patrick.net

It is possible that we could be entering a very unusual period where there is acutally growth in the economy and deflation at the same time.

No, deflation is now and always will be bad...

Analyzer says

It is possible that we could be entering a very unusual period where there is acutally growth in the economy and deflation at the same time.

That is exactly what is going on. To top it all off its just the beginning.

'Fed now expected to stay lower for a lot longer'.........

He makes good sense. The central banks have created the illusion of growth and stretched the rubber band illusion of growth about as far as it can go before the malinvestment gets snapped back into place through deflation.

germany has been getting it right with their investment in people instead of shareholders. i wish this country would have done the same thing.

There are a ton of dynamics to this including the the whole global central banking industry, which I'm not a expert. We are and have been in a global "risk off" environment. The Swiss franc has been a screamer intermediate term as a safe money and I use that loosely for the EUR as the "risk off" effect. That economy can only absorb so much before critical mass comes in at it's full potential.

The other benefactor by a 100 fold is the USD the primary currency and market for safe money. The money flow to the east is temporarily suspended and the fire hose is directed right at the good ole USA. That amt. has been estimated at 17 trillion... Interesting # isn't it... This money will be liquid cash into the dollar bill then into our markets and I am assuming will stay in a majority of liquid assets.

Meaning its effect may stay minimally as far as real growth concerning jobs and all that go with it. Kind of like the banking bail outs. However, things will seem good to most.

Agreed for the moment, but the investment dollar will soon go to the emerging markets, in a Qtr or two. If the BRICS gather momentum that will be a game changer but that has been stalled I suspect because of the drop in the price of oil.

No soon about it...lol Respectfully
This is the very start of a trend and will take a # of years to hit critical mass. This is a sweet spot for those who can see it for what it really is.

Graybox says

This is the very start of a trend and will take a # of years to hit critical mass

Graybox says

There are a ton of dynamics to this including the the whole global central banking industry, which I'm not a expert

LOL, respectfully.

Neither am I, but have more than a superficial understanding of the subject.

I have learned to embrace being wrong... Otherwise I'd be the typical bag holder. The market is the 1st place to school you as to concept of high probability of odds and chance. You can have a truck load of odds pointing you in a direction and the market will come and slap you and your odds to the ground.

I love deflation!

zzyzzx says

I love deflation!

Me too...

Graybox says

have learned to embrace being wrong... Otherwise I'd be the typical bag holder. The market is the 1st place to school you as to concept of high probability of odds and chance. You can have a truck load of odds pointing you in a direction and the market will come and slap you and your odds to the ground

True dat. But it is also true that capital goes where is treated best. Which is not going to be in the US for long, for all the aforementioned reasons.

zzyzzx says

I love deflation!

You like being unemployed?

tatupu70 says

You like being unemployed?

No. But I don't see how that is relevant here.

indigenous says

True dat. But it is also true that capital goes where is treated best. Which is not going to be in the US for long, for all the aforementioned reasons.

Time will tell all. So how are you playing this game and making money based on your methodology?

zzyzzx says

No. But I don't see how that is relevant here.

Clearly, otherwise you wouldn't pretend like you would enjoy deflation.

There is a very strong correlation between deflation and high unemployment.

indigenous says

for the moment

Could you quantify what your moment of time represents.
My moment is what price will give me or spanks me.

Graybox says

Time will tell all. So how are you playing this game and making money based on your methodology?

Cash benefits from the strong dollar and the 10yr treasury, both are safe.

Stocks = no

Bonds are a bigger bubble than stocks.

I know nothing about options trading, and not sure want to based off the long list of apparent options burnouts I see.

I think mining stocks will have a return as inflation gets going.

I think emerging markets next year might be good maybe in India. India might go from terrible to not too bad as they have a new leader.

When the stock market does adjust and maybe QE really does stay gone stocks in SMEs might have a few good choices.

Graybox says

Could you quantify what your moment of time represents.

My moment is what price will give me or spanks me.

next qtr or so.

If all the money comes to the US how is it going to produce yield on an economy that desperately needs to shed malinvestment. IOW it is not fertile ground for investment to get return as it is so thoroughly saturated with over-investment.

Stay with whats making money and working for you.

I don't care for options at all and it's a fact most don't posses enough knowledge and skill in market theory or the mechanics to make a dime. It's sold as a risk management tool (lol) but nothing beats skill set, self control and discipline. Ask all the broke options players..

This will not be as much about investment as it will risk management. Will have to come visit this April 1st and see if your view is holding water.

The amt of capitol investment coming our way will take more than a qtr to work its way threw the system. Will be seeing new record highs in equities next year and broken highs in the USD.

RE in the median range and below will stay range bound as will unemployment.

indigenous says

how is it going to produce yield on an economy that desperately needs to shed malinvestment

That question you will have to ask the banksters.

Graybox says

That question you will have to ask the banksters.

