Tradefair & Financials
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Deflation
Deflation
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hi menelaus
dont get me wrong, im not saying the us are recovering ( i didnt make my mind up ). still, im saying that the reason why the treasuries have fallen and yields gone up is because of the latest set of releases which all surprised on the upside ( even the philly on friday, dont know how many yrs we didnt see it so strong ), pushing investors to dump bonds and buy stocks. do not make the mistake of trying to twist any event in support of your theories. in history of financial markets, there s never been a disorderly distress in the debt market of a country, accompanied by a strong stock market and a strong ccy. check for example what happened to greece or spain or all the other pigs, their stock markets had a terrible year this year, while their bond market crashed ( and the opposite happened to germanby by the way ). and dont forget the ccy, why would you see investors stampeding out of treasuries but actually buying extra dollars instead of getting rid of them. so of course we have to conclude that the bond market was suffering because of more PERCEIVED 'healthy' reasons. for what concern the inflation, my one is negative but i guess depends on personal situations and spending patterns. still, lets not confuse higher taxes ( including higher tariffs like school fees ) with higher inflation! as a matter of fact these things have just the effect to decrease even more your spending power. ehy, at the end of the day (and 80 posts later), i guess pierre at the beginning had nailed the situation exactly and was right all the way thru.. |
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JW
It is true the regional fed bank reports are reporting "improved" numbers, the latest one as you say being Friday with the Philly fed bank manufacturing report showing an activity index of 24.3 in December up from 22.5 in November. The reason: INFLATION In the gut of the report you'll find that firms saw increases in prices for inputs and for their own manufactured goods (so much for margin squeeze). This is the ONLY reason the fed mfgr indices are up. And not that I want to nitpick but the 10YR yield was DOWN 3.38pc on Friday in the face of this "positive" report which totally contradicts your argument. |
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of course of course.
i thought we were looking at the big picture and try to explain that one, not the micro, often technical, moves. what i was trying to tell you is that bonds in general have suffered ( yields gone up from 2.5% ) because of positive feelings and not negative feelings. else you would have had a crash in the stock market and in the usd at the same time. you know my point of view, i dont believe in any catastrophic scenario, but shud one materialize no asset will be spared, as it normally happens. ehy, i enjoy reading your posts and i sometimes learn new things as you see things from different prospective. just dont assume that everyone else here is a clueless mug. some of us do this for a living ( professionally, not amateur-ly ), so you might learn one thing or two too. you never learn anything by just teaching others, remember. and dont try to contradict everyone else all the times, you actually end up contradicting yourself too. |
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JW
One minute we prefer the "big picture", the next we're trading the 5-min chart depending which view supports your arguments. I'm not assuming everyone else is a "clueless mug", except billy who IS a clueless mug and those who still argue deflation in the face of all the evidence (and accelerating) to the contrary. |
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Menelaus
Once again you only consider Hyper inflation or deflation!! Why not just accept that some people(like me) believe that inflation is likely to be slightly above target in the UK for all of 2011, it is 2012 when we need to consider possibility of deflation. I certainly do not believe that there is any threat whatsover of Hyperinflation The tools to the fed and the BOE etc to deal with this are too easy! |
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chisel, do you make this stuff up as you go along?
First of all, I have never said hyperinflation is a certainty, only that the current FED policies increase the risk of the hyperinflation scenario. May be you'll wake up when the FED announces QE3 to bail out municipalities and states that are now bankrupt or the ECB prints more euros to bail out Spain. Second, inflation is not "likely to be slightly above target", there's serious inflation working through the system NOW, and that's a certainly, not likely. Your blind belief in the grossly manipulated CPI as reported by the BoE is astounding and I assure you that if you are making investment decisions based on that belief, it will lead to disaster for you. And last but not least, it's time you wake up and realize that neither the FED nor the BoE have any "tools", only a printing press. |
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they have plenty of 'tools' but all of them are human
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deep
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Menelaus
Your arrogance surrounding this issue is astonishing!! I think that you are so far off the mark it is untrue. I also think that you are being hoodwinked into believing anything you read on teh internet. CPI is what it is . Nothing else. It is not manipulated. If teh money was getting through and inflation was as you predict, Interest rates would already be increasing, and QE would have been reeled in. Neither is happening , and I really think you will find that policy makers know more that you . The fact that they agree with my side of teh argument suggests you are wrong. |
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chisel, I thought only Mr Bean was capable of such a post but you proved me wrong.
