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Old 11-04-2018, 07:48 PM
 
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Old 11-04-2018, 08:25 PM
 
1,501 posts, read 339,070 times
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Quote:
Originally Posted by C2BP View Post
Every Growth Season (Day Cycle - Inflation) is followed by a Rest Season (Night Cycle -Deflation). We need deflation as much as we need inflation/growth. Deflation is a bad thing with a positive side. Deflation is what the FED dreads and tries to delay or mitigate, sometimes with outrageous inflation (1965-1983) and sometimes with dangerous asset bubbles (2001-PRESENT).

Why do we need deflation?
1) lowers prices
2) destroys debt
3) revitalizes the conservative SAVING CULTURE of the society
4) revitalizes the local currency.

To do this, every Night-Cycle must be accompanied by higher interest rates. Now Powell's FED needs to UNWIND the absurd delusions of Bernanke et al. PERPETUAL ECONOMIC GROWTH as an idea is madness. Asset Bubbles are not economic growth. Asset bubbles are the cause of the world's homeless catastrophe. HOMELESSNESS today is not caused by the lack of a job - it is caused by the HOUSING BUBBLE which forces prices too high. Inflation and debt inflation is the great destroyer of empires and civilizations.

What is the negative side of GROWTH?
1)An inflated gap between the rich and poor, which needs to be closed and will be closed by deflation
2)The pollution of the environment by business activity
3)The diminishment of the spiritual perspective
4)The accumulation of way too much DEBT, which will destroy the society if allowed to grow unrestricted, by ZIRP and NIRP and QE, which will be mitigated if deflation is not suppressed by smart economic tricks designed to preserve personal wealth at the cost of the whole society.

We don't need to be protected against the Business Cycle. The Business Cycle is periodical. Everything in cycles. Growth flows into Contraction; Contraction flows back into Growth. We need to plan that years of Growth are always followed by years of dissolution, with the understanding that Growth will follow again. Growth is never disconnected from the END OF GROWTH, and the beginning of decay and deflation of that Growth.

We are in deep water. We should have done one thing; and we did the opposite. Our elite, the 1% does not want deflation - because deflation and austerity will destroy their profits and lower prices, which will mean losses for them. But austerity is another word for self-discipline. In a society devoted to self-indulgence, of course, this will be considered a threat.

FED (Powell) is UNWINDING its balance sheet. And, unless they change course, they are planning to UNWIND for many years ahead. The UNWIND is erasing Dollars from the market. Fewer dollars, higher dollar cost. This is removing liquidity from the system, which was the basis of the ASSET BUBBLE economy 2001-PRESENT.

Good Luck!
I just hate when longtime cardholders get their credit lines cