Deflation

Mrben, spend some time educating yourself, and I don't mean reading your daily's "financial section" nor spending time on here spewing insults:


Doubling Your Monetary Base and Surviving:
Some International Experience
Richard G. Anderson, Charles S. Gascon, and Yang Liu
The authors examine the experience of selected central banks that have used large-scale balance-
sheet expansion, frequently referred to as “quantitative easing,” as a monetary policy instrument.
The case studies focus on central banks responding to the recent financial crisis and Nordic central
banks during the banking crises of the 1990s; others are provided for comparison purposes. The
authors conclude that large-scale balance-sheet increases are a viable monetary policy tool provided
the public believes the increase will be appropriately reversed. (JEL E40, E52, E58)
Federal Reserve Bank of St. Louis Review, November/December 2010, 92(6), pp. 481-505.


In other words, PROVIDED CONFIDENCE IN THE CURRENCY IS NOT LOST.

Here's the link:


http://research.stlouisfed.org/publications/review/10/11/Anderson.pdf

Menelaus

the real point is that there is absolutely no chance of investors losing so much faith in the Dollar, Pound and Euro that we will ever see HYPERINFLATION here. This is not Zimbabwe. Have investors lost faith in the Yen? This argument is utterly ridiculous.  The dfinition of Hyperinflation is when prices rise by over 100% in 3 years , or 26% compound over 3 years!!. How can this happen. Hyperinfaltion by definition also refers to a local population losing faith in the local currency , and being unwilling to hold it for long enough to trade it for something of non monetary value. this can not be forced on a developed economy without some horrendous event

Chisel, we are at the opening act of the worse currency crisis mankind has ever seen, nothing more, nothing less.

The fractional reserve fiat money system we have today was designed to fail from the moment it was conceived. Money is debt, and debt is principal plus interest, only the interest part doesn't get printed into existence. It's paid back through growth, exponential growth at that. The minute exponential growth ceases, the system collapses. You can not run away from the equation, and we are now at the beginning of the fail phase.

In some sense you are right, this isn't Zimbabwe, it's way worse.

im scared daddy

come on melanus,  thats just total alarmist drivel."The moment expotential growth ceases the sysystem collapses"???? expotential growth was never in place to start with. China has been growing at 10% plus  for more than a few years.Are you suggesting that if they had a few years at zero growth their economy would collapse? Thats laughable.

Money is debt? How do you work that one out, If your debt free like me and I spend 100$ that expenditure is debt? What????

Melly, you have a pretty lose grip on reality there, as chisel states your argument is totally ridiculous.

The opening act of the worst currency crisis mankind has ever seen? how so? Please explain.There will be no crisis if all curriencies are in crisis  at the same time.All currencies cannot race to the bottom at the same time.It was just a few months ago that even the great george soris was claiming the euro would fall to 80 cents.Never got  within a bulls roar of it.

Worse than zimbabwe? You may be able to quote notable articles/ authors but you understanding of the concepts is non existant.

Take your medication and re read economics 101.

You don't know what hyperinflation is, you think it's just "very high inflation", and now you reveal you don't know how the monetary system works.

Yes, money is debt !!!!!!! They usually teach that in first year at the London School of Economics. In your local daily, not so much.

It is downright shameful that you are commenting on financial matters on this forum if you don't know something as basic as that.

Menelaus is correct: money is created as debt, and the system requires exponential growth in order to keep the ship afloat.

When people lose faith in paper money they stop using it to buy or sell goods. It doesn't matter what exchange rates are if nobody wants to accept the stuff.

There is nothing stopping you if, say, you are selling a piece of land, to quote a price in Kg of gold. Makes a lot of sense if you have no idea if the paper money which might be offered cannot buy anything else.

To be honest I am not sure if we are about to see the imminent collapse of the monetary system. More likely is that they keep the show on the road in some kind of zombie state, with everyone except the bankers gradually getting poorer and poorer.