Do you even know what CPI measures and HOW it measures it? Do you know anything about hedonics? If you want to base investment decisions based on "CPI is what it is", be my guest, the road to the poor house is lined up with chaps like you. Interest rates, chisel, are suppressed by central banks and are currently not market driven. Because as Sir Denis so eloquently put it, if interest rates are allowed to rise EVERYONE BLOWS UP. That's why interest rates are not going up, NOT because there's no inflation. As far as QE being reeled in, they have no choice chisel, it's inflate or die, and they'll blow up the whole system before they allowed it to die. Chisel, stick to commenting about the housing market, although your calls of housing rebounding in 2010 turned out to be all wrong. But at least in this area you have some basis to express an opinion, about other financial matters I think not. |
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Bit sad posting on this thread on Christmas day but this is a genuine interest of mine and to be honest I find the economic world quite entertaining.
First of all hope you all had/have a wonderful Christmas! Chisel, this line > 'The tools to the fed and the BOE etc to deal with this are too easy!' is absolute pure rubbish. As Menelaus says, the central banks have no tools to deal with the FREE market. Keyword is FREE. Whenever people arrogantly assume they can beat the free market and design a better financial system then the economy is doomed to fail. If you honestly think you see a solution to the problem then contact the fed because they haven't got a clue. They would probably ignore you though because they are a private bank with shareholders. The general public isn't their concern and I find it very hard to believe that anyone who has seen the mountains of evidence could deny that we are headed for hyperinflation with a straight face. QE, when they are buying their government's debt is basically creating money out of thin air. They have no way to withdraw this money from the market. When the fed is buying government debt the game is all but over. |
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J2 , you must be over at melly's lab for christmas dinner? Either that or you have consumed too much pudding.
your entire post [ except the christmas wishes] is trash. Chisel is correct.Theres plenty of evidence to suggest the fed has got it right.Retail sales up, various measures showing postitive turns, S&P highest for 3 years, GDP growth to be 4 % 2011. ONly umemployment remain to turn down to complete the picture. Despite the calls for hysteria and collapse their is no such occurence.. The "games over" the thin air, the economy is doomed to fail , these claims have no substance. J2 this is laughable " The general public isn't their concern and I find it very hard to believe that anyone who has seen the mountains of evidence could deny that we are headed for hyperinflation with a straight face. " You are unable to supply a scintilla of evidence for this.Im guessing your long gold as well?  The "armaggedon " mob have no evidence and its not happening.You are all going down on your sinking ship of failed claims. There not meltdown and thres not going to be. J2- if you posted as a drunken christmas day participant your forgiven.If you poated in a serious manner- your as deluded as melly. Now we can all look forward to mellys rant in reply.No doubt filled with abuse but nothing of substance. |
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Mr Bean's FIRST post-Christmas 2010 memorable and worthless quote addressed to 32BLUE:
"your entire post [ except the christmas wishes] is trash." The remainder of Mr Bean's post is nothing more than ad hominen attacks and the now famous "trust me" or "it is so because I say so" statements. Let's have a look: "Despite the calls for hysteria and collapse their is no such occurence.." (Start with spelling occurrence correctly, then EXPLAIN why and we just might forget that you don't even know how money gets created )"The "games over" the thin air, the economy is doomed to fail , these claims have no substance." (...and why, my hyperinflation is "huge inflation" friend? )"There not meltdown and thres not going to be." (Again start with spelling "there's" correctly and adding "one" at the end of the sentence and we......never mind, I doubt we would ever take seriously anything you post on here no matter what )and the "piece de resistance", "You are unable to supply a scintilla of evidence for this" (And you have in your ad hominem, baseless, worthless, filled of rubbish and stupidity counter argument??? - if one can possibly call your foul mouthed personal attack on another poster "an argument". Mr Bean, you used to provide comedic entertainment on here and nothing more. Now you managed to add vile to your repertoire. |
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Mrben, I hope you had a good day yesterday!
