Roger Ramjets
Philosopher
"Operation Twist"? First applied in 1961.lol! and what date did it start? might you find it was before 01 Jan this year?
Should be producing hyperinflation right about... Now!
Inflation!! No wait...
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Should be producing hyperinflation right about... Now!
psionl0
Skeptical about skeptics
If you short all the gold you can get your hands on, borrow all the money that the banks will let you have and invest it in real estate then you will grow as rich as Kevsta grows poor.
kevsta
RBL CHeck Failed
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can you be more specific? wrong on what, and which sources?
if it gives you any comfort, I expect you already are doing more or less the exact opposite of me. I can advise you exactly what I will and wont be doing and you can crack on?
for example:
- I wont be buying property for at least another 5 years, maybe 10.
- I wont be buying any government bonds or any paper "investments" and especially so the stock market**.
- I wont be keeping any significant amount in any FIAT regimes, converting the government tax tokens into, and saving exclusively in precious metals
so the chances are your retirement is already everywhere that I am not, and you are already positioned diametrically opposite to me, however as psionl0 said.. if you actively want to bet, short PMs, long real estate with a good dose of government repression bonds thrown in for, well repression really.
** note I am day trading quite a lot now, so do "buy" indices on occasion, however always with a clear profit target and duration (measured in minutes) and in the case of the stock markets I am selling (short) much more often than buying (long).
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kevsta
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although to be fair you have a long way to go to catch up already as Ive been effectively short UK housing since 2005, and long gold since 2009.
so these dubious sources have been pretty spot on so far
http://www.moneyweek.com/investments/property/uk/uk-house-prices-valued-in-gold-20700
Chart (source Professor Tom Fischer, of the University of Wuerzburg)
That definition of inflation is useless if one is trying to understand the punitive effects of our never-ending fiat money and debt system.
They contribute to consumer price inflation when financial asset holders take their ill-gotten interest and use it to consume real goods and services, thereby squeezing out everyone else who actually has to earn the money required to consume real goods and services (by first actually producing real goods and services). It's nothing more than a thinly-veiled form of regressive wealth transfer.
Note that not all gains from financial assets are "ill-gotten", especially if the principal was funded by real savings (as opposed to fiat money credit), but to the extent that financial asset prices are driven by currency debasement, they are.
The official definition of inflation is purposefully myopic, so as to mislead the ignorant into minimizing the impact of monetary "policy".
Or perhaps hyper-stagflation, or hyper-reflation, or hyper non-flation. Hyper-something anyway, for sure!
You assurance is comforting because some of us might not last another 3 decades, and we wouldn't want to miss this hyper-whatever. However we still don't know when to expect it. Would it be possible to make your prediction a bit more precise, so that we may have a better idea of when to start looking out for it?
When it becomes apparent that US Government bonds aren't worth the paper they're printed on, or the electronic bits that represent them in a computer, you will see a collapse in the Treasury market, which will result in an avalanche of money seeking real goods. There are a lot of factors that will serve to offset and/or delay this process, but it is inevitable.
Roger Ramjets
Philosopher
Sorry, but you don't get to redefine a word just because it suits you.
And what about all those 'traders' who make money out of currency fluctuations? They are not producing any 'real' goods and services, just taking advantage of imperfect information to divert funds into their own pockets.
But how much affect do these activities actually have? If transaction and administration costs are low then banks can work on very low margins, so their contribution to inflation should be minimal. Similarly, currency traders are trying to make money from short-term fluctuations of only a few percentage points (and they don't always win!) so overall they may not have much affect. Furthermore, banks and traders do provide some valuable 'real' services, and they should be entitled to receive income for that.
So what is justifiable earnings, and what is usury/ill-gotten gains? Without banks and traders our economy would grind to a halt very quickly, so they must be providing some value. How do you accurately calculate the total effect that they have on the prices we pay, and how do you separate that out from other inflationary pressures? The answer is, you don't. That is why inflation is defined as the actual rise in prices of goods and services, not some speculative value based on supposed 'ill-gotten interest driven by currency debasement'.
Short version: "I don't know when".
kevsta
RBL CHeck Failed
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And what about all those 'traders' who make money out of currency fluctuations? They are not producing any 'real' goods and services, just taking advantage of imperfect information to divert funds into their own pockets.
