As pointed out in another thread income inequality is a big cause of deflation. Forcing willing workers onto the entitlement train via poor economic management is a root cause of the deflation that the same economic managers claim to fear so much. Economy worked well for decades without all the micromanaging. The problem is not too many handouts. The problem lies in creating the need for so many handouts. This leads us back to the execution of economic policy. Appears the socialists may have been right - Capitalism's downfall will be greed from those that control it. I think there's still time to prove them wrong.
<< <i>Capitalism's downfall will be greed from those that control it. >>
Not only have we shifted from a progressive to regressive system of taxation, the paid off politicians freely hand blank checks to the super wealthy. A system which will bring us quickly to third world status.
Hyperinflation will not occur. The bifurcation between the "get more money" side of the population chart and the "get more benefits" side is sustained only by the middle class. The one thing that the get mo money folks most abhor is someone trying to get their money. The one thing that the get mo benefits side abhors is someone trying to cut their benefits. The guy in the middle, aka the middle class, is the food source for both sides of the chart. Darwinian theory would predict that this model is not sustainable without a sufficient middle class. If there was hyperinflation then the middle class would quickly disappear. Doubtful that the gov would let this happen. Hooverville
income inequality is a big cause of deflation. Forcing willing workers onto the entitlement train via poor economic management is a root cause of the deflation
No it isnt. Deflation is a result of things, anything, being over-inflated. The "good ole" economy which we so endear to re-live was extended and exaggerated via excessive debt.
"Forcing" people to the "entitlement train" only prolongs the inflation.
<< <i>I'm pretty sure that the Keynesian socialists and the Rinos have screwed things up pretty good. We shall see. >>
It's the progressives, both republican and democrat. That's why nothing really changes no matter who is in control of our govt, because they bodies are overwhelmingly comprised of progressives on both sides.
Also, folks already "having one of those" results in falling demand for a new one. I recently made a durable goods purchase. Will not need "another one of those" for years.
Our old ones were still servicable, and someone ended up getting them (reconditioned by the delivery company) instead of buying new ones. This type of recycling can be deflationary in the aggregate
<< <i>The main problem is that gov.com only makes the overall situation worse by killing jobs and making it easy to get handouts and creating all sorts of "special classes". My opinion. >>
I agree with that. I think the solution is something that neither party is doing. BO wants to eliminate deductions for the wealthy and add more tax credits and the GOP would keep the deductions for the wealthy. To fix the problem they need to eliminate/reduce some deductions and reduce some of the other tax credits and use the savings to reduce to deficit and even the debt instead of using the savings on other spending. Problem is that neither party will do that.
<< <i>Deflation is a result of things, anything, being over-inflated. >>
or under-demanded. Falling income levels equal falling demand. >>
Lots wrong with this comment, but i'll play along. So over-demand creates inflation? No wonder medical costs are rising. And here I thought it was because of Bernanke.
<< <i>Deflation is a result of things, anything, being over-inflated. >>
or under-demanded. Falling income levels equal falling demand. >>
Lots wrong with this comment, but i'll play along. So over-demand creates inflation? No wonder medical costs are rising. And here I thought it was because of Bernanke. >>
Rickards being an insider of the LTCM derivative's bust and bail out gives him a good view on today's setup. He's forecasting a junk and energy bonds blow up within the next 1-2 years, very similar to LTCM and then Lehman/AIG in 2008. I didn't know that LTCM in 1998 was on the hook for $1 TRILL in derivative's bets, a hefty number for that time. I always thought it was at most in the tens of $BILLIONs. The big banks HAD to work out a deal to bail them out. They settled on $4 BILL.
I know about the losses because I was there. As LTCM’s lead counsel, I was at every executive committee meeting during the height of the crisis that August and September. We were losing hundreds of millions of dollars per day. Total losses over the two-month span were almost $4 billion. But that wasn’t the most dangerous part.
Our losses were trivial compared with to the $1 trillion of derivatives trades we had on our books with the biggest Wall Street banks. If LTCM failed, those trillion dollars of trades would not have paid off and the Wall Street banks would have fallen like dominoes. Global markets would have completely collapsed.
