Gyroscopic Investing

A little golden nugget of inflationary irony about Shadow Stats — the service has been predicting hyperinflation since 2005 and often shows statistical evidence that high inflation is all around us:

On a slightly different note, I always find it interesting how those pushing the hyperinflation theme love to collect U.S. Dollars. For instance, if you visit Shadow Stats you can buy a subscription to their services for a fee – in U.S. Dollars. Now, a hyperinflationist would argue that they are using those dollars to buy hard commodities so that’s a valid point, but the problem is that there are no signs of hyperinflation in the Shadow Stats subscription service. In fact, in real terms, the subscriptions are deflating! If one goes back and reviews the cost of the service it has remained remarkably stable in price:

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[align=center](Figure 1 from July 16th, 2006)[/align]


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[align=center](Figure 2 from May 12th, 2008)[/align]


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[align=center](Figure 3, from August 28, 2011)[/align]


According to the US government inflation should have caused those subscriptions to surge to $197 in 2011. But your Shadow Stats subscription has actually gone down in price since 2006 because inflation has risen a total of 13%+ according to the CPI. Of course I am cherry picking here and I am not showing the data in terms of gold or what could be viewed as a general decline in our standard of living. In fact, I think one could make a good case for the idea that our standard of living has declined since 2006 (not the case since 1913 when the Fed was founded or since 1971 when we went off the gold standard, but that’s a different matter). But you can see the irony regardless.

Source: Why Is There Deflation in Hyperinflation Forecasts?

Even though it's completely unscientific, it still made me chuckle.  :)

Hilarious.  Gumby, this has me wondering what other hyperinflationists have deflated the prices of their newsletter subscriptions.  Gary North and Howard Ruff, for example.

smurff wrote: Hilarious.  Gumby, this has me wondering what other hyperinflationists have deflated the prices of their newsletter subscriptions.  Gary North and Howard Ruff, for example.

According to archive.org...

Gary North was charging $9.95/month in 2005. Now, he charges $14.95/month — which is slightly faster than the rate inflation.

And Howard Ruff was charging $99/year in 2005, but now he charges "a paltry $215." He justifies the price by saying, "I've been right about the economy for 34 years, and I'm now 34-years smarter than I was the first time."

Both gladly accept US currency.

Some funny old predictions you can find on some sites using archive.org. Gary North was a Y2K alarmist back in 1999.

It's a shame crap like this even exists, because there's probably some good "inflationist" reading out there... but it's so muddled by the crap.

There really is not "deflationist racket" out there, or at least not one as obviously self-serving as this crap... these goons are just trying to get somewhat wealthy conservatives to join their cause.  When I see long-term treasuries, cash and deflation being peddled like gold (which I think will continue to rise, regardless of my inflation thoughts) and the collapse of our currency, I'll start to wonder about the deflation argument

While I'm firmly in the anti-hyperinflationist camp, I think we should all keep an eye out for intelligent, well balanced narratives on how the dollar is screwed... ones that involve the following:

- SOME understanding of a sovereign fiat currency
- No blanket comparison to Greece
- Some mention of Japan
- No mention of some product that can be purchased from them with "to-be-worthless" green paper
- A timeframe of when this will happen

We all know the stuff Gumby pointed out is out there.  There's got to be some better balanced arguments for it worth reading.

It's sort of like trying to have a conversation about a sport with someone who is a huge fan of a particular team.  The conversation has a way of coming back to how their team is the best.

Gary North has been predicting hyperinflation since the 1970s at least.

I suppose a deflationist newsletter might not be a great business model. A deflationist would have a hard time justifying a price bump in their subscription rate. I think you can make more money as a hyperinflationist — if you remember to raise your prices.

Gumby... I think that plays into broker fees as well... deflation is a lot harder to justify 1% fees during than inflation is.

And if it's not here now, it's "just around the corner."

moda0306 wrote: Gumby... I think that plays into broker fees as well... deflation is a lot harder to justify 1% fees during than inflation is.

And if it's not here now, it's "just around the corner."

That's an interesting point. Though, I sort of feel like deflation happens when no customers are showing up (lack of demand) and businesses are forced to lower their prices — something no one really wants to do.

Gumby wrote:

moda0306 wrote: Gumby... I think that plays into broker fees as well... deflation is a lot harder to justify 1% fees during than inflation is.

And if it's not here now, it's "just around the corner."

That's an interesting point. Though, I sort of feel like deflation happens when no customers are showing up (lack of demand) and businesses are forced to lower their prices — something no one really wants to do.

Perhaps what the market needs is a Howard Ruff-style hand wringer but on the deflation side.  He would be called a "hyper-deflationist", and would talk endlessly in his radio commercials about prices spiraling downward and there being a Zimbabwe-type effort to print smaller and smaller denominations of U.S. dollars, to the point that there would be 1/1,000,000 of a dollar note used to buy things and even then it would be impossible to get change for many purchases.

As one of the many social disruptions that would be triggered by hyperdeflation, the previously unknown crime of "loafer jacking" would begin popping up everywhere involving roving gangs attacking wearers of penny loafers.