But how much affect do these activities actually have? If transaction and administration costs are low then banks can work on very low margins, so their contribution to inflation should be minimal. Similarly, currency traders are trying to make money from short-term fluctuations of only a few percentage points (and they don't always win!) so overall they may not have much affect. Furthermore, banks and traders do provide some valuable 'real' services, and they should be entitled to receive income for that.
lol, how very gracious of you
you should really differentiate here between institutional / HFT trading and for example a small independent retail trader. as an newbie example of the second kind, let me explain how it is.
a) Forex trading is a zero sum game, my win is another's loss, and vice versa.
b) the only win-winners are the brokers (and the banks behind them) taking the spread on my every transaction whether I win or lose.
a trader takes on risk, with our money, ie risk of not having it any more if you are wrong, just like investing in any business really.
and yes you are correct, more than 90% of traders fail to be consistently profitable over longer durations, leaving 10% or so winning all the time.
so if I am prepared to put my money on the line, to speculate on my financial opinions, in this utter joke of a centrally (and otherwise) manipulated market, why on earth should I not be allowed to profit from being correct in my assessments of things?
the "traders" you should be focusing on are the companies with co-located Unix servers in the exchanges with 100% winning quarters, that is not "trading" that is basically legitimized theft.
not only that, theyre using OPM (other peoples money) and an implicit taxpayer guarantee against losses anyway.
see paragraph above
you really do need to separate these two, except in the cases where they are the same thing, and call themselves "market makers"
ok so, because price rises might not appear in your carefully chosen, manipulated, basket of substituted, hedonicized, imputated goods and services, yet we know that debasement does create inflation, and it will go somewhere, stocks, commodities, other countries etc, you say it doesn't exist because the only prices you are looking at, dont show it yet?
again, you are using the wrong definition.
the world is going to see biflation - rising commodity & energy prices (things we need) and falling asset prices on anything that required leverage to buy (things we want)
trying to prevent the second part, must create and fuel the first.
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Sure I do, as long as I'm prepared to support the reasons why, and I am.
And what about all those 'traders' who make money out of currency fluctuations? They are not producing any 'real' goods and services, just taking advantage of imperfect information to divert funds into their own pockets.
Traders who speculate with their hard-earned savings, and who bear all of the risk of their actions provide liquidity to the market. There is nothing wrong with speculation, in and of itself. The problem is with financial asset speculation funded by practically unlimited central-bank credit, in essence, counterfeit money.
With all due respect, you don't understand the point that was made. Currency devaluation, such as what occurs with monetary "easing", is a form of legal counterfeiting. If the distribution of this purchasing power were uniform throughout society, the real effects would be negligible, and nominal prices of things, including financial assets, would be higher. In reality, the big beneficiaries of monetary stimulus are Wall Street primary dealers, the big banks. These banks take this fiat-money funded credit and either loan it to their customers, or speculate in financial markets directly. Thus, this institutionally counterfeit money winds up in the form of bids in financial asset prices, which fund the realized and unrealized capital gains of financial asset sellers and holders. Dovish monetary policy translates into regressive redistribution of wealth to the super-rich, namely elite financial asset holders, and specifically the ones who have direct access to the cheap money to fund their speculation. It's doubly profitable when you consider that many of their losses of the biggest banks are simply socialized under the threat of systemic failure.
I've already demonstrated how currency devaluation results in higher financial asset prices, even if the "consumer" price index doesn't budge. This is a de facto subsidy of financial asset holders, specifically the ones who get to borrow at ridiculously low rates, and have their losses assumed by the public. When these financial asset holders sell, sometimes the capital gains are used to ramp up their personal consumption and improve their standards of living, and sometimes they're flipped into other financial assets with an eye to capturing even more illicit purchasing power in the future.
The bottom line is, the effects of legal countefeiting don't magically change just because it's called "credit", and because the profits wind up as bids on financial assets.
If you speculate with your own savings, or borrow the money from a willing and informed lender of their own savings, that is entirely justifiable. If you're a central bank crony with access to hundreds of billions of fiat dollars at twenty-five basis points, that is not.
I agree with this, which is why I think trying to pick a bottom in real estate is catching a falling knife.
Free Market speaks again. Apparently the Free Market deems the US dollar to be too strong.
P&G to Philip Morris Blame Currency for Forecast Cuts
P&G to Philip Morris Blame Currency for Forecast Cuts
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With hindsight, yes, but anyone who claims to be able to predict future prices with any degree of accuracy is deluded.
Krugman made me think of this thread.
http://krugman.blogs.nytimes.com/2015/01/28/whitewashing-the-crazy-fed-edition/
Dollar up, CPI down.
http://krugman.blogs.nytimes.com/2015/01/28/whitewashing-the-crazy-fed-edition/
Dollar up, CPI down.
If you short all the gold you can get your hands on, borrow all the money that the banks will let you have and invest it in real estate then you will grow as rich as Kevsta grows poor.
Fool that I am I did not do so.
PS. FED is continuing super low rates due to lack of inflation.
psionl0
Skeptical about skeptics
You shouldn't have had so much faith in kevsta.
All hail Krugman! The dude was RIGHT On The Money, about money & inflation.
Sorry for the bump, but this is 4 years in the making and a real test & result of predictions from those that screamed HYPERINFLATION and those with a bit more rational outlook.
Sorry for the bump, but this is 4 years in the making and a real test & result of predictions from those that screamed HYPERINFLATION and those with a bit more rational outlook.