I negotiated a bailout with the leaders of the 14 biggest banks including Goldman Sachs, JPMorgan and Citibank. Eventually, we got $4 billion of new capital from Wall Street, the Federal Reserve cut interest rates and the situation stabilized. But it was a close call, something no one ever wanted to repeat. .....interesting that these lessons of the counter-party failing fell mostly on deaf ears in 2007-2008.
Even for us Americans, goods priced in Swiss Francs got 30% more expensive last week. Hyperinflation? Probably not since we probably don't too many goods from there.
Also note that the Swiss gov't gave no advanced warning of that move - it could not have been predicted. Those who think they'll wait to divest out of dollar assets will be disappointed.
But what if China did the same thing? I'd have to guess that prices on just about everything double overnight.
Japan has been living with deflation since the early 1990's. Every trick in their central bank book has failed to end it. Now that it has become a worldwide "problem," other central banks are now panicking with similar desperate action. 2015 is shaping up to become the year the chickens come home to roost.
<< <i>We are in a worldwide mild deflation. This benefits holders of financial assets and works against almost everyone else.
The Swiss are so smart. Stay out of other peoples wars, just hold their money.
The Chinese cannot do a surprise like the Swiss, it would greatly harm their economy. >>
China can't - and won't - stay pegged to the dollar forever. >>
China has been making slow adjustments for years.
The Swiss was very easily predicted. Just as some on here keep saying things are "unsustainable", so was the Swiss peg to the Euro. By definition, unsustainable situations are very predictable. I would venture to say that smart people began to price in this move the day the referendum to add gold to the reserves are defeated.
<< <i>China has been making slow adjustments for years.
The Swiss was very easily predicted. Just as some on here keep saying things are "unsustainable", so was the Swiss peg to the Euro. By definition, unsustainable situations are very predictable. I would venture to say that smart people began to price in this move the day the referendum to add gold to the reserves are defeated. >>
Just being predictable isn't any value, you have to have a time frame. There are several things about the US economy that are unsustainable and demise or change to those aspects of the economy is predictable, but good luck. Did you read or see anywhere anyone predicting the end of the Swiss peg in January? As recently as December, the SNB was reiterating the need for the peg Link, so if anyone expects to get any hints from the banks or the government you're delusional. It (the timing) will ALWAYS be a surprise..
I wouldn't call anything that "stunned" traders as having been predicted.
So if you want to talk about predictable, it is very predictable that China will eventually remove their peg from the dollar. That too is a situation that is unsustainable, especially as they aspire to eventual reserve currency status. Good luck pinpointing a time frame for that one.
"stunned" people are rarely "smart" people, which is the opinion I expressed.
Yes, timing is difficult, but thats not really the point. If you know something is inevitable, you either take the opposite side or no side at all.
You actually think smart traders are going to show their hand? There is a reason why they are smart.
Imagine how much the Chinese would buy from America if their currency was stronger. I cant wait for the Chinese Yuan to become the worlds reserve currency.
Martin Armstrong told the Europeans during the December 2012 Berlin, World Economic Conference that the Swiss/Euro peg was going to fail. It was inevitable. All pegs eventually fail. More info available on his site.
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere.
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere. >>
Absolutely correct. The stock market hasn't gone up because companies are more productive and more profitable. There are too many dollars chasing too few shares.
On another topic, gold, interesting fact: I just checked and the ETF GLD has about half of its peak holdings now compared to Nov 2012 which amounts to about 725 Tonnes.
Humans now, at long last, know everything and have even learned to repeal the laws of nature. You can take more out of a leaky bucket than you put into it so long as you toss in IOU's and give all the profirts to the few and the mnany who don't work. Schools don't need to teach reading and writing or math when computers can do it all for you.
Since the buckets won't go empty there's no need to print money and no need for inflation.
The leaders must know what they're doing or they wouldn't be getting ever richer.
Just buy soylent green and tin futures and you can get in on the gravy train, too.
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere. >>
I didnt say there wasnt. Im just saying that im hearing a lot more people talk about deflation whereas 6 years ago I heard virtually no one. Then all we heard was inflation, hyperinflation, stagflation...check these threads for proof.