Personally I put all my savings into gold a couple of years back, and will not be selling it unless I know I can get something with tangible value with the proceeds. Nothing looks very attractive at the minute.

hi guys, long time no speak...
im not too sure the fiat system will fall down, and all at the same time ;-)
the usd - on which i ve been positive for long time during the crises period - is really the only ccy at risk here, if bernanke and co dont manage to work out a plan to exit this loose strategy. but it s a problem a couple of yrs down the line. note tho, that when i say the usd is at risk,i cannot imagine a zimbabwe scenario at all. a 20% 30% drop in the external value for sure, but i dont buy the end of the world thing. (especially when the velocity is still low, the spare capacity is still huge, cpis and ppis are trending to the low ever and so on.)
from your readings, i see you give too much space to conspiracists maybe ( armstrong, ffs, do you read even danbrown on the economy as well ? ), but then better to have more culture than less. but some of these guys tend to sell nightmare stories, and they re a bit too much attached to their roles of prophets of doom. but since world started there s been many more prophets of doom, compared to dooms themselves - which in fact never occurred ;-). so watch out.   
the only thing, and this is to whykamist too, of course any monetary and credit system looks 'dodgy' when you think about it, the idea itself to assign value to paper is weird. ( but so is to give value to salt as it was before, or pearls, or gold ) but this is how the world works unless we want to go back to a do-ut-des or do-ut-facias exchange economy where no monetary intermediary is necessary. same for fractional reserving, the advantages are far greater than the disadvantages.
but keeping the discussion within the ccies boundaries, not because a central bank is been very aggressive that the end of the fiat world is coming. look even at the ecb, normalising the rates at the right time, withdrawing the stimulus, tough on inflation although the growth is only touching the core countries. even if the usd got punished, you dont need to lose faith in everything ( and i didnt even mention the nok, sek, cad, aud, nzd, chf... )
anyway hope all of you re fine,
jw.

Yes, money is debt !!!!!!! They usually teach that in first year at the London School of Economics. In your local daily, not so much.



if money is debt then debt is money.They teach that in maths 101.

Therefore If i have a 100k mortgage{debt} im going well because I have 100k in money.
err no I dont.I have a 100k debt which I have to pay back with money.Not kg's of gold.

Money is a means of exchange.

Money is not secured against anything anymore.

money is not debt, nor is it created as debt. and the system does not require expotential growth to keep the ship afloat.
The  ship can quite easily remain afloat with negative growth.It may not be a decadent party any longer but it remains afloat.

  I do agree with wikkie2 when he says that the economies may be kept afloat in some kind of zombie state with individual getting poorer and poorer.

  However I dont agree putting your $$$ into gold is a good idea.I recently read a study{ I wish I could find it again so I could quote it} that showed gold woefully underperforms. Gold is like any other investment, it should form PART not all of any strategy.

   There is no way, repeat NO WAY the monetary system is going to collapse.Not a snowballs chance in hell.They can print all the money they like and it  wont cause a collapse.

   The often quoted hyperinflation in germany and zimbabwe  are  held up as prime examples of what happens when tooo much cash is around.What is not  quoted is the background to it. Germany with WW1 and the impossible burden of repatriations  and zimbabwe ridding itself of all the landholders and  putting into  place a govt of rampoant corruption and 100% incompetance.
   Neither of these types of scenarios exist in the current leading economies.
Even  rampant corruption is not sufficient alone.Phillipines and indonesia are terrible corrupt  yet neither has  hyper inflation.


   Further-- take the point that QE is to a certain extent replacing  money lost durung GFC, a de leveraging they call it.

  The fear that everything will collapse is stopping so many people from making a fortune  now. As you all know I;m a trader. The second half of 2010  will be my best ever.I just can't stop making money, sorry debts

   Stop concerning yourselves with the total bulllshit you are being fed by the media, goverments and uni professors and get on the greatest financial ride of your life.Times are beautiful now.

Mrben: Once again, ignorance shouts the loudest. I have no intention in exchanging posts with anyone who posts "money is not debt, nor is it created as debt". This is the equivalent of posting "I'm ignorant of all matters related to economics, look what a fool I am."

JW: The US muni bond market is on the verge of be imploding, look for the FED to start buying munis next, they have no choice. And the ECB not to be outdone will monetize the debts of the technically insolvent euro financial sector and sovereign insolvency mess, they also have no choice.  It's a fiat race to the bottom. And like I said in my previous post, you can't outrun the equation, it was a fiat monetary system that was designed to eventually fail and eventually is upon us now. And that's pretty simple arithmetic, not a conspiracy theory.

your deluded melly.Totally deluded.Your wallowing around in your own version of financial misery.The truth is an alien concept to you.
     Im loud and ignorant- but I'm the one taking 3/4 overseas holidays a year and making north of 250k through trading.Go figure.
  You would do better to exchange posts with me rather than look for confirmation of your currently demented ideas.

