflationista. Although with the direction the FED, ECB and the BoE are taking us (especially the all powerful FED), the chances of a hyperinflation scenario are getting better with every passing day. In a fiat monetary system where "money" can literally be printed/created out of thin air, deflation cannot nor it will be allowed to occur. Gold, Oil and other commodities pricing is screaming inflation, supply/demand dynamics be damned. The only asset "deflation" occurring is in housing which grew to grotesque bubble levels to begin with. It's deleveraging, not deflation, that's occurring and has totally been misinterpreted by the deflationistas. What are these "missed opportunities" you speak of? I've been an inflationista from the outset. I was right, all you have to do is care for a wife and two daughters to know how much inflation there is out there, not the government massaged CPI number. If you were an inflationista, long commodities was the play, and it turned out to be right. I've long gold (as you know) for a long time. I was right, it's the only insurance against central bank madness. I've been long US equities since the FED showed their willingness to QE to infinity (so will the ECB, they have no choice, German objections not withstanding). I was right, the S&P increased in nominal terms but not in real terms when measured against gold, but commodities are still priced in the USD, not gold. So I don't need, nor do I like, to trade the 5 minute chart to make money, just understand and follow the big picture. Now, if I could only learn how to make money in my sleep like Mr Bean, I'd be all set. |
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johnnie walker,
What do you mean by "getting married to the idea of hyperinflation and end of the financial world could have costed you and like minded people a lot of money the past 2 years, in terms of real losses and mainly in terms of missed opportunities" Why? Those worried about hyperinflation will have bought commodities, gold, shares and are quids in. What have they missed out on? |
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exactly rollo. thats exactly why i wrote 'hyperinflation AND end of the financial world'. and thats why i mentioned the word 'married'. and the word 'could'.
am i the only person here to read all the words in a post, all the posts in a topic, and potentially even all the topics by the same contributors? gold is up, shares are up, banks shares have trebled( and financial conglomerates shares ), dollar is up , treasuries are up, and so on. 2yrs ago if you read some experts ( some of which today have almost done an 180degree turn ), the spx should have traded at 200, goldman shares ( read: boa, ge, whatever ) shud have traded at 5cents, the dollar shud have been worth less than toilet paper and so on. he who has ears to hear.. ps. shud the world financial system implode, no asset will be spared, wheter a commodity a currency a pension or a share. |
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Dollar is up ?!?!?!
JW, remind me again, wasn't it you who posted the (in)famous post "there's no inflation in sight for at least 5 years"? Talk about missed opportunities............ |
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JW, nice post.You made some very valid points. Like me you tried to point out to melly that his idealogy of adhering to a fixed idea is flawed.Dont waste you time JW- the guy is incapable of entertaining an alternate point of view.
melly's usual retort"please remind me blah blah blah '' you were particularly perceptive to point out the "missed opportunities " It is to be expected the plebs even need this to be explained to them. you were going so well JW until you chose to issue this one "mr ben is an annoying, vain and rudimentary day trader ( and probably with a bit of a complex, else he wouldnt feel the need to brag every day ). while you re a philosopher who thinks about grander things. as the author nassim taleb would say " "you never win an argument until they attack your person " having won the argument clearly I conclude that it is a waste of my time to interact with those who are not listening. The entertainment value has waned. We can fully expect mellys banal reply I'm certain. |
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one reply each, then we can move one hopefully, with no bad feelings and a better opinion of each other!
