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Some meandering thoughts

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    Some meandering thoughts

    About 4 odd years ago on these forums I speculated that we'd see 13k on the DJI (it was about 8k ish I think)- if you care about the provenance you can check the economy thread. Anyhow I've been thinkin and I'm sure inflation is coming soon (about 2 years) . We are in a government bond bubble and the only way they can keep it inflated is by continuing to print. Krugman is wrong (though not entirely so albeit for wrong reasons) . Real growth in the global economy can only come via productivity and there are some green shoots (3D printing - if you don't know what it is you should learn fast- intolerance for big government in Europe etc etc) .

    If you have a mortgage fix if you have cash buy hard assets inflation is on the way . As always I'm no FSA and I'm just speculating (ie I won't be sued if you lose) just sometimes I get kinda a strong feeling about something and this is one such occasion. Make of it what you will.
    I believe that all government is evil, and that trying to improve it is largely a waste of time.
    HL Mencken

    #2
    I agree, historically low interest rates for a decade or more has to give some time. if it doesnt we are all (the west) in deep trouble anyway so might as well gamble and invest where possible
    My computer thinks I'm gay
    What's the difference anyway
    When all the people do all day
    Is stare into a phone

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      #3
      Why did I read this thread just as I was about to head to the leaba, I relax myslef by having a gander at a few rugby forums and twitter and then I see this, just to rise my blood pressure.

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        #4
        Do you think there'll be a catalyst for it Eamo? It really does look like there is pretty much perfectly elastic demand for money and velocity of money isn't going anywhere whilst we're at ZIRP. Then again (and the more I think about this stuff the more confused I get) I can't find any case of central bank monetary fiddling that hasn't produced unintended consequences.

        Would you class yourself as an Austrian? Some very interesting stuff out there by a guy called Sean Corrigan.
        Biffo ate my future.

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          #5
          I say burn the bond holders. Then draw and quarter them.
          Inflation MY ARSE.

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            #6
            Some meandering thoughts

            The Brits are still printing money like billy-o, and seeing no growth.

            I can't see a rise in interest rates anytime soon from BOE.

            Is part of the disparity that the money being printed is being used to balance reserves rather than actually making it into the system?
            "We will not walk in fear, one of another. We will not be driven into an age of unreason if we dig deep into our history and remember we are not descended from fearful men" Edward R Murrow

            "Little by little, we have been brought into the present condition in which we are able neither to tolerate the evils from which we suffer, nor the remedies we need to cure them." - Livy


            "I think that progress has been made by two flames that have always been burning in the human heart. The flame of anger against injustice and the flame of hope that you can build a better world" - Tony Benn

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              #7
              Originally posted by Balla Boy View Post
              The Brits are still printing money like billy-o, and seeing no growth.

              I can't see a rise in interest rates anytime soon from BOE.

              Is part of the disparity that the money being printed is being used to balance reserves rather than actually making it into the system?
              Great article in the FT yesterday about the secret world of the currency wars. Look at the rate of sterling to the euro. A year ago it was 77c = £1; now its 86c = £1. The BOE are doing everything in their power to make sterling compeditive, especially given that the Euro makes up over half their exports.

              I'd be less worried about spiralling inflation circa Weimar. What we're now stuck in is stagflation a la Japan, who've been a zombie economy for almost 30 years, and that's the way we're going till we hit a tipping point. I remember buying some old-school free jazz in Tokyo a few years ago. The original price in 1986 was 2,500yen, which was £10 then and £10 now. Truely bizarre.

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                #8
                A couple of points - yeah I'm about as Austrian as you can get , extreme Chicago school if you like , I was taught by a guy called Siegel so that's my point of view.

                For those that see no threat. I appreciate that there is no inflation at the moment in general goods or services. However printed money has to go somewhere. We are seeing the classic rally in stocks right now. Historically real assets follow about 18 months to 2 years after. Folks talk about leading indicators and repeatedly miss the historically most significant one, the stock market. I see folks on CNBC justify the recent rally based on better PE but it's not better REAL PE as the money supply has gone nuts.

                Paki the velocity has been artifically affected by the need to shore up balance sheets, personal,corporate and national. Once this is done velocity will explode. Productivity will ameliorate the problem somewhat (3d printing is the poster boy for this) but for what it's worth I kinda feel inflation's coming.
                I believe that all government is evil, and that trying to improve it is largely a waste of time.
                HL Mencken

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                  #9
                  The fed has to keep interest rates low. If rates start rising the US won't be able to afford more debt which it needs to finance the genormous defecits. The US Dollar is going to devalue sharply over the next ten years, with all other currencies forced to devalue with it. Inflation is coming.
                  Property, commodities, and dividend paying stocks are the obvious protection.

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                    #10
                    Re: Some meandering thoughts

                    The banks are drowning in cash due to repos. At some stage, they'll start to pump that into the real economy, and the never-ending, and enviable cycle of boom / bust will continue.

                    This time though, I'm going to stick my two fingers up at prudence, and load myself up with as much debt as I can and leverage the arse out of it.

                    If we've learned anything from these cycles its that the more you owe, the more protected you are.
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