Trade on!
       Love Ben[:x]

Mr Bean, making $250k through trading is very impressive indeed.

You should know however that the $250k that you are claim making came into existence because someone at some point in time BORROWED IT. It was created as debt.

Imagine if you knew the most basic fact in economics, how money is created, you'd be making $2 trillion a year trading with your brilliance.

*are* = delete

America are selling 94% of their bonds to the Federal Reserve. This is effectively printing money. There WILL be hyperinflation in America if they don't stop printing money and don't raise the interest rates.

Prices of corn, wheat, soy bean, cotton etc etc etc is rising rapidly and businesses will be forced to raise prices.

China have recently increased interest rates to offset the inflation caused by the US printing money (read: 'quantative easing).

Bernanke swore under oath he would not monetise the debt. He is monetising the debt.

All fiat currencies fail and the dollar's time has come. The pound and euro etc will follow. Buy gold and silver!

Menelaus is schooling mrben on economics. Please no one listen to this ben mug.

Don't take anyone's word for events on here. Study. I've spent hundreds of hours studying and reading articles and watching videos and now have a good understanding of the economy.

Just be wary of the source, If you go on house price crash forums (which have some decent info) know that these people WANT a hpc and are bias. If you go on gold forums people their want their gold to skyrocket etc etc

There is some great info out there. Start with Gerald Celente, Robert Kiyosaki, Ron Paul (US Congressman). These three will lead you to more who will lead to more. READ!

chisel
When: 16 Nov 10 15:27
Joined:
Date Joined: 19 Sep 08
| Topic/replies: 1,572 | Blogger: chisel's blog
Menelaus

the real point is that there is absolutely no chance of investors losing so much faith in the Dollar, Pound and Euro that we will ever see HYPERINFLATION here. This is not Zimbabwe. Have investors lost faith in the Yen? This argument is utterly ridiculous.  The dfinition of Hyperinflation is when prices rise by over 100% in 3 years , or 26% compound over 3 years!!. How can this happen. Hyperinfaltion by definition also refers to a local population losing faith in the local currency , and being unwilling to hold it for long enough to trade it for something of non monetary value. this can not be forced on a developed economy without some horrendous event




You don't have the financial education to argue with Menelaus. Reading his posts you can tell he has put the effort and TIME in to learn what's what. Fact is you argue that people won't ever lose faith in the dollar. This is the most laughable thing I have ever heard. It has already begun.

Big energy deal between China and Russia - not dealing in dollars.

China with their dollar reserves - quietly buying natural resources around the globe and encouraging their people to buy gold and silver.

The Fed being forced to buy 94% of US Bonds because no one is willing to invest in the dollar! They have to buy or the ponzi scheme will be completely unveiled. It's a last gasp of a dying system.

Worldwide currency war - countries trying to devalue their currencies to help their exporters. QE2 was a major shot in a coming global FINANCIAL war (non military, just to be clear).

The fact is, you're all mocking Menelaus when he is the only one with his eyes open. You're not going to see this info in the papers or on the news. You need to do some research.

Money IS debt. Look at a ten pound note. 'I promise to pay the bearer on demand the sum of ten pounds'. Ten pounds someone owes you. You don't carry money, you aren't trading money, you are trading debt. Debt that is backed by nothing and cannot be repaid.

By: J2BLUE. When: 21 Nov 10 12:01 Menelaus is schooling mrben on economics. Please no one listen to this ben mug.

Don't take anyone's word for events on here. Study. I've spent hundreds of hours studying and reading articles and watching videos and now have a good understanding of the economy.

Just be wary of the source, If you go on house price crash forums (which have some decent info) know that these people WANT a hpc and are bias. If you go on gold forums people their want their gold to skyrocket etc etc

There is some great info out there. Start with Gerald Celente, Robert Kiyosaki, Ron Paul (US Congressman). These three will lead you to more who will lead to more. READ!


oh J2 your as confused as melly.Your post is contradictory for a start.Firstly you, correctly, advise that if you go on a particular forum someone will be pushing the desired barrow.You warn against listening to them.
In you next sentence you advise reading and taking as gospel clente,kiyosaki,paul.They too are pushing their own barrows.Why are they not treated with the same caution?

