cotton,,,errol,,,others

[boarderbloke]

have either of you read through the 75 page document titled,

Inflationary Deflation: creating a new bubble in money.
published by Seymour Price Ltd.

if you haven't seen it, it's linked at Agtalk. It's a comprehensive read.

If you've read it, I'd appreciate a comment or short analysis.

[cottonpicken]

Read it yesterday at zero hedge,nothing really new to
me.

Did like the end game discussion ,its all i really look
at now.

Read kondratieff years and years ago and never
thought it was needed to help forecast real time
events.

Goldcorp was the very first stock i ever owned...9
years ago.

[boarderbloke]

cottonpicken,so are you agreeable with the "cycles" concept, that it's cycle driven, or is it just where were at, at this moment in time because of mismanagement, and the cycles are a coincidence, irrelevate and unimportant?

[cottonpicken]

Yes and no,history doesn't repeat but it sure does
rhyme.

Maybe it was our destiny to end up here,i don't
know,seems like an offal lot of variables have to line
up just right to make far off long term
predictions,definitely worth thinking about.

[boarderbloke]

I haven't read through the whole thing yet, but when they start comparing cycles over a thousand year period, it seems like a bit of a stretch. Economies are so different than 300 yrs ago, but I know people that believe hard and true that everything operates on cycles, and that cycles don't fail.

The dollar destruction is definitely what they're playing out. IMO, they've been trying to spur inflation since 2008. But what I can't figure out is whether there are actually two competing positions, inflation vs. deflation(like in a market place),,,or whether everyone is on the inflation band wagon, it's just that they(Ben & Obama) can't get the fuse lit. If they ever do, it will likely come hard and fast.

[errolanderson]

boarder . . . didn't read this . . . but
as everyone knows, I'm not in the inflate
your way out of a problem camp. Deflation
remains a big risk in my mind from 2013 to
2015.

[ajl]

Errol, I would like you to explain how
deflation could be the reality when the
government prints money like they have
and are determined to do in the future.
One theory that I have heard is that
once consumer price inflation takes hold
then people will have to sell assets to
buy basic necessities. If there are
other ways please explain. I fear that
all the money printing will result in
Zimbabwe style inflationary depression.

[ColevilleH2S]

Just some random typing-out-loud;

Can there be any price inflation if consumer spending in the big economies is flat. The fed might be "printing" like mad but is any of it tricking down to consumers? The big dark pit called the banking sector is eating up every red cent in an attempt to recapitalize.

And what about the $ and € going to China and staying there?

Demand increasing money supply, drives inflation. If there is no demand, half of the equation is not satisfied. Therefore no inflation.

In fact I think if the E.U. and the U.S. raise taxation levels to fix their budget problems, won't that further stifle consumer spending, and thus lower the risk of inflation?

The more I ponder this, the more I agree with Errol. Deflation is a risk.

[ColevilleH2S]

I forgot this site won't let you use the plus symbol. The 4th thought should read,

"Demand *PLUS* an increasing money supply, drives inflation. If there is no demand, half of the equation is not satisfied. Therefore no inflation."
------------------
But anyways, has anyone else seen the 31¢/bushel wheat cheques from 1932 or '33? It was only a few years prior to that, our grandfathers were receiving several dollars a bushel for wheat. Now that's what I call deflation!

[rhoff]

I think it would be a mistake to compare the next
couple of years to the deflation of the '30s. In the
30's the fed refused to increase the money supply
while fear was fueling a run on banks. Now we
have a chairman who will print 24-7 to avoid
that.the only reason we don't have inflation is
because the consumer is still deleveraging and all
the banks are simply returning the newly printed
mint on deposit back at the reserve. But now that
housing is starting to turn and the consumer is
gaining a little confidence give it a couple of years
and confidence will start to translate into that
liquidity entering the economy. Then you will see
inflation not deflation. I'm not sure why anyone
would expect governments to deleverage the
honest way(austerity plus economic growth over
time). It will be defaults and money printing
because politicians can't fix it and don't want to if
they could.

[ajl]

We do have inflation in some part of the
economy currently along with deflation in
some others. The price of farmland is an
obvious example. There is also lots of
inflation in anything tied to government.
For example a report out put the cost of
the average Federal bureaucrat at $114000
per year. Costs in health care and
education in this country are spiraling
upwards.

[ColevilleH2S]

<a href="http://web.mit.edu/krugman/www/deflator.html">Liquidty trap</a>

It is one page of light <font size="1">(hehe)</font> reading, with equations and graphs. Basically discussing deflation, and how it could be fuelled in today's environment.

[rhoff]

Coleville that was an Intresting article and a
worthy read. I guess one of my opinions is that
the US will be completely unlike Japan for two
reasons. 1 is they have a propensity to spend
rather than save. 2. The US actually has a strong
rate of family formation and immigration which is
why demand growth will be constant.
If you consider Japan's birth rate and immigration
policy it has pretty much turned that economy into
a vacuum. I guess another factor is that Japan's
national debt is financed mostly by its own people
unlike the US who are the worlds biggest debtor
in history. I'm always amazed at how willing old
Japanese people are to save at incredibly low
yields lending money to governments who are
profligate spenders.

[cottonpicken]

If the japs interest rates move up a couple
points,100% of tax revenue will go to interest
expense alone.

It is a full on utter wipe out,they are insolvent and can
not fund themselves.

Mentioning the 30's compared today is more than
bizarre.

The dollar was tied to gold and the debt levels and
entitlements are a non comparison.

I won't even go into social attitude.

If you get to the understanding that the debt can not
be paid off you may realize goods and services may
continue to inflate.

[cottonpicken]

I've been try ing to buy credit default swaps on japan
but have not found a way in,they are reserved for
institutional investors,i thought an etf would
eventually pop up,but no such luck of course the
chance of them paying out at the top is about 0,those
institutions that sold them would/will be instantly
bankrupt so rules would be changed.

I imagine this is one of the monstrous problems
facing the system,there really is no insurance on all
the debt,that write down alone renders all western
banks and some hedge and pension funds insolvent
as well.