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Inflation, Deflation, Economics, Investing, Gold
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I cannot tell you how much I enjoy your analysis. I have worked for the Fed in DC and hold a high level finance position in the private sector now. You have finally moved me over to the deflationary, Japanese scenario with your last post even though I know you've been on this for quite a bit. Would you be able to create a post about how you either 1) profit from this or 2) protect your assets as be head toward that scenario? Thanks again, Eric Eric, Thanks for the kind words and the questions. I will do my best to address your questions below. Before answering, the article to which Eric refers is called Not Your ...
Inflation, Deflation, Economics, Investing, Gold - Trends
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Mish's Global Economic Trend Analysis
Ben is forecasting uncertainty and saying the Fed's prepared for action as needed. Did Uncle Ben strain his cerebrum coming up with that one (forecasting uncertainty)? I suppose there's a difference between "unusually uncertain" and "typically uncertain." Either way it comes out this way - Ben doesn't know squat! Is "Uncertain" an Improvement? Bernanke was pretty certain there would not be a recession, that housing was not in a bubble, that the unemployment rate would peak at 8.5%, that paying interest on reserves would enable the Fed to hold short-term rates above 2%. Bernanke was ...
Wikipedia
resulting in an increase in the real value of money – allowing one to buy more goods with the same amount of money. This should not be confused with disinflation , a slow-down in the inflation rate (i.e. when inflation declines to lower levels). As inflation reduces the real value of money over time, conversely, deflation increases the real value of money – the functional currency (and monetary unit of account) in a national or regional economy. Currently, mainstream economists generally believe that deflation is a problem in a modern economy because of the danger of a deflationary spiral ( explained below ). Deflation is ...
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“I do not under any circumstance favor raising the price of gold. It would perpetuate that “barbarous metal” in international monetary use. We have quite rightly broken the link between gold and our domestic money. We should also break the link between gold and international money. The supply of money, neither domestic nor international, should not be dependent over the long run on the accidents of supply and demand in the marketplace for just one commodity.” July 12, 1968 – Darryl R. Francis, President of the Reserve Bank of St. Louis. 1. And so it came to ... Read More
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We can photograph it. A photo of a one billion dollar bill next to a pile of apples from Zimbabwe’s recent bout of runaway inflation stuns the imagination. It’s the stuff of national nightmares. The German electorate and German bankers are still traumatized by Weimar-era inflation. And we know what to do about it: Raise interest rates, rein in the money supply, or, if worst comes to worst, send the economy into a recession. Deflation isn’t sexy. It’s hard to photograph money getting more valuable and falling prices just aren’t terribly dramatic. Japan has been sunk in deflation for years if not decades without violence in the ...
market research, surveys and trends
This is the next in a series of articles as part of my unfolding inflationary mega-trend scenario that is an important stepping stone towards the formulation of a inflation forecast for 2010 and beyond. I am to complete the whole scenario and implications of before the end of December which will be published as an ebook that I will make available for FREE. Ensure you are subscribed to my always free newsletter to get the latest analysis in your email box and check my most recent analysis on the probable inflation mega-trend at http://www.walayatstreet.com What is Deflation ? http://en.wikipedia.org/wiki/Deflation
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There’s no hotter debate right now than stimulus vs. austerity, as folks like Paul Krugman and even Barack Obama call for more spending to fix the economy. Michael “MISH” Shedlock is not having any of it, arguing that the financial pump has failed, and that the only way to get the economy back on track is to pursue a policy of less government, and less spending, with a special focus on reforming pensions, public sector unions, and other institutions that drain the government of its resources. As evidence: Japan. The country has now seen multiple decades of recession despite massive pumping on both the fiscal ...
industry trends, business articles and survey research
The inflation vs. deflation debate has livened up again following the jump in December’s UK consumer price inflation (CPI) to 2.9 percent. Last year you couldn’t move for economists harping on about the output gap and blithely dismissing arguments about imported inflation, rising commodity prices, and oh yes, the little matter of the money supply. Simon Ward, chief economist at Henderson Global Investors, takes the threat of inflation more seriously. He points out that the big swings in inflation in recent years have been driven by food and energy prices, and the latter are beginning to rebound sharply.
industry trends, business articles and survey research
RELATED NEWS
When the price of cars or sweaters or iPods declines, it's a break for consumers and a welcome sign that economic productivity is improving. That helps drive up living standards. But when the price of everything drops, it's an alarming development that portends stagnation. The consumer price index, which measures inflation, declines every now and then, usually when there's a big drop in the price of volatile goods like energy or food. But there hasn't been sustained deflation in America since the early 1930s. Now, we may be on the verge of yet another unnerving economic adventure. Inflation over the ...
market trends, news research and surveys resources
In 2004, Analyst John Lee founded Mau Capital Management, a hedge fund based in Vancouver that invests mostly in junior mining companies. In this exclusive interview with The Gold Report, Lee deflates the deflation argument, discusses why he favors near-term gold and silver producers over early stage explorers and reveals some of his fund’s top holdings. The Gold Report: Everyone is concerned with the volatility in the markets. What’s going on out there? John Lee: Well, there’s the proverbial "sell in May and walk away" going on, even though commodity prices have stayed fairly buoyant. In the junior ...
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INFORMATION RESOURCES
Michael Saunders, Managing Director, Head of European Economics,. Citigroup ... The sum of these forces of deflation and inflation, and growth and recession, is that the .... and inflation. • Gold as the ultimate way to store value ...
technology research, surveys study and trend statistics
Although the gold standard could hardly be portrayed as having produced a
period of price tranquility, it was the case that the price level in 1929
was not much different, on net, from what it had been in 1800. But, in
the two decades following the abandonment of the gold standard in 1933,
the consumer price index in the United States nearly doubled. And, in
the four decades after that, prices quintupled. Monetary policy, unleashed
from the constraint of domestic gold convertibility, had allowed a persistent
overissuance of money. As recently as a decade ago, ...
technology research, surveys study and trend statistics
It is straightforward to narrate the slide of the world
into the Great Depression. The 1920's saw a stock market boom in the U.S.
as the result of general optimism: businessmen and economists believed
that the newly-born Federal Reserve would stabilize the economy, and that
the pace of technological progress guaranteed rapidly rising living standards
and expanding markets. The U.S. Federal Reserve's attempts in 1928 and
1929 to raise interest rates to discourage stock speculation brought on
an initial recession. Caught by surprise, firms cut back their own plans
for further purchase of producer durable ...
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QUESTIONS AND ANSWERS
How to invest to make money if a depression comes? Assume a repeat of the Great Depression's on the way (i.e. not a Mad Max depression): can you invest in way to make money when it happens? (Like some kind of short selling, some kind of option trading like the author of Black Swan does/did (and what's minimum investment on this or mutual fund type vehicle that follows this)? puts are options that bet on a stock falling. the more said stock decreases, the more the put increases. there is significant risk involved - expiration and total loss of investment are to be taken into account. do your homework before you get ...
when they have no margin left to reduce, companies have no choice but reduce their costs - but increasing unemployment rates - the unemployed can't afford buying - no matter companies sell inexpensive cars, nobody left can afford them - sooner or later, companies cannot sell anything, since they don't have any customer left - which increases unemployment rates - vicious circle - the unemployed and the closed companies don't pay taxes anymore - tax incomes decrease - the State cannot support their civil servants nor invest and sustain infrastructures for the future - the State, the companies and the personnal all ...
