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

To: GST who wrote (90094)	1/4/2008 4:04:45 PM
From: I_C_Deadpeople	Read Replies (3) \| Respond to of 110194

I am pretty much in the same line of thinking GST. Question - with the exception of the 30's, has there been any deflations in North America that you are aware of going back an extra 100 years or so? My recollection from various readings is no...

To: GST who wrote (90094)	1/4/2008 6:19:13 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

Going forward it is highly unlikely there will ever be inflation in my lifetime. Deflation is a very, very rare event -- so rare that it is almost impossible to come up with meaningful examples of it. Inflation is not only the norm, it is the dominant mode for all industrialized countries active in the global economy -- it is extremely difficult to identify any examples of deflation anywhere in the world in the past 50 years -- Japan being an exception. The general and extremely persistent trend in price levels across all currencies and all countries has been and continues to be inflation. Present circumstances point towards a sharp upward rise of the rate of inflation. We have enjoyed moderate inflation in the last ten years or more -- but the trend has shifted in recent years and threatens to lead to much worse inflation.' I agree..we are in such a different period today unlike anything I've ever experienced in my adult life...I was just too young to experience the stagflation of the 70's. Our deflationary moments were brief periods in the early 1990's and early 2000's.. A markdown and loss of even a trillion dollars from this credit crunch going to money heaven isn't deflationary. Look at the RTC when commercial RE nationwide fell 60-70%, look at the tech crash, look at the money we've blown in Iraq.. Really it is the broad money supply growth and the astounding percentage increases in basic commodities like copper, silver, oil and gold along with agriculture like wheat, corn ect.. that tell the story.. Anyone think there was a reason our government suddenly stopped publishing M3?

To: GST who wrote (90094)	1/4/2008 6:26:28 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

'It is like the difference between a headache and a brain tumor -- everybody gets headaches, but brain tumors are thankfully not that common. If you got your medical advice on threads like the one Mish runs, you would be told that you are developing three or four brain tumors a week -- every week. Actually, the odds that most people will get three or four brain tumors a week are probably higher than the odds of deflation in the US a this point in time.' Amazing how most of the talking heads on CNBC don't think inflation is a problem.. Leisman looked at as a loonie by others today from Kudlow to Insana to Reich.. Hey we can cut all we want cause inflation isn't the problem, We need to end the credit crunch and avoid another modest recession at any cost<g>

To: GST who wrote (90094)	1/4/2008 7:21:08 PM
From: loantech	Read Replies (2) \| Respond to of 110194

<Going forward it is highly unlikely there will ever be inflation in my lifetime. > You meant deflation right?

To: GST who wrote (90094)	1/4/2008 7:36:40 PM
From: sea_biscuit	Respond to of 110194

It is like the difference between a headache and a brain tumor -- everybody gets headaches, but brain tumors are thankfully not that common. If you got your medical advice on threads like the one Mish runs, you would be told that you are developing three or four brain tumors a week -- every week. About a year or so ago, their theory was that Bernanke has to go for either deflation or hyperinflation (the so-called "Zugzwang" situation - wikipedia has more details on this word). That seemed fairly well-reasoned. However, now their theory is that the Fed cannot (or would be unwilling to) choose hyperinflation and therefore, we have no choice but to enter into a deflationary phase. Mish and his deflationist pals have to be held against this, because I am sure that once the reflation starts taking hold, they will start blaming the Fed for causing a situation that they (the deflationists) had claimed that the Fed cannot, or would be unwilling to, engineer! Now, I can understand that we will see deflation in terms of assets like gold and silver. So we could see house prices, stocks etc. falling in terms of gold/silver. But how can there be deflation in terms of something that can be produced in vast abundance, in terms of billions and even trillions at the mere touch of a computer key?! All deflationists please note - Bernanke has promised that there will be no deflation because of the existence of the "printing press" (Bernanke's words, not mine). And some 2 years or so ago, the head Bubbleman (aka Sir Alan) has made it clear that all social security obligations will be met, not only for now but for all the future years... in nominal dollar terms. Now, that should be a clue to what is in store for us in the coming years!

To: GST who wrote (90094)	1/4/2008 11:36:13 PM
From: Chaka	Read Replies (1) \| Respond to of 110194

The general and extremely persistent trend in price levels across all currencies and all countries has been and continues to be inflation. Present circumstances point towards a sharp upward rise of the rate of inflation. We have enjoyed moderate inflation in the last ten years or more -- but the trend has shifted in recent years and threatens to lead to much worse inflation. Looking at current milk and gas prices, one might naively think that future inflation will continue to shoot up. But predicting the future of inflation is no easy task. If you want some independent, professional analysis, subscribe to ECRI (http://www.businesscycle.com/). Their future inflation gauge for U.S. has been dropping for several months with the smoothed annualized growth rate at -4.6% in December 2007. Sure, they are not predicting deflation (at least not yet) but, currently they are definitely not seeing "sharp upward rise of the rate of inflation" and they believe the FED has sufficient room to cut rates. P.S. You may or may not choose to believe ECRI but some points arguing for their merit: they correctly predicted several previous economic turning points well before mass media (and did not mis-predict any), they are an independent entity in existence for several decades and they are entirely dependent on professional subscriptions for their funding.

To: GST who wrote (90094)	1/7/2008 10:00:26 AM
From: Horgad	Read Replies (1) \| Respond to of 110194

So you believe that current overall price trends are up and were up before the current housing woes. But do you agree with my broad view of current and past more specific price trends in the US? "Before: low energy prices, low commodity prices, low food prices, low priced junk from China, rising dollar, rising stock market, rising house prices, flat to rising salaries. In other words for most people lower living costs, rising asset values, and flat to rising incomes. Now: high energy prices, high commodity prices, rising food prices, rising prices of junk from China, falling dollar, flat (soon to be?) falling stock marker, falling house prices, falling salaries. In other words for most people higher living costs, falling asset values (some completely destroyed), and falling incomes."

To: GST who wrote (90094)	1/8/2008 3:25:33 PM
From: sea_biscuit	Read Replies (2) \| Respond to of 110194

I have seldom visited Mish's thread after I was banned, and I am already feeling a lot better! It really got sickening being a perma-bear deflationist and being proved wrong again and again and again by the stock-market advances and more importantly, rising prices of all essential stuff all these years... I really wonder how it is possible to go on being wrong for years and years and years. I have heard that some stock perma-bears lived like that all through the 80's and the 90's, and those who actually followed their own advice are now patrons of their city's transport systems since they can't afford a car! :-)

To: GST who wrote (90094)	1/22/2008 9:09:11 AM
From: sea_biscuit	Read Replies (3) \| Respond to of 110194

The deflationists out there are celebrating that they have been proved correct! So funny. Makes no sense to me whatsoever. Why can't there be new (nominal) highs later in the year? The Fed is ready to drop money via helicopters if that is what it takes to make a new nominal high. It is downright stupid to say that prices will fall in terms of something that the Fed has virtually promised to produce in trillions, even quadrillions if need be. But it makes a lot of sense to say that the Dow will be selling for 10 or 12 ozs of gold (from the present 13.5 ozs or so). So Dow = 14400 and gold = 1200 is well within the realm of possibilities.