Someone else knocking at the door. Inflation?

Justacommeman

Worlds largest bond fund manager see US inflation in medium term

MJ

jmski52

Interesting. I always thought that he and Bill Gross at Pimco were in the "other camp", but lately they've both been fairly skittish towards longterm Treasuries.

Not sure what that means...

Justacommeman

Nassim Nicholas Taleb the author of The Black Swan ( a must read - even though it was a tough read, at least for me) was on Bloomberg today and had some interesting things to say about Treasuries

MJ

jmski52

I forget who I was listening to (on the riding mower) last night (probably Savage Nation), but if I am not mistaken they were saying that Taleb was the one who caused last week's stock market meltdown with some of his orders. I haven't seen any other reports about that, have you heard anything?

It makes me wonder whether that was a "shark bump" in order to test the system for vulnerabilities...

Justacommeman

The market was down 300 plus points and heading south fast anyways BEFORE the plunge to minus 964. Was it exacerbated by a consentrated trade? Or a weakness in the routing system? Or a transparent technical sell program triggered if the market could get pushed the number? My guess is yes to all of the above. MJ

cohodk

Any inflation will be short lived. Companies have no pricing power. Wages are not going up. There is no imbalance in supply and demand. Tough for inflation to take root in that environment.

From Greece to Portugal to New Jersey to California, govts have proposed or begun spending cuts. We'll have to see if they actually follow through., but if they do then this is disinflationary. The weight of debt is heavy, and it is crushing economies across the globe. At least in the USA, people are beginning to stand up and demand fiscal responsibility. America will not let itself fall into oblivion.

In the "old" days, families and neighbors took care of each other. But something changed in the last 50 years. I find it interesting how the Baby boomers (and im speaking generallly) initially wanted a communal society. Peace and love. Somewhere along they way they opted for McMansion's and isolation. I think in their collective wisdom, they will revert to the way of their parents and grandparents. If households become extended, this reduces the demand for more housing and related services. This is disinflationary. We need to fix the immigration problem. We need people to move here, but not live on the dole. If we do not get population growth, then we get no economic growth. No economic growth means no pricing power. No pricing power, means no inflation.

Eventually, we may end up printing more money than we need. Without velocity of money, we have no inflation.

Gonna be an interesting 25 years.

jmski52

Eventually, we may end up printing more money than we need. Without velocity of money, we have no inflation.

You can't ignore the dollars that have been printed up and sent overseas that are now functioning as the world's reserve currency, and the money velocities in the countries that hold those dollars. Bernake thinks you can ignore that, but I don't. Just a thought.

jmski52

Nassim Nicholas Taleb the author of The Black Swan ( a must read - even though it was a tough read, at least for me) was on Bloomberg today and had some interesting things to say about Treasuries

MJ

Sinclair has the interview linked on his website, and it is on youtube apparently. NYU has a Risk Engineering School/Department? I pretty much agree with everything he is saying...

halfhunter

Inflation, at least in consumer goods, will occur only as Walmart allows it to!

HH

Justacommeman

"This potential evolution from disinflation to inflation will likely proceed at different speeds in different parts of the globe. It is already well in train in emerging economies and will remain so," El-Erian wrote.

"This week gold prices rose to a record above $1,240 an ounce on concerns about the spread of Europe's sovereign debt crisis. Flight into gold can also reflect investors' concerns about the potential for paper currencies to depreciate because of central banks' looser lending policies and worries that inflation could gain momentum."

More then germs of truth imo..................MJ

curly

<< <i>Gonna be an interesting 25 years. >>



When it's over, write me a letter and tell me how it ended up, will ya, brother? Just give the letter to the nearest groundhog. He'll be delivering my mail by then.

Baley

LoL Curly... it doesn't "end up".

it keeps going. "To Be Esteemed, Be Useful" never goes out of style

Inflation may erode savings, but it rewards usefullness.