No evidence for hyperinflation? Are you serious? At the moment we have high inflation, everything from soybeans to cotton is up leading one major clothes manufacturer to announce that the era of cheap clothing is over. In China where they export far more than they import they are receiving loads of dollars for their goods. There are more dollars around after the fed's money printing (and that is what it is, don't give me this QE b0llocks) and because the Chinese central bank have to exchange these dollars at a price which is pegged to the Yuan there is more Yuan in circulation leading to inflation in China (they've just put their interest rates up). The Chinese are quite literally importing our inflation and when they finally depeg their currency from the dollar it is going to come crashing back to America. The world is losing confidence in the dollar and that is how hyperinflation occurs. It's an open secret that the Chinese are buying gold and commodities by the ton and encouraging their citizens to invest in precious metals. Even Chinese pig farmers have bought copper as an investment. I'm not arrogantly claiming I am definitely not, this is just the opinion I come to when I see the evidence. I might be wrong and yes i'm long silver and gold but if they drop 50% and the economy recovers I would take that every day! I honestly hope you are right, I just don't see it. |
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I'm not arrogantly claiming I am definitely right*
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melly, dont bother reply to my posts.I dont read them anymore.
thanks for your wishes J2.Chrissy day was pretty good,hope you enjoyed it also.The next day however was dreadful when the poms made mincemeat of us in the cricket  re inflation in china,what is it, 6%?Thats hardly high, higher than it was but not high. the world id not losing confidence in the dollar, confidence is down but not lost by a long way. Extrapolations are being over done all over the place. People are taking any %%%% moves and extrapolating the daylights out of the.This is where we are getting "silver to go to 100, gold to go to 5,000 oil to go over 200, hyperinflation is imminent.All are absurd. I remember a few years ago when platinum was i think 2400 that "its going over 10,000" because its used in catalytic converters in cars and the chinese will be having 100 million extra cars.Remember that story.?? Platinum is around 1700 today. What you find is that when all the predictions are for catastrophy its plain sailing. When booms are predicted, recession soon follows. Gold down, silver down, USD up- thats the way to bet from here. I can hear melly chocking on his cornflakes from here. |
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Good stuff. Christmas Day was quite boring! Yesterday was a better day thankfully.
So your logic is the opposite of the masses? Fair enough, the masses are usally wrong but there is a very small number of people in gold and silver and I personally believe we are in stage 2 of a bull market. The Chinese as a nation are investing in gold and silver after being encouraged by their government and the government is purchasing base metals and precious metals by the ton to get out of US dollars. When your biggest creditor is trying to get out of your currency and into something 'safe' that surely is a warning to the world? We hear more and more stories of the dollar losing its position in the world market, now i'm not saying it isn't important because it is, but countries are beginning to look away from the dollar. I find it amazing in the other thread you predicted three more shots of QE yet are seemingly long on the US dollar? If anything, if I expected three more shots (and I do expect at least one) i'd want to put my money into metals. I am long on silver mainly and a little gold and i'll happily put that into every post so if i'm wrong it will be there for everyone to see. I think you could do far worse than to hedge your bets mrben with a few tubes of silver maples or eagles. |
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melly, dont bother reply to my posts.I dont read them anymore.