Im just wondering, perhaps out loud, if the pendulum is beginning to swing? I didnt say I was jumping off just yet, and im usually early, but the fire around my bull dollar campfire that I started and built several years ago (remember jmski?), is betting a bit warm and im slowing moving away. I'll probably ransack a few a saddlebags and steal a few horses on my way out. Tis better to be a few counties away when dawn arises.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
>>
They've done so much talking and promising I think that they will actually raise rates just to save face... but it will be a meaningless 0.1%. Not even a full .25%. Just to say they did.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
>>
They've done so much talking and promising I think that they will actually raise rates just to save face... but it will be a meaningless 0.1%. Not even a full .25%. Just to say they did. >>
7 years of recovery and world rates at zero. Perhaps so much of a recovery after all.
I have to throw in the towel on my short SP500 move. It didn't exactly take off but it's not going down. The bankers have been able to keep it propped up.
Gold is doing well and I'm up on the added position from yesterday's dip. I think we'll see a few days of sideways-to-slightly-up consolidation. Gold is holding this move well, especially in lieu of a really strong dollar. It is certainly behaving differently.
Anyone here think this move is sustainable? This is the USD index, weekly chart.
One more question. Does anyone have any insight on mortgage rates? Would you lock in now or wait a few weeks and see if you can get something lower?
"When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself - What they really want is endless growth.
The next thought you should have is Hey, is that even possible? Or even, advisable?"
"When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself - What they really want is endless growth.
The next thought you should have is Hey, is that even possible? Or even, advisable?" >>
Interesting point. The CB's have a "goal" of 2% inflation. But what is wrong with stability and 0 inflation? Nothing! The manipulation of the economy to achieve inflation is a scam to benefit the elite.
Comments
Knowledge is the enemy of fear
Give Me Liberty or Give Me Debt
<< <i>Capitalism's downfall will be greed from those that control it. >>
Not only have we shifted from a progressive to regressive system of taxation, the paid off politicians freely hand blank checks to the super wealthy. A system which will bring us quickly to third world status.
Hooverville
No it isnt. Deflation is a result of things, anything, being over-inflated. The "good ole" economy which we so endear to re-live was extended and exaggerated via excessive debt.
"Forcing" people to the "entitlement train" only prolongs the inflation.
Knowledge is the enemy of fear
<< <i>I'm pretty sure that the Keynesian socialists and the Rinos have screwed things up pretty good. We shall see. >>
It's the progressives, both republican and democrat. That's why nothing really changes no matter who is in control of our govt, because they bodies are overwhelmingly comprised of progressives on both sides.
<< <i>Deflation is a result of things, anything, being over-inflated. >>
or under-demanded. Falling income levels equal falling demand.
Give Me Liberty or Give Me Debt
Our old ones were still servicable, and someone ended up getting them (reconditioned by the delivery company) instead of buying new ones. This type of recycling can be deflationary in the aggregate
Liberty: Parent of Science & Industry
Greece had problems but also had a lot of debt paid cents on the dollar eventually and no CDS were triggered because no one said default.
<< <i>The main problem is that gov.com only makes the overall situation worse by killing jobs and making it easy to get handouts and creating all sorts of "special classes". My opinion. >>
I agree with that.
I think the solution is something that neither party is doing. BO wants to eliminate deductions for the wealthy and add more tax credits and the GOP would keep the deductions for the wealthy. To fix the problem they need to eliminate/reduce some deductions and reduce some of the other tax credits and use the savings to reduce to deficit and even the debt instead of using the savings on other spending. Problem is that neither party will do that.
<< <i>
<< <i>Deflation is a result of things, anything, being over-inflated. >>
or under-demanded. Falling income levels equal falling demand. >>
Lots wrong with this comment, but i'll play along. So over-demand creates inflation? No wonder medical costs are rising. And here I thought it was because of Bernanke.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Deflation is a result of things, anything, being over-inflated. >>
or under-demanded. Falling income levels equal falling demand. >>
Lots wrong with this comment, but i'll play along. So over-demand creates inflation? No wonder medical costs are rising. And here I thought it was because of Bernanke. >>
Increased demand = higher prices. Econ 101.
Give Me Liberty or Give Me Debt
Liberty: Parent of Science & Industry
Knowledge is the enemy of fear
Give Me Liberty or Give Me Debt
Knowledge is the enemy of fear
BTW, the USD is rising sharply against the CAD again today, probably not an imminent sign of hyperinflation, I guess?