for menelaus. the dollar started this crises roughly at 72 on the dixie, i m talking start of q3 2008. last time i saw it, was almost at 80. or maybe we forgot that cable was at 2.10, euro at 1.60..(but even commodity ccies were stronger, cad was in the mid 90s, nok was at 5.0, only the aud and the nzd are roughly at same levels ) still, the point i was trying to make, and a more relevant food for thought, is that the dollar held very well in such a 'risk-on' enviroment, remember all carry trades are funded only in usd since at least 3/4 yrs ( used to be the yen beforehand ). depurated from the risk-on factors, the dollar has performed incredibly well, and very much against most people predictions. in other words, if you were running an algorythm to trade the dollar index vs the spx, you would have had to skew your model heavily with a 'strong dollar' signal. or ,still in other words, the world has -somehow surprisingly, i admit- not lost an inch of faith towards the dollar, and in fact increased the bullish bias towards it. still, to reinforce the point i made about 'staying married to an idea', i think i even posted in this same thread that times could change on the dollar, if they dont plan the withdrawal properly, it s on the previous page. on the inflation side, yeah i remember challenging your idea of hyperinflation, trying to bet with you that the cpi would have been lower than an average 3.5 or 4% per year ( i refuse to call hyperinflation anything above that, or a high inflation anything above what we got used to in the 2005-2008 period ). in the uk we saw it dropping from 5% to 0% to be back at 3% and that after 225bio gbp of qe, while in the us we have the lowest cpi growth in the last 20yrs regardless of 2 trillion (2,000,000,000,000!)of qe. i might remind you as well that qe wasnt even in the mind of god at the time of our chat, i dont even want to imagine what the inflation wd have been without it. and we all know that the official statistics are flawed as they dont take into account the composition of a life-based basket, where house prices ( and mortgage rates )and other big expenses -cars, electronics- would have a much bigger weight. else the inflation rate would be barely flat. remember: you said, correctly, that hyperinflation is not a monetary phenomenon. thing is, actually even inflation, as it s got very small to do with supply of money, and most to do with demand and spare capacity and output gap. for mrben you are actually vain and a bit annoying ;-) , with your bragging of every profitable trade you do. personally i have no problem with it, most traders are arrogant and it s almost a part of their persona, to give them confidence. as long as - on the contrary - doesnt reflect a sense of insecurity. the rudimentary bit is because you dont trade macro or technicals but you seem to enjoy scalping mainly. why not, still impressive and all, but definetely not sophisticated. you cant argue with that and trust me it s not meant to be offensive or supponent. good luck to both of you and happy week at work. |
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JW, I always enjoy reading your posts although there's a lot we disagree
Mr Bean, your posts have high entertainment value, but beyond that they pretty hollow I'm affraid. Sorry, but that's the way it is. Your are economicly "deaf and dumb" and it shows. |
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Harsh!
Menelaus, HYPERINFLATION is not happening. The profits being made by the worlds top companies are no longer being returned to shareholders in the way theyu were in the past. Companies as well as banks and the public in general are hoarding their cash. Yields are down on everything, and that is why we are not going to see any big jumps in inflation for the forseeable future. Certainly not any hyperinflation! Teh behaviour of every organisation except CENTRAL BANKS is highly deflationary. I can not see the beahaviour of governemnts, Banks, Individuals or companies changing for teh forseeable future. Get used to LOW interest rates for a longggggggggggggggggggggggggggg time |
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chisel, get a clue !!!!
Inflation is a monetary event, hyperinflation is not. When are you and Mr Bean going to understand that? There's huge inflation out there NOW but obviously you are fixated with the way the government measures and reports inflation (which intentionally grossly understates REAL inflation). Have a look at inflation in the real world and get a clue: http://www.caseyresearch.com/editorial/3791?ppref=ZAC175ED1010A Low interest rates for a long time you say?!?! Really?!?!? Have a look at the 10YR UST and get a clue: http://finance.yahoo.com/q/bc?s=%5ETNX&t=3m&l=on&z=l&q=l&c= And finally, repeat after me, "hyperinflation is NOT huge inflation, it's loss of faith in the currency"........AGAIN.......AND AGAIN......may be it'll sink in. |
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http://www.youtube.com/watch?v=2N8gJSMoOJc&feature=player_embedded
The above video is from the National Inflation Association and I reccommend that you watch it to see how hyperinflation could come about very quickly. For those that aren't familiar with their work, they are predicting hyperinflation and are VERY bullish about gold and silver so you can make your own minds up whether they are true predictions or just what they want to happen. I should point out, they have a very good record when it comes to predictions on the economy. |
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been away for a week.Did I miss anything?
I see melly is still busy telling all and sundry they are uneducated idiots, on this and other threads. still quoting this article and that, this "expert" and that one Nothings changed there.Lot of words and nothing to say.Bit like a yapping chiwawa. .pierre started this thread on nov 12.Here we are a month later and guess what, the euro is up a couple of cents, gold hovers around 1400$ and hyerinflation well I think it just passed alpha centauri on its way thru the galaxy. Not a single claim by melly has come to pass or even cracked a mention in the real world.Just in the lab it seems. J2- utube?? please. Your better than utube J2, come on. You know its mostly cut and paste vids by 12yo's and fanatics on utube.You know that dont you.Please tell me you know that. |
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Mr Bean, remind me again, how is money created?
I was hoping you were taking advantage during your week off to read "The Complete Idiots Guide to Economics 101". Apparently not, you seem to have an aversion to reading, I think it hurts your pea-sized brain too much. |
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Menelaus
Sorry, but I simply do not agre with you . Is that so difficult to understand?? You have been harping on for years about real inflation and how it is so much higher than what is being recorded. It is absolute garbage. Inflation is above target, but that is it? In the States they are struggling to keep figure clos to target and in Eurozone it is also very low. There is speculation about th Euro etc, but there is no way enough negative sentimemnt for faith to be lost in one of the big currencies. Do you actually understand the definbition of Hyperinflation, and do you know of any similar situations in teh history of teh World where hyperinflation has happened?? Absolutely not, the World , IMF World Bank , ECB , Fed , BOE, teh Japs are ALLL IN THIS TOGETHER |
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chisel, get a grip.