And who's to blame you ?!?! If I were you, I wouldn't want to read the drivel you keep posting either. Mr Bean, you may have a future as a stand-up comedian but as a financial markets commentator.....not so much. |
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"I find it amazing in the other thread you predicted three more shots of QE yet are seemingly long on the US dollar? "
yeh, I know that seems a bit contradictory .However I visited USA 2 months ago and I can say its much worse "on the ground" than is being reported by the media.Americans as individuals are crushed both financially and their spirit.The reduction in personal wealth there is huge.Hence I see QE 1/2/3/4/5/6/ etc merely replacing what has been lost, rather than adding on top of whats already there.Thats the same reason I dont see inflation caused by QE's. We already have had QE's and inflation has only nudged up a bit.Theres no convincing argument to say that the next ones will be any different. My logic is not so much to be opposite of the masses,I was long gold all 2010 for example.But I think these races have been run.The finishing post looms large. I do see the possibility that the US economy can improve in 2011,I mean its pretty low now so theres plenty of potential for the upside. If the US improves the mood will shift to " the US is now in recovery " Hence the USD has upside potential also. My trading is based on thinking things thru from a behavioral and political stand point as well as from a pure economist view. I do not believe that politicians will let things collapse to ground zero.That extrapolation is a purist economist perspective. I'm betting on a bit of US recovery, a bit of USD strengthing, hence I believe gold will actually fall from the 1400$ mark.Silver has little potential for the upside as well.The industrial value of silver is around 17$ or even less.Past this point the industrial cost becomes uneconomical and demand fall for finished product.The current price is driven by speculation. A better bet is the big mining iron ore and maybe oil companies.BHP and RIO tinto have upside for 2011. |
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Mr Bean, if there was ever any doubt that you posted the worse drivel on this forum during 2010, you absolutely nailed it with this post. If anyone after reading this rubbish doesn't run to the liquor cabinet for a shot (or two) of their favourite single malt then nothing would induce then to do so.
Your stuff is not even laughable any more, it is simply seriously deranged. |
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Thanks for the reply and i'm surprised that you say it's much worse than being reported because I saw someone on Kitco forums say it was far better than being reported! I guess it's all done to personal viewpoint.
I think the key thing about QE not causing inflation is that the US imports far more than it exports and therefore those dollars are leaving the country. The Chinese have just raised interest rates for the second time in quick succession because they are receiving the dollars which then have to be coverted to yuan at a certain price causing inflation in China! It's not so much a case of QE not causing inflation as causing inflation elsewhere. How long will China stand for US money printing disrupting their system? They have the dollar reserves and the option to depeg their currency to take down America if they wish. There will be a point where they decide America is done and depeg their currency which will strengthen the Yuan and therefore increase the purchasing power of the Chinese people who will begin consuming the things they produce so I think there will be a transitional period where maybe China loses out but eventually they will win big time! This makes me bullish on copper and silver because the Chinese will want the same standard of living they have been subsiding for us all these years and they will begin to consume electronics etc which use copper and silver. I wouldn't be surprised to see a gold backed Yuan become the new world reserve currency (that is pure speculation on my part, I haven't read anything about that anywhere) |