   There is nothing wrong with pushing a barrow.If you remember about 10 years ago kiyosaki was preaching to the world to buy real estate ad nauseaum.He made a  fortune selling books and seminars. That did not work out too well did it? His beloved real estate crashed.

  Its fine to read  such stuff.The key here is NOt to swallow it holus bolus.Youve got to have the brainpower to  keep what good and discard whts essentially propaganda.

   This is where you and melly fall apart.You take  the opinion of one "authority" and pitch it against another.To be successful you need to think for yourself.

   Take kiyosaki- his philosophy worked for quite a while but once usa house prices and transaction reached surrealistic levels- did investing any longer make sense? NO. Now the minute one realises this never coincides with a crash the next day, but the equation simply no longer made sense.

   No a single "authority" came out to say- hey this is total BS.I think it was roubini one other guy who were shouted down when they  came out against the madness.You and melly would have been in the front line to shout them down, no doubt quoting various articles and financial authorities.

   Its the same here- "officials" are concerned about hyperinflation/ deflation or whatever takes their fantasy at the time.Your accepting what they say.
    You can have any amount of formal education you like and sit and pontificate ,using your education as justification.That doesnt count for shitt in the real world.

    What I'm recommending to you is  think for yourself,dont keep quoting your read whatever.I disagreed with mellys post and his ony comeback is he has education and he read a lot of articles. So what? At least mount a sensible argument as to HOW such hyperinflation will occur.

J2 you mention "currency wars" a premise I also dont accept.There can be no  concurrent race to the bottom by definition.Think about it.How would it work in practice? The mere verbalising of it by some talking head does not make it so.

   J2 you mention big deals no longer being made in dollars.This is true, the USD will fall perhaps but  a collapse will  not happen.Neither will hyperinflation, neither will deflation.

   As an aside you quote "Money IS debt. Look at a ten pound note. 'I promise to pay the bearer on demand the sum of ten pounds'
   Seriously-I promise to pay the bearer 10 pounds, 10 pounds of what? Butter?

Time to  re think who's eyes are really open here and who's mind is closed.

one more point-

By: J2BLUE. When: 21 Nov 10 11:53

 

All fiat currencies fail and the dollar's time has come. The pound and euro etc will follow. Buy gold and silver!

The euro has risen from a low of 1.20 late may 2010 to currently 1.3750.Thats 6 months its been rising.

If you truely believe in what you saying J2 you could literally making 10's of millions pyramiding a position for the downside, starting with say 100k. Why dont you do this if you believe in a collapse? Please advise.

More drivel from Mr Bean. He posted:

"This is true, the USD will fall perhaps but  a collapse will  not happen"

If there ever was a more ignorant comment posted in this forum, perhaps with the exception of "money is not created as debt" and "hyperinflation is huge inflation", someone please point me to it. Mr Bean, I have news for you, the USD is the world's reserve currency and if it fails the global financial system collapses the very same second. Honestly, get a clue before you continue posting.

Mr Ben:

Nowhere do I advise taking Kiyosaki etc as gospel. That is your own own spin on my words. I said in the part before that you should lok at all sources critically. I just advise those three because they will lead you to more articles and videos which are both in agreement and disagreement.

Hyperinflation will occur when the world loses faith in the currency. No one will want to hold dollars. It will be like holding water in a cup with a hole in the bottom. There will be a race to get rid of dollars as soon as you hold them. The lack of faith will mean people demand more and more dollars for the same goods.

A currency war has already begun. Quantative easing is one of the first shots along with China keeping the Yuan artifically low. Germany, Brazil, Russia etc etc have all threatened retaliation.

'Seriously-I promise to pay the bearer 10 pounds, 10 pounds of what? Butter?'

Exactly. Backed by nothing. Why should anyone have faith in it?

Brilliant video on QE at youtube...here is the link:

http://www.youtube.com/watch?v=PTUY16CkS-k

By: Menelaus When: 22 Nov 10 13:16 More drivel from Mr Bean. He posted:

"This is true, the USD will fall perhaps but  a collapse will  not happen"

If there ever was a more ignorant comment posted in this forum, perhaps with the exception of "money is not created as debt" and "hyperinflation is huge inflation", someone please point me to it. Mr Bean, I have news for you, the USD is the world's reserve currency and if it fails the global financial system collapses the very same second. Honestly, get a clue before you continue posting.


  melly, your getting worse.

