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Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 2:30 pm
by doodle
Deleted
Re: Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 2:39 pm
by Tortoise
doodle wrote:
Nevertheless, my inflationary bias tells me that it is hard to believe that as all ordinary rules are out the window, who is going to rewrite them in a way to create deflation which ultimately benefits no one.
Come again? Deflation increases a currency's value, thereby benefiting people living on a fixed income. Retirees, for example.
Thanks for sharing the article.
Re: Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 3:18 pm
by AdamA
doodle wrote:
who is going to rewrite them in a way to create deflation which ultimately benefits no one.
No one needs to rewrite the rules to create deflation. When credit becomes scarce in a debt based economy, it (deflation) is highly likely.
Re: Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 4:43 pm
by doodle
Deleted
Re: Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 6:03 pm
by smurff
In addition to the all the rule-breaking involved in the TARP mess (including the favoring of big banks over small banks in the fiasco), Martenson summarizes three additional major instances of rule-breaking that have recently been allowed:
1. Cancellation of "flash crash" trades in May 2010 based on some arbitrary cut-off. Also, no real investigation and hence, no real understanding of why the flash crash occurred or who caused it--meaning it is likely to happen again.
2. The Commodities and Futures Trading Commission allows JP Morgan Chase and HSBC to exceed position limits on silver shorts by an amount so massive that ... well, we'd go to jail for just thinking about doing this under some regimes.
3. High-Frequency trading is allowed that permits certain participants to engage in front-running at the millisecond level, primarily by submitting quotes without the intention of actual buying and selling.
Then there's the other form of rule-breaking he does not mention--changing calculation methodologies for indices that are used for a variety of things. Like changing how the CPI is calculated, which we've covered a lot on this board.
Re: Interesting article for inflation vs. Deflation debate
Posted: Sat May 21, 2011 11:16 pm
by pershing83
doodle.... "with hardly a squeak from the mainstream press ..."
The MSM takes its marching orders from the White House. Watch TV tomorrow morning if any doubt.
Inflation vs. Deflation
Posted: Fri Feb 24, 2012 5:31 pm
by Alanw
I know there is an old thread regarding this topic, but I wanted to either re-open it or start a new thread.
I have been thinking a lot about this debate lately as the Dow has climbed to 13,000 +/- and how this may apply to the PP. Of course this is good for the stock portion of the portfolio but what about the bond portion?
After doing considerable research on the PP in early 2011, I decided it was in my and my portfolios best interest to institute the PP. In doing so I had to sell a number of stock and stock ETF holdings. I also decided it was best to try and time the market and sell at what I thought was a top (but really, what do I know about tops and bottoms). In the second quarter of 2011, I liquidated my postions and put 80% of my portfolio into the PP. This was done when the DOW was approximately 12,700 (did I ever get lucky or what).
At that time, LTT's were yielding about 4.25% and I was reluctant to buy at that low yield but did anyway. Another lucky move. Now that the DOW is hovering around 13,000, LTT's are yielding 3.11%.
Do the bond traders know something the stock traders don't? It appears to me that deflation fears outweigh inflation fears. If that is the case, why are the stock index's trading at such high levels?
Any comments?
Re: Inflation vs. Deflation
Posted: Fri Feb 24, 2012 8:38 pm
by MediumTex
Alanw wrote:
I know there is an old thread regarding this topic, but I wanted to either re-open it or start a new thread.
I have been thinking a lot about this debate lately as the Dow has climbed to 13,000 +/- and how this may apply to the PP. Of course this is good for the stock portion of the portfolio but what about the bond portion?
After doing considerable research on the PP in early 2011, I decided it was in my and my portfolios best interest to institute the PP. In doing so I had to sell a number of stock and stock ETF holdings. I also decided it was best to try and time the market and sell at what I thought was a top (but really, what do I know about tops and bottoms). In the second quarter of 2011, I liquidated my postions and put 80% of my portfolio into the PP. This was done when the DOW was approximately 12,700 (did I ever get lucky or what).
At that time, LTT's were yielding about 4.25% and I was reluctant to buy at that low yield but did anyway. Another lucky move. Now that the DOW is hovering around 13,000, LTT's are yielding 3.11%.
Do the bond traders know something the stock traders don't? It appears to me that deflation fears outweigh inflation fears. If that is the case, why are the stock index's trading at such high levels?
Any comments?
Congratulations on your PP experience thus far.
At any given time each of the PP assets may reflect rational and efficient pricing or it may reflect absurd bubble pricing. The problem is you don't find out which it is until long after.
As far as the stock market goes, many U.S. companies are making large profits in countries that are not experiencing deflation, so that could explain some of it.
The nice thing is that the PP gives you the luxury of not having to worry about this sort of thing.