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Chisel "CPI is what it is"
Do you understand what it is? It is an index. I defy anyone to look at the official figures and make a case for low "underlying inflation". It's going through the figures and increasing miles faster than in the past. It's gone up 10 pts in just the last 3 years. 1992 Apr 80.2 1992 May 80.5 1992 Jun 80.6 1992 Jul 80.2 1992 Aug 80.2 1992 Sep 80.5 1992 Oct 80.7 1992 Nov 80.8 1992 Dec 80.8 1993 Jan 80.4 1993 Feb 80.9 1993 Mar 81.3 1993 Apr 82.2 1993 May 82.5 1993 Jun 82.5 1993 Jul 82.2 1993 Aug 82.5 1993 Sep 82.9 1993 Oct 82.8 1993 Nov 82.6 1993 Dec 82.8 1994 Jan 82.5 1994 Feb 82.9 1994 Mar 83.1 1994 Apr 83.9 1994 May 84.1 1994 Jun 84.1 1994 Jul 83.6 1994 Aug 84.1 1994 Sep 84.2 1994 Oct 84 1994 Nov 84.1 1994 Dec 84.5 1995 Jan 84.5 1995 Feb 84.9 1995 Mar 85.3 1995 Apr 85.8 1995 May 86.2 1995 Jun 86.3 1995 Jul 85.8 1995 Aug 86.3 1995 Sep 86.7 1995 Oct 86.5 1995 Nov 86.5 1995 Dec 87 1996 Jan 86.8 1996 Feb 87.2 1996 Mar 87.5 1996 Apr 88 1996 May 88.3 1996 Jun 88.4 1996 Jul 87.8 1996 Aug 88.3 1996 Sep 88.7 1996 Oct 88.7 1996 Nov 88.7 1996 Dec 89 1997 Jan 88.6 1997 Feb 88.8 1997 Mar 89 1997 Apr 89.4 1997 May 89.6 1997 Jun 89.8 1997 Jul 89.5 1997 Aug 90 1997 Sep 90.3 1997 Oct 90.3 1997 Nov 90.4 1997 Dec 90.5 1998 Jan 89.9 1998 Feb 90.3 1998 Mar 90.5 1998 Apr 91 1998 May 91.5 1998 Jun 91.3 1998 Jul 90.8 1998 Aug 91.2 1998 Sep 91.6 1998 Oct 91.6 1998 Nov 91.7 1998 Dec 91.9 1999 Jan 91.4 1999 Feb 91.5 1999 Mar 92 1999 Apr 92.4 1999 May 92.7 1999 Jun 92.6 1999 Jul 92 1999 Aug 92.3 1999 Sep 92.7 1999 Oct 92.6 1999 Nov 92.7 1999 Dec 93 2000 Jan 92.1 2000 Feb 92.4 2000 Mar 92.6 2000 Apr 92.9 2000 May 93.2 2000 Jun 93.3 2000 Jul 92.8 2000 Aug 92.8 2000 Sep 93.6 2000 Oct 93.5 2000 Nov 93.7 2000 Dec 93.7 2001 Jan 92.9 2001 Feb 93.1 2001 Mar 93.4 2001 Apr 94 2001 May 94.7 2001 Jun 94.9 2001 Jul 94.2 2001 Aug 94.5 2001 Sep 94.8 2001 Oct 94.7 2001 Nov 94.5 2001 Dec 94.7 2002 Jan 94.4 2002 Feb 94.5 2002 Mar 94.9 2002 Apr 95.3 2002 May 95.5 2002 Jun 95.5 2002 Jul 95.2 2002 Aug 95.5 2002 Sep 95.7 2002 Oct 95.9 2002 Nov 95.9 2002 Dec 96.3 2003 Jan 95.7 2003 Feb 96 2003 Mar 96.3 2003 Apr 96.7 2003 May 96.7 2003 Jun 96.5 2003 Jul 96.5 2003 Aug 96.8 2003 Sep 97.1 2003 Oct 97.2 2003 Nov 97.2 2003 Dec 97.5 2004 Jan 97 2004 Feb 97.2 2004 Mar 97.4 2004 Apr 97.8 2004 May 98.1 2004 Jun 98.1 2004 Jul 97.8 2004 Aug 98.1 2004 Sep 98.2 2004 Oct 98.4 2004 Nov 98.6 2004 Dec 99.1 2005 Jan 98.6 2005 Feb 98.8 2005 Mar 99.3 2005 Apr 99.7 2005 May 100 2005 Jun 100 2005 Jul 100.1 2005 Aug 100.4 2005 Sep 100.6 2005 Oct 100.7 2005 Nov 100.7 2005 Dec 101 2006 Jan 100.5 2006 Feb 100.9 2006 Mar 101.1 2006 Apr 101.7 2006 May 102.2 2006 Jun 102.5 2006 Jul 102.5 2006 Aug 102.9 2006 Sep 103 2006 Oct 103.2 2006 Nov 103.4 2006 Dec 104 2007 Jan 103.2 2007 Feb 103.7 2007 Mar 104.2 2007 Apr 104.5 2007 May 104.8 2007 Jun 105 2007 Jul 104.4 2007 Aug 104.7 2007 Sep 104.8 2007 Oct 105.3 2007 Nov 105.6 2007 Dec 106.2 2008 Jan 105.5 2008 Feb 106.3 2008 Mar 106.7 2008 Apr 107.6 2008 May 108.3 2008 Jun 109 2008 Jul 109 2008 Aug 109.7 2008 Sep 110.3 2008 Oct 110 2008 Nov 109.9 2008 Dec 109.5 2009 Jan 108.7 2009 Feb 109.6 2009 Mar 109.8 2009 Apr 110.1 2009 May 110.7 2009 Jun 111 2009 Jul 110.9 2009 Aug 111.4 2009 Sep 111.5 2009 Oct 111.7 2009 Nov 112 2009 Dec 112.6 2010 Jan 112.4 2010 Feb 112.9 2010 Mar 113.5 2010 Apr 114.2 2010 May 114.4 2010 Jun 114.6 2010 Jul 114.3 2010 Aug 114.9 2010 Sep 114.9 2010 Oct 115.2 2010 Nov 115.6 http://www.statistics.gov.uk/statbase/product.asp?vlnk=868 |
