i feel the deflation/inflation debate is as important a debate existent today regards the future.
When Mish was pounding deflation based the price of T-Bonds i challenged that strongly based on the bonds have been supported by the likes of China/Japan and the countries of Arabian Peninsula.
But i think the pull back in spending by the consumer and tightening credit, Mish as a case.
i feel we are at a pivot point and we need have near term open mind.
Mish has stated, he does NOT define inflation/deflation as Saville does, that being money supply.
i have imminent respect for Marc Faber just because his track is good as any i know .
i await his 10/1 newletter to see if he standing with there will a deflationary phase before the ultimate destroyer tales hold, that being galloping inflation,as some call hyperinflation.
Now regards the correlation of money supply and inflation entering into hyperinflation.
Faber a couple years ago said we could come to a saturation where increasing the money supply will NOT help a tightening credit development and comsumers will get ever more squeezed. He said then you will have STAGFLATION .
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i just NOW viewed an interview with Faber via BTV-London, live, as he was being interviewd via statelite hook-up.About 20 minutes.
i recommend all locate in BTV video archives.
But i will go to his statement on GOLD first, so people can stomach the rest:)
He remains supportive that one continue to acquire physical gold as in the longterm it will be the best asset.
Now Faber as been long to dollar since about 72.
And this is where Faber will get controversial, and we need see how this plays out, because this is his view, does not mean he is right, and Faber will be the first to call out a changed view.
But as of now, he still likes the dollar, because the world is facing a massive deep recession and as AWFUL matters in the U.S. they are only worse elsewhere.
As i interpolate, as the FIAT MONEY "gawds" play the currency game pricing paper against other paper they value on a relative basis the "best" of all the bad
This i see as comical madness, but that is how it works.
So for NOW, right or wrong, he remains long the dollar but as he keeps accumulationg gold, which he has been doing for 6 years.
He says the credit bubble got so astronomically out of hand, that he says this 700bilion deal as a joke.
Not only does it makes matters worse for the U.S., but regards this massive disaster, this 700 bilion is JUST A DROP IN THE OCEAN, and will solve nothing.
He said what the U.S. should do what Warren Buffet did, Buffett deal was in no way a bailout, giveaway, the deal will be VERY GOOD for Buffet, the 5 bilion preferred stock he purchased is contingnt on it must yield 10% every year, period.It is in the contract.
Faber SCORNS this Paulson Plan.
i , at this time, oppose his view of the market following the bailout will bear market rally to abot March, and i will say Faber's equity market timing is NOT anything to brag about, and he does NOT brag about--in fact he doesn't brag about ANYTHING.
His call on the U.S. equity market is prosaic, the "we have retested support lows, are oversold , and we are coming to the seasonal season where money enters the market from November to March, so he sees a bearmarket uptrend to maybe March--as i say sounds by the"cook-book" directions call
Me, i remind thatSPX topped in 10/12/2007, and was the REVERSE of the buying season rule last year.
i think Faber maybe lazy here as he recommends NOT owning U.S. equities.
i feel market direction right now is NOT an easy call, that is i would never be calling a bear market rally lasting in toMarch, at this time, no way.
There was a most excellent top notch poster on SI, that went elsewhere that i always respected for saying the longer out you call market direction the more inaccurate you will become.
And limited his calls within the next 30days.
i will state bluntly egotistical gurus lie constantly about the acurracy of their long term calls.
i seen so many say their call was right when in fact it was oft wrong.
A person that studied the gurus, about 70( need see an update--need find site again) and
found their markets calls correct ratio was about 49%(coin flip gurus would be just as acurate.)
The best was 65% and the WORST, was Steve Saville!!!!---at the time of this(about a year ago) Saville was wrong 90% of the time!!!
Enuff, this is a huge subject, i see nothing simple about it, one must analyze ALL angles---and in the post that i felt insulted by only getting only a simplitistic remark in response after i just had happened to expound on the Black SWAN methodology of mental discipline as practiced naturally by both Faber and Soros, it was definite wisdom i was taking the effort to explain.And it is a valuable lesson
But i found it is a TOTAL WASTE of time to try to talk wisdom issues.
No one bothers to listen.
So , why bother? Max |