I know you don't agree with me but screaming "no inflation" on this forum in the face of all the evidence to the contrary is damaging whatever little is left of your credibility. Here are the facts: Oil is at $89 a barrel, up 21% in the last year. Gold is trading around $1,400, up 23% in the last year. Silver is trading around $29, up 66% in the last year. Copper is trading at 4 per pound, up 26% in the last year. Corn is trading at 573 a bushel, up 49% in the last year. Soybeans are trading at 1,300 a bushel, up 23% in the last year. Wheat is trading at 779 a bushel, up 41% in the last year. Pork is trading at 104 a pound, up 23% in the last year. Beef is trading at 106 a pound, up 28% in the last year. Cotton is trading at 130 per pound, up 78% in the last year. Sugar is trading at 29 per pound, up 32% in the last year. Coffee is trading at 205 per pound, up 40% in the last year. Double digits price inflation is already here and if the bond market forces them to up the interest rate, the gates of the hell will open up. Or, have you missed what's happening in the US bond market lately? As to your question about hyperinflation happening before you can start with googling Rudolf von Havenstein. Bernanke is following the same path. |
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hey chisel, hows it going?
look dont bother with melly.This guy has probably one of the most closed minds Ive ever seen on any forum.What makes it worse that his view is alarmist fantasy.Pure fiction. Add to that his propensity to endless insult anyone who disagrees with him makes him boorish into the bargain.And he disagrees with everyone. Tease him, berate him, go soft on him it makes no difference.He's a candidate for the economists asylum. I have no doubt this guy spends his time doing google searches to look for skewed articles to back him up.What he doesnt see is the manipulation behind those articles to create trading situations for the big boys.His mind is totally closed to the possibility. Much of what he is spewing out does not currently exist and the probabilty of it is very low.The only interesting thing he has posted is his latest post of the commodities price increases. I will wager that at the same time next year that list will have plenty of negatives results on it. Chisel, just keep making money and enjoying it, let melly stew in his own putrid juices. Cheers Benny.  |
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ok menelaus, but you know these increases are not ( and wont be ) exactly reflected in the ppi and cpi the world wide.
ask yourself, did we see inflation at -80% in 2008 after oil dropped from 150 to 30$ per barrel? ( same for copper, zinc and the rest ) exactly.. it s misleading to consider these increases as meaningful. why? you replied to this question many times and im surprised you forgot your own reply. commodities these days ARE currencies. used to be the case only for gold, maybe silver. but now investors and traders alike diversify much more. a sign of a more complex ( or sophisticated ) approach to portfolio theory i guess. at the end of the day an ounce of copper is a store of value a much as an ounce of gold. it s not by chance that all these commodities in AUD or NZD ( the producers ) are actually much flatter. now we need to understand wheter these increases are going to be permanent or temporary, of course. and we need to understand the micro behaviours of the market operators. if investors are parking money into commodities as 'safe haven', the higher costs cannot be passed down the line. at the end of the day producers will be squeezed, margins and profitability will have to drop, retailers will have to suffer, but you wont see a 30% increase in prices unless you see an increase in buyers available income. you know my point of view, it s all a matter of 'demand' of goods, not of supply of money. cotton is higher? zara wants to increase their prices? they wont, as people will not buy their shirts. same for coffee and starbuck, beef and mcdonalds, wheat and pizzaexpress. they all know the end users wont spend more than what they have in their pockets to finance someone elses insurances agst (irrationale) fears. pizza express, mcd, they all going to have to learn and deal with thinner profits, and higher productivity in other areas ( cuts in labour costs, pension benefits, words that are very fashionable in these days political discussions). we have actually a proof of this scenario if we observe the uk market and the GBP from second half of 2007. EURGBP was in the mid 60s, and rose by as much as 50% within 15months. Agst the USD the drop was of similar proportions. Still, in 2008 we had the lowest reading since records begun for rpix! simply, bmw, zara ( again, lol) all the exporters had to lower their margins ( maybe financed by bigger margins in the countries where the ccy was actually strong ). one last observation, about the treasury. it s been dropping and the rates in the us have gone up. but this happened because of stronger than expected readings in most of the latest statistics ( dallas, empire, chicago, michigan, napm; ism, retail sales; cpi ). proof is the fact that the dollar is actually enjoying a rally ( agst procyclical AND agst carry ccies ). but you normally dont have a rally in the usd when inflation fears are creeping. at the same time the spx is up 3% in the month and is looking more and more likely to finish with one of the strongest q4 performances that we can remember. so, although of course we cannot rule out anything at this early stage - of the recovery for someone, or of the collapse for someone else - the most likely thing that is happening in the us asset market is the classic sell bonds/buy stocks that go through when people feel more optimistic. sounds crazy even to me, trust me, but i wouldnt read anything more sinister in it. jw. |
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JW, as usual, I beg to differ. We just have to accept that we have a different view of this situation. The "recovery" that you mention has more to do with fabricated government statistics and the fact that the FED has pumped trillions into this failing system than a real sustainable recovery. Unemployment in the US is NOT coming down any time soon, their housing market continues to deteriorate which means continued huge issues for their banks and the FED (the FED balance sheet is looking uglier with every bip uptick in mortgage rates), foreclosure issues still haven't be dealt with (who holds title?), State and Municipal bankruptcies are looming (expect a new round of QE as the FED bails them out too) and their banks are still hoarding cash because they know they are technically insolvent. And don't even get me going on sovereign bankruptcy issues in the eurozone. There can not be real and sustainable recovery until these structural issues are dealt with, not wall-papered over which is all that's happened so far.
