The Deflationary Risk of 2018

[macdon02]

Tucker are you saying your capital can cross borders and just leave when your feeling the tax burden is more then the risk? Explains why the Dow keeps going up..... capital flow. Least risk in the world. Everything is uglier then US.

[Stampsguy]

Errol, I think you will see the metals do very well in a deflationary environment. They are only being held down now by the unrelenting suppression and manipulation of the futures market by the US Fed and their bullion banks. It's a matter of public record that they are doing it. Along with the Plunge Protection Team that Reagon introduced to prop up the stock market the whole market place is a scam and fraud. It's not about real price discovery anymore.

[macdon02]

You can deny it until there is a margin call. Place your bets. Nothing proves you more wrong then the phone call to pony up. You can be right but still wrong if you don't have the timing. Physical isn't the same as leveraged paper. "The market always goes to the level that screws the most traders" Charlie Sernatinger. Gold needs a monthly close over 1362 before it's game on. Then the trend changes. It's simply coiling for now and I highly expect a head fake before it finds its true direction

[errolanderson]

Janet Yellen's Jackson Hole speech could set the tone for the stock market. The Fed is attempting to unwind their $4.5 trillion balance sheet gradually starting in September. This could shake several markets including equities, real estate and commodities (IMO). Meanwhile, they are banging the drum of another rate hike. This combo plus the equity bubble is a 'red alert' in my view.

The reason this is brought up, the Fed balance sheet was $1 trillion ahead of the 2008 crisis. If the U.S. heads into recession, what now? QE4? Rather than unwind the balance sheet, they would be expanding it again. The financial stakes are incredibly high . . . .

This is truly a mess driven by central bankers and we will all feel the pain of the fallout (IMO).

[MBgrower]

No deflation on the farm machinery side. As always manufactures are still increasing prices, even the Canadian built products.

[danny W1M]

People enjoying life and consumer goods,,,,,while they can.

[URL="https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html"]https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html[/URL]

Says,"Seventy-eight percent of full-time workers said they live paycheck to paycheck."

As a saver, a lot of days I feel jealous, other days I feel like in the end,,,, they'll end up taking most everything from me, just to get to these spenders.

I sense future gov'ts will be ruthless to savers.

[farmaholic]

People enjoying life and consumer goods,,,,,while they can.

[URL="https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html"]https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html[/URL]

Says,"Seventy-eight percent of full-time workers said they live paycheck to paycheck."

As a saver, a lot of days I feel jealous, other days I feel like in the end,,,, they'll end up taking most everything from me, just to get to these spenders.

I sense future gov'ts will be ruthless to savers.

The Reps and Cons probably not as hard as the Dems/Libs and NDP.

[biglentil]

Deflation deflation deflation pure propaganda. Since '71 the dollar has lost 95% of its purchasing power. The more they print the more we lose. Did we see deflation after 08 nope. All a ploy to try and convince us that the wet inked paper is going to gain value. Give me a break im surprised it hasnt lost all its value yet.

[errolanderson]

Yellen's wide-anticipated speech this morning was more or less just fluff. She really didn't say anything in her Jackson Hole speech. Likely playing it safe so as to not upset the stock market apple cart.

But USD getting hammered with no mention of further 2017 Fed rate hikes. Loonie surging above 80 cents as a result.

[errolanderson]

Here's a youtube clip explaining the huge differences between two key economic theories in the world fostered by Keynes (the money printer) and Hayev (the hangover response).

It pretty much explains the mess global economies are in right now (a 7 minute rap).


www.youtube.com/watch?v=d0nERTFo-Sk

[sumdumguy]

It doesn't matter, everything is relative. In 1971, I earned 1.75/hr wage, pumping gas, washing cars, fixing tires. A fancy new brick house in Sedley cost $16,000 in 1964. Everything is ten times more expensive today, except for GRAIN, but now farms are ten times bigger (so we can grow more for lless).

[Rareearth]

Can't stand rap




First, they sold their car.

Then, they downsized from a house to a small apartment.

Next, they cut meat from their diets. And now, they skip meals to ensure survival.

This is the story of Vanessa Posada and her husband Adolfo.

They live in Venezuela. And their money simply doesn’t go that far anymore.

Falling oil prices have sent the economy into free fall. Per experts, the inflation rate is 720% and rising.

And today, an estimated 93% of Venezuelans don’t have enough money to buy food.

It’s a sad story… especially considering that Vanessa did everything right.

She completed her university studies. Then she got a job as a schoolteacher. And she later got married and had a child.

But that’s not enough to save her from government money gone bad.

Consider that at the beginning of 2014, one Venezuelan bolivar equaled roughly 16 cents. Today, that bolivar will supposedly get you just 10 cents – a 38% decrease.

But that’s the official rate… the one no one pays attention to.

Today, one bolivar will actually get you just 0.000625 cents.

Put another way, at the beginning of 2014, you needed 6.25 bolivars to get $1. Today, using the black-market rate, you need 16,000 bolivars to get that same $1.

That means Vanessa’s bolivars are worth 99% less than just three years
—
This story shows how governments can inflate a currency away. And it can leave those using that currency in a dire situation.

There’s a way Vanessa could have protected herself from government-driven inflation.

I’ll show you that in a moment. But first, don’t think it can’t happen to you.

Government Money: It’s Not Really Your Money
Venezuela is an extreme case. Folks tend to dismiss it. They think it can’t happen in their country.

But there’s no shortage of extraordinary situations going on in developed economies, too.

Take Switzerland, for example.

So far in 2017, Swiss banks have paid $1 billion just for the privilege of holding their deposits with the country’s central bank.

It’s called negative interest rate policy (NIRP). It’s an unorthodox policy designed to stoke inflation.

Swiss banks are so worried about getting their cash back, they’re willing to take less of it in the future.

If you think that’s backward, you’re right.

Ten years ago, no one even thought this was possible.

What ever happened to earning interest?

And just last month, the European Union let slip that it would freeze bank accounts if there’s a bank run
—
A person familiar with the German government’s thinking recently told Reuters, “The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge.”

The European Union wants to help failing lenders. It wants to keep banks solvent.

The only problem: It wants to use your money to do it.

The worst part is that it would be an ex parte procedure. That means without YOUR knowledge.

Per the European Commission, this would have a “surprise effect” and reduce the chance of you moving your money elsewhere.

Should this happen, we’d once again see the value of currencies inflated away.

So if you can’t trust government money, what can you trust?

[sumdumguy]

And how could Vanessa have protected herself!

[Rareearth]

Crypto currencies, bit coin etc

I'm having trouble with that. Somehow I feel that those internet cords can be cut by govt as well.

[biglentil]

Tangibles including food, lead, brass, gunpowder, Rottweiler.