Sen. Feinstein's husband's company stands to profit handsomely ($1 BILL in commish) on sale of 56 USPO buildings. Good work if you can get it.
Apparently locking into a desert gold mine wasn't good enough
Rickards being an insider of the LTCM derivative's bust and bail out gives him a good view on today's setup. He's forecasting a junk and energy bonds blow up within the next 1-2 years, very similar to LTCM and then Lehman/AIG in 2008. I didn't know that LTCM in 1998 was on the hook for $1 TRILL in derivative's bets, a hefty number for that time. I always thought it was at most in the tens of $BILLIONs. The big banks HAD to work out a deal to bail them out. They settled on $4 BILL.
I know about the losses because I was there. As LTCM’s lead counsel, I was at every executive committee meeting during the height of the crisis that August and September. We were losing hundreds of millions of dollars per day. Total losses over the two-month span were almost $4 billion. But that wasn’t the most dangerous part.
Our losses were trivial compared with to the $1 trillion of derivatives trades we had on our books with the biggest Wall Street banks. If LTCM failed, those trillion dollars of trades would not have paid off and the Wall Street banks would have fallen like dominoes. Global markets would have completely collapsed.
I negotiated a bailout with the leaders of the 14 biggest banks including Goldman Sachs, JPMorgan and Citibank. Eventually, we got $4 billion of new capital from Wall Street, the Federal Reserve cut interest rates and the situation stabilized. But it was a close call, something no one ever wanted to repeat. .....interesting that these lessons of the counter-party failing fell mostly on deaf ears in 2007-2008.
Also note that the Swiss gov't gave no advanced warning of that move - it could not have been predicted. Those who think they'll wait to divest out of dollar assets will be disappointed.
But what if China did the same thing? I'd have to guess that prices on just about everything double overnight.
works against almost everyone else.
The Swiss are so smart. Stay out of other peoples wars, just hold their money.
The Chinese cannot do a surprise like the Swiss, it would greatly harm their economy.
<< <i>We are in a worldwide mild deflation. This benefits holders of financial assets and
works against almost everyone else.
The Swiss are so smart. Stay out of other peoples wars, just hold their money.
The Chinese cannot do a surprise like the Swiss, it would greatly harm their economy. >>
China can't - and won't - stay pegged to the dollar forever.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Give Me Liberty or Give Me Debt
<< <i>
<< <i>We are in a worldwide mild deflation. This benefits holders of financial assets and
works against almost everyone else.
The Swiss are so smart. Stay out of other peoples wars, just hold their money.
The Chinese cannot do a surprise like the Swiss, it would greatly harm their economy. >>
China can't - and won't - stay pegged to the dollar forever. >>
China has been making slow adjustments for years.
The Swiss was very easily predicted. Just as some on here keep saying things are "unsustainable", so was the Swiss peg to the Euro. By definition, unsustainable situations are very predictable. I would venture to say that smart people began to price in this move the day the referendum to add gold to the reserves are defeated.
Knowledge is the enemy of fear
<< <i>China has been making slow adjustments for years.
The Swiss was very easily predicted. Just as some on here keep saying things are "unsustainable", so was the Swiss peg to the Euro. By definition, unsustainable situations are very predictable. I would venture to say that smart people began to price in this move the day the referendum to add gold to the reserves are defeated. >>
Just being predictable isn't any value, you have to have a time frame. There are several things about the US economy that are unsustainable and demise or change to those aspects of the economy is predictable, but good luck. Did you read or see anywhere anyone predicting the end of the Swiss peg in January? As recently as December, the SNB was reiterating the need for the peg Link, so if anyone expects to get any hints from the banks or the government you're delusional. It (the timing) will ALWAYS be a surprise..
And it wasn't that predictable. All you have to do is look at the headlines:
Swiss bid to peg 'safe haven' franc to the euro stuns currency traders
I wouldn't call anything that "stunned" traders as having been predicted.
So if you want to talk about predictable, it is very predictable that China will eventually remove their peg from the dollar. That too is a situation that is unsustainable, especially as they aspire to eventual reserve currency status. Good luck pinpointing a time frame for that one.
Yes, timing is difficult, but thats not really the point. If you know something is inevitable, you either take the opposite side or no side at all.
You actually think smart traders are going to show their hand? There is a reason why they are smart.