The commodities price increases are VERY meaningful, some are already reflected in end prices today, others will begin to show once they run through the system and existing inventories are depleted 3-6 months down the road. There will no doubt be some margin squeeze but not to the extend that you think. Those who can afford to buy non-essentials will simply be asked to pay more to make up the difference, and those who need essentials (food and energy come to mind), all of us that is, will pay the higher prices no matter what. If you believe the government manipulated CPI & PPI have EVER reflected true inflation then there's a bridge in Brooklyn I'd like to sell you. I mean they are so far down the "hedonics" road they are not in Kansas anymore. Gold is behaving like a currency because IT IS a currency. Silver and the rest of commodities are NOT and never will be. You are confusing hard assets acting as "safe-havens" with currency, they are quite different and serve a very different purpose. The US long bond yields have exploded (http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield) not because of any perceived recovery (that's what the government would like you to believe) but because the bond market has finally come to the realization that the US deficit is unsustainable with no end in sight (catalyst: extension of Bush tax cuts & other pork barrel spending attached to the same bill) and the $200 trillion USG debt (including unfunded liabilities - HIGHER if you included the "off balance" sheet GSE liabilities) WILL NEVER BE PAID BACK. Those who bought the 10-YR at 2.4 yield are finding out the hard way what a Mellonesque liquidation looks like.......AND THEY DESERVE IT. Just out of curiosity, with all these endless debates on here about inflation/deflation in mind, do you not shop for groceries, do you not buy petrol for your car, do you not buy clothes, do you not pay for your own utilities for your home? Not central to the argument here but, how about paying your taxes (at all levels), education costs for your children, medical costs for your family or insurance (various kinds)? Are you paying LESS or MORE than you did a year ago? Don't answer, I think I know the answer already, and it's an answer you won't find in the CPI or PPI. |
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Yup, move on nothing to see here, no inflation anywhere in sight, none at all. ((((I hope your sarcasm meter is working))))
http://www.fundmymutualfund.com/2010/12/shadowstatscom-consumer-inflation-as.html |
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Mrben that was not some random video I found on youtube but a link from the NIA site. They have a very good record but that are bias IMO. Youtube is just a method of getting the video to an audience and I think content rather than platform should be judged.
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I didnt watch it J2 and will accept what you say.Utube is a great entertainment platform for watching lady gaga and cooking lessons.Any vids there of "serious" content can be taken seriously.One needs to trawl through hundreds of vids to find one that is genuine and unbiased.Maybe the one you quoted was in that catergory.
Utube is probably one of the most informationally biased medium on the planet.Of course utube doesn't care because it does not make claim to being accurate. Sometimes I wonder if china uses it to aid its propaganda.Hey it hacked google so its very possible. Menelaus JW, as usual, I beg to differ |
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Sometimes I wonder if china uses it to aid its propaganda
And he thinks I'm the conspiracy theorist ?!?!? |
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Youtube is an entertainment platform, but it can also be used as an educational platform. Just because something has videos of people doing stupid things and music videos etc doesn't mean there cannot be something interesting and educational on there. Waterstones sells many respected educational books but they also sell 'The Tiny Book of Compelte B0ll0cks' (or something similarly titled). It's a platform, nothing more, nothing less. I can't believe we're judging a video based on which site it is on! I can link you to the same video on a different site if you're interested, if not I can respect that.
China recently blocked the BBC site and tightly control their population's internet so it wouldn't surprise me if youtube is blocked because there is a large number of people talking about the Chinese influence on commodities and global affairs. |