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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (67908)	8/10/2006 10:17:17 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

Hoarding is an indication of rising inflation expectations. If you need something 12 months from now, it only makes sense to buy it now, if you expect prices to rise. If you expect prices to fall it makes sense to postpone the purchase until the very last moment.

To: mishedlo who wrote (67908)	8/10/2006 1:53:29 PM
From: bond_bubble	Read Replies (2) \| Respond to of 110194

My opinion is that hoarding is prelude to both deflation and hyperinflation (in monetary terms). If credit deflation were to occur, this excess accumulated inventory will act to reinforce defaults. Sort of like what happened in Telecom industry where replacement cost (laying new fibre) was higher than the existing inventory (already laid underground fibre) - and the hoarders of fibre defaulted like crazy. Similarly, in the futures market, ethanol manufacturers must be signing futures contract with corn growers at high prices! (I'm anticipating high prices to materialize going forward). These ethanol manufacturers have to default or else buy corn at high prices!! I dont think peak prices have been reached. I think peak prices are going to occur in the future. I believe this is what Doug Noland is trying to convey and I believe this is also Andy Xie's and Russ's view. It is wrong to focus on just housing alone and talk about credit deflation. Credit deflation has to be talked in terms of where all the money is flowing during the boom. I believe there is still room for money to flow and continue the boom - housing market anxiety withstanding.

To: mishedlo who wrote (67908)	8/10/2006 6:00:02 PM
From: TimbaBear	Respond to of 110194

Hoarding at this time is an indication of peaking prices. No, hoarding is a sign of flagging faith in the normal course of things. The sign of peaking prices will be when absolutely everybody knows that the hoarded item only goes up. So, in that vein, when my lawn guy and my barber and my mechanic all tell me that (for instance) gold is a great way to protect myself, I'll sell them some of mine. Until then, however, I'll watch as the rest of the herd starts to popularize hoarding as a hedge. I accumulated my hoards several years ago and although they have appreciated rather nicely, I suspect we are still really, really early in the game. Timba