Imagine how much the Chinese would buy from America if their currency was stronger. I cant wait for the Chinese Yuan to become the worlds reserve currency.
Knowledge is the enemy of fear
Give Me Liberty or Give Me Debt
Knowledge is the enemy of fear
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
Not quite everyone.
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
It's a runaway, best to go ahead and jump.
Give Me Liberty or Give Me Debt
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere.
<< <i>
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere. >>
Absolutely correct. The stock market hasn't gone up because companies are more productive and more profitable. There are too many dollars chasing too few shares.
On another topic, gold, interesting fact: I just checked and the ETF GLD has about half of its peak holdings now compared to Nov 2012 which amounts to about 725 Tonnes.
of nature. You can take more out of a leaky bucket than you put into it so long as you
toss in IOU's and give all the profirts to the few and the mnany who don't work. Schools
don't need to teach reading and writing or math when computers can do it all for you.
Since the buckets won't go empty there's no need to print money and no need for inflation.
The leaders must know what they're doing or they wouldn't be getting ever richer.
Just buy soylent green and tin futures and you can get in on the gravy train, too.
And the FED is still talking about rate hikes.
Give Me Liberty or Give Me Debt
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
<< <i>
<< <i>Everyone jumping on the deflation train. Hmmm. I think my stop is coming up shortly. >>
There's still tons of price inflation. Much of that has shown up in the stock markets, high end consumer markets, USD, etc. Those $TRILLs of QE had to go somewhere. >>
I didnt say there wasnt. Im just saying that im hearing a lot more people talk about deflation whereas 6 years ago I heard virtually no one. Then all we heard was inflation, hyperinflation, stagflation...check these threads for proof.
Im just wondering, perhaps out loud, if the pendulum is beginning to swing? I didnt say I was jumping off just yet, and im usually early, but the fire around my bull dollar campfire that I started and built several years ago (remember jmski?), is betting a bit warm and im slowing moving away. I'll probably ransack a few a saddlebags and steal a few horses on my way out.
Knowledge is the enemy of fear
<< <i>
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
The market has already raised rates.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
The market has already raised rates. >>
I must have missed that. When did the market raise the Fed Funds rate?
<< <i>
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
They've done so much talking and promising I think that they will actually raise rates just to save face... but it will be a meaningless 0.1%. Not even a full .25%. Just to say they did.
<< <i>
<< <i>
<< <i>
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
The market has already raised rates. >>
I must have missed that. When did the market raise the Fed Funds rate?
You look at the wrong rates.
Knowledge is the enemy of fear
Give Me Liberty or Give Me Debt
<< <i>
<< <i>
<< <i>Seven central banks take anti-deflationary actions in the past week
And the FED is still talking about rate hikes.
The events of the past few months should end all rate hike talk rather quickly but have not. Let me be the first, "There will be no change in 2015".
They've done so much talking and promising I think that they will actually raise rates just to save face... but it will be a meaningless 0.1%. Not even a full .25%. Just to say they did. >>
7 years of recovery and world rates at zero. Perhaps so much of a recovery after all.
Gold is doing well and I'm up on the added position from yesterday's dip. I think we'll see a few days of sideways-to-slightly-up consolidation. Gold is holding this move well, especially in lieu of a really strong dollar. It is certainly behaving differently.
Anyone here think this move is sustainable? This is the USD index, weekly chart.
One more question. Does anyone have any insight on mortgage rates? Would you lock in now or wait a few weeks and see if you can get something lower?
"When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself - What they really want is endless growth.
The next thought you should have is Hey, is that even possible? Or even, advisable?"
Give Me Liberty or Give Me Debt
<< <i>The central bank folly of "endless growth"
"When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself - What they really want is endless growth.
The next thought you should have is Hey, is that even possible? Or even, advisable?" >>
Interesting point. The CB's have a "goal" of 2% inflation. But what is wrong with stability and 0 inflation? Nothing! The manipulation of the economy to achieve inflation is a scam to benefit the elite.
Population change - births & immigration
Would there be room in the market to absorb new products?
Growth for retirement savings?
Is there a goldilocks equilibrium ? If so, it'd be impossible to maintain.
<< <i>just closed on a property at 3% APR. >>
Sounds like a 15 year