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Good post but even the accelerating numbers don't tell the whole story because the methodology of calculating the CPI was changed several times since 1993 with the sole intention of understating inflation. Changes like substitution, switching from an arithmetic weighting to a geometric one and hedonics in calculating CPI all drove the stated inflation DOWN once implemented.
For those still arguing "low or no inflation", pay attention to your bills not CPI. |
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Gee Rollo, I hope that was a cut and paste and you did'nt have to enter all those numbers
what you have shown there is that inflation is infact low.It show a slight increase lately, a blip upwards.Nothing in those numbers indicate inflation is doing anything unusual. "miles faster than in the past. It's gone up 10 pts in just the last 3 years." please take another look at the figues and try to work out why this statement is incorrect re speed. ' |
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Mr Bean, since you shouting the loudest as usual again, as often the most ignorant do on here, why don't you post explaining the methodology the Office for National Statistics uses to calculate CPI.
Impress us what you may actually know, not what you think you know and couldn't be further away from the truth. I think we are in for a long wait for this post. |
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Mrben,
It's a cut and paste from the link I provided. 10pt rises in the index are coming quicker than ever. 115.6 Nov 2010 3 years 105.6 Nov 2007 5 years 95.5 May 2002 7 years 85.3 March 1995 |
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thats good news rollo.
as a new years presi I'll make it easy for you.Its not about "points" its about %%%%%%%% enjoy new years eve.[smiley:crazy] |
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Mr Bean, truly you are the most ignorant poster on here by some margin.
I say you haven't a clue how CPI is calculated but you still insist in spewing rubbish on this forum every time you log on. Here's my post from a few days ago which you conveniently ignored: "Mr Bean, since you shouting the loudest as usual again, as often the most ignorant do on here, why don't you post explaining the methodology the Office for National Statistics uses to calculate CPI. Impress us what you may actually know, not what you think you know and couldn't be further away from the truth. I think we are in for a long wait for this post." Post the answer and shut me up. I say you can't because you haven't a clue. Prove me wrong. |
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Mrben
I knew you would resort to %. It's true that looking at 10 pt rises makes it look worse because as the index increases 10pts is a lower percentage of the total. So OK just look at how long it has taken the most recent 5% increases in the index going backwards. 115.6 Nov 10 20 months 109.8 Mar 09 24 months 104.3 Mar 07 27 months 99.1 Dec 04 39 months 94.1 Apr 01 48 months 89.4 Apr 97 It's clear that since 97 the months it takes per 5% rise has shortened dramatically i..e inflation is rising at a much faster rate. |
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Rollo, you are wasting your time. Mr Bean hasn't a clue what the numbers you posted mean or how they are derived. In addition, as I posted earlier, the numbers would be a lot worse if the Government hadn't changed the methodology of calculating CPI several times over the years.
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