There will be no collapse.Firstly the chinese currency is bound to the usa dollar.If the usa$ falls by 50% then the chinese benefit by 50%, making their exports as cheap as chips.Usa exports also.This increases demand, the aussie econmy booms off the back of an inceased demand for resources and the aussiess eventually take over the world!!!  As the pound collapses to zero and the AUD goes to 5 mrben arrives in london and buys buckingham palace for 2 cents in the dollar!!!!

Think thats going to happen? Wake up melly.

J2 - have you just started in your journey into the financial world? "A currency war has already begun. Quantative easing is one of the first shots along with China keeping the Yuan artifically low. Germany, Brazil, Russia etc etc have all threatened retaliation.

germany brazil russia etc have all threatened retaliation- so what?  The chinese have been taking the world for a ride for a few years now and theres zippo the world can do about it.Exactly what form could such retaliation take? Its a hollow threat and china knows it.You should know it too.

   Stop worrying about this sort of hogwash and start making yourself some real money, sorry debt.
Last night the euro got above 137.50 on "easing of irish debt concerns",, lololol did the irish debt disappear all of a sudden? The AUD got into the mid 99's but metals prices were falling. The dow futures were postive but then turned negative.The european markets opened up deep in the green off the back of the dow close  but started to reverse.Yet these two curriencies continued to rise.
   I shorted 25 contracts of euro and 15 of aussie. i woke up this morning at 6.30 am and checked my positions.I was 33,000$AUD ahead after  both fell  nicely.Thats how you make money.Not by  worrying about some fantasy collapse.Forget your fears and  trade on!

   Now thats a big result for me.Today I will spend some of that money{debt} and buy one of those new 3D tv's for about 3500$.Im pretty sure the  when I say to the guy " can I pay cash? " the answer won't be " no way, money is debt and I don't want any more debt".The rest goes into the holiday fund.

on the story of money and debt.
lets be clear, it s not because of the 'i promise to pay the bearer...' which means nothing and incidentally is a sentence which is not written on dollars or on euros notes ( the newest of all ccies ), neither on coins.
money is created as a result of debt ( by commercial banks basically, who multiply the monetary mass ), although in reality money is (in modern times) only a way to exchange goods, a numeraire basically ( but certanly not anymore a store of value.. ).
thats what you meant menelaus?

Mr Bean: the rubbish you keep posting on here is astounding. If the USD falls by 50% from where it is today, the global economy collapses amid chaos along with it. Soaring oil prices would see to that, not to say anything of other commodity and (more importantly) food supply disruptions. But you instead are expecting a boom based on "the back of an inceased demand for resources". You couldn't make this stuff up even if you were trying to prove your ignorance of fundamental economics on purpose. Concerning your 33,000 AUD money making trade that you checked when you "woke up this morning at 6.30 am", I usually stop dreaming when I wake up, evidently you don't.

JW: money is created as debt. If I have to explain this further on a financial forum - except to Mr Bean - we're really in trouble here (read some of my previous posts on this thread, they are self explanatory). The "pay to the bearer" comment was not mine but I think the poster wasn't so much speaking about how money is created, but was rather trying to make the point that (since the abolition of the gold standard) that "promise" is backed by nothing tangible.

By:
Menelaus
When: 23 Nov 10 07:59
Mr Bean: the rubbish you keep posting on here is astounding. If the USD falls by 50% from where it is today, the global economy collapses amid chaos along with it. Soaring oil prices would see to that, not to say anything of other commodity and (more importantly) food supply disruptions. But you instead are expecting a boom based on "the back of an inceased demand for resources". You couldn't make this stuff up even if you were trying to prove your ignorance of fundamental economics on purpose. Concerning your 33,000 AUD money making trade that you checked when you "woke up this morning at 6.30 am", I usually stop dreaming when I wake up, evidently you don't.

JW: money is created as debt. If I have to explain this further on a financial forum - except to Mr Bean - we're really in trouble here (read some of my previous posts on this thread, they are self explanatory). The "pay to the bearer" comment was not mine but I think the poster wasn't so much speaking about how money is created, but was rather trying to make the point that (since the abolition of the gold standard) that "promise" is backed by nothing tangible.




Thank you, yes that is what I was trying to say. Fiat currencies are as worthless as monopoly money yet people wouldn't accept monopoly money. Soon people will realise they are both the same. Pieces of paper worth nothing. Fiat currencies are only worth the faith people place in them and the world is losing faith in the dollar and every other currency backed by nothing. Hyperinflation will follow.

melly you are a total dunderhead.If the world were made of icebergs you would be the titanic.