Depends on whether we have seen peak QE? If so then the whole deal will begin to deflate.Graybox says

The amt of capitol investment coming our way will take more than a qtr to work its way threw the system. Will be seeing new record highs in equities next year and broken highs in the USD.

I'm talking about the leading edge the "do the opposite as the crowds part"

This economy is not in good shape...

indigenous says

'm talking about the leading edge the "do the opposite as the crowds part"

LOL the crowd. What did "they" have to say...lol

I believe in rowing my own canoe across the pond.

Call it Crazy says

Please explain in detail how that is now.

I'm not even sure what the means--is that English?

Call it Crazy says

Please explain in detail how that is now.

here are 2 such examples:

zzyzzx says

I love deflation!

The Fed does not share your sentiment and will do what they can to prevent it.

Analyzer says

The Fed does not share your sentiment and will do what they can to prevent it.

i believe it was once said that it would send "helicopters of money"

Isn't deflation just the hangover from malinvestment that was induced by improper inflationary policies such as QE, bailouts, etc? So I don't think it's deflation that's inherently bad, it's just the medicine we all have to take for taking too much risk.

By the way, deflation is great for those that continue to have jobs.

debyne says

Isn't deflation just the hangover from malinvestment that was induced by improper inflationary policies such as QE, bailouts, etc? So I don't think it's deflation that's inherently bad, it's just the medicine we all have to take for taking too much risk.

By the way, deflation is great for those that continue to have jobs.

Sactly

landtof says

here are 2 such examples:

Correlation is not causation. Tatpoop spews what the Fed told him to say, and feels smart whenever he echoes the Fed verbatim. In reality, unemployment causes deflation, not the other way around.

curious2 says

Correlation is not causation. Tatpoop spews what the Fed told him to say, and feels smart whenever he echoes the Fed verbatim. In reality, unemployment causes deflation, not the other way around

Wow--tatpoop? Are you 5?

And you are 100% incorrect, of course. Which came first in 1929--unemployment or deflation?

Regardless it's why I was VERY clear in my post:

tatupu70 says

There is a very strong correlation between deflation and high unemployment.

Do you see the word causation in there? It's typical for you to fight, fight, fight the opposite of anything I post, but it's really best to read it first.

In any event, deflation and unemployment are caused by the same thing, so if you have deflation, unemployment comes along for the ride. (unless you think we're suddenly going to enjoy huge productivity gains across the entire economy. Good luck with that.)

Call it Crazy says

Huh??

My thoughts exactly

debyne says

Isn't deflation just the hangover from malinvestment that was induced by improper inflationary policies such as QE, bailouts, etc? So I don't think it's deflation that's inherently bad, it's just the medicine we all have to take for taking too much risk.

By the way, deflation is great for those that continue to have jobs.

Nope, I know that's what the Austrians would have you believe, but it's not how the economy works in the real world. The economy is not black and white with improper and proper policies that can be easily specified. Deflation is not "medicine" in any sense of the word. Look at the 1930s--would you suggest we just let deflation take over and do nothing then? Allow the "medicine" to work?? How did that work out?

Only when driving over sand...

mell says

As It Turns Out Deflation Is Good After All

Of course deflation is good for anyone but a Congressman that has his retirement tied up in a floundering stock.

As far as being poor during deflation it's the best time to be broke and poor. Your welfare dollars actually go far. And when you panhandle a dollar, it can actually buy something.

tatupu70 says

here is a very strong correlation between deflation and high unemployment.

YEAH! Just like the high unemployment we had while the government was pretending there wasn't any inflation. But there wasn't one single damn item that hasn't inflated by more than 50% over the last 7 years?

You know what!? Give me that good ole fashioned deflation and laid off any day over what we had 2007 to beyond now.
Fuck if we would have had deflation I would still have 75% of my nest egg, that Obamacare bills ripped right though in weeks if not months.

tatupu70 says

Deflation is not "medicine" in any sense of the word. Look at the 1930s--would you suggest we just let deflation take over and do nothing then? Allow the "medicine" to work?? How did that work out?

I would suggest that we not overly inflate in the first place so that massive deflation doesn't become the inevitable end result. Are you suggesting we proverbially "kick the can" by continuing to inflate, inflate and inflate so as to temporarily avoid the deflationary medicine that's necessary to bring balance to the force? It's going to eventually happen anyway and only get worse when it does happen.

If we maintained discipline in our monetary and fiscal policies, I doubt we would have these wild swings as much...but I suppose that's how the elites make their money given they're the few that are "in the know".

Deflation is great - why do you think the Germans are strongly opposing QE? Why do you think the Swiss want a vote on repatriating their gold and the bankstas are opposing it and running propaganda against it? But what about he droves of freshly unemployed because of the Oil price crasht!! Oh wait, there haven't been any.. People are Fed up with the Fed induced stagflation and have become rightfully distrustful of their fiat backed by nothing. It's not gonna stop here, people will continue to demand repatriation of their governments gold and a return to sound money policies. In the meantime, enjoy the lower prices at the pump!