When: 23 Nov 10 07:59
If the USD falls by 50% from where it is today, the global economy collapses amid chaos along with it. Soaring oil prices would see to that, not to say anything of other commodity and (more importantly) food supply disruptions

where did you get that from? A 12yo on u-tube?IF it were true that the USD fell by 50% AND the global economy collapsed, OIL would not soar as DEMAND would plummet due to reduced economic activity.How can oil soar on a collapsed world economy??????/?/?????

DUNDERHEAD.

You just dont think things through melly, you go off half cocked based on what some"expert" told you.

In animal terms melly you are a sheep, one that can be led around with the herd and placed wherever the expert want to place you.You are what is termed "a highly educated twit"

Its not so astounding to me as it you  guys that are financing my lifestyle.Walking around convinced your "right" while we keep taking your money off you.... I'm sure you dont understand how and I'm growing tired of explaining to you.It was fun for a while but now its boring.
Actually I'm doing my fellow traders a disservice by trying to help you.We need your money melly.

J2-paper curriencies are not worthless by a long shot.I acquired a 3D TV  yesterday which currently is sitting on the lounge room floor, not yet set up. As johniewalker points out money is a means to exchange goods, its  real and the world  will never lose faith in it on a worldwide basis.If you seriously think the big ecomomies of the world will ditch paper curriencies and start carrying around lumps of gold to spend at the supermarket.......Get out of this kind of thinking.Otherwise you will end up as tragic as melly.

Mr Bean asks, where did I get that from?

Now that's tough one, but if one were to even momentarily get his head out of his arse, the answer is obvious..............

BECAUSE oil and other commodities are PRICED is USD's !!!!!! Which basically means USD DOWN = OIL UP.

Or, may be you are naive enough to think that the oil producing nations will start giving it away when the economy crashes along with demand. Eventually the oil market would reach equilibrium, but that would happen LONG AFTER the failing USD took every else down with it. In other words, if the USD collapses, collapse in the global financial system and global economies becomes unavoidable. Such is the beauty of owning the world's reserve currency and being the world's only superpower.

It is disgraceful that someone who lucks even a fundamental understanding of hyperinflation, how many gets created and how the global economy works POSTS HIS OPINIONS ON A FINANCIAL FORUM. And loudly at that.

I'm sure J2BLUE will respond to you himself but I can't resist this one.

Stop creating strawman arguments when your ignorance is revealed. J2BLUE didn't say money is worthless nor that it is not a medium of exchange. What he said was that IT IS BACKED BY NOTHING other than the faith that it can be exchanged for goods and services. It is precisely the breakdown in that FAITH that causes hyperinflation, something that you so erroneously described as "huge inflation".

Enjoy your 3D TV, I highly recommend "Alice in Wonderland" in 3D, you'd fit right in.

If the USD falls by 50% from where it is today, the global economy collapses amid chaos along with it. Soaring oil prices would see to that

your words melly.Your worse than totally confused. I will watch alice in wonderland on my new 3dtv.I notice that the mad hatter has replaced in the new 3D version.His new name is "melanus"

sorry melly I cant waste my time explaining how the world works to you again.Rest in peace.

    yours in disgrace
                     Benny

Typical Mr Bean, often wrong but never in doubt.

But who am I to argue with you, you probably made another 30,000 AUD in your sleep last night again and rushed out to buy yet another of those 3D TVs that you always wanted but could never afford.

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]

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.

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.

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.

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.

43 million (under 14%) on food stamps not 43%.

Thanks charlatan, reading it back that was a silly typo! That number is still so huge it doesn't really change my opinion.

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

I shall preorder that book, thanks!

What is your opinion on the UK housing market?

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.

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.

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.

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.

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?

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.

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.

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

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.

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.

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?

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.

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............

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.

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.

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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/Pa... 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.

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

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.

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

Sometimes I wonder if china uses it to aid its propaganda


And he thinks I'm the conspiracy theorist ?!?!?

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.

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..

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.

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.

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.

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!

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.

they have plenty of 'tools' but all of them are human

deep

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.

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.

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.

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.

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.

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.

I'm not arrogantly claiming I am definitely right*

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.

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.

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.

"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.

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.

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)

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

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.

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.




'

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.

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

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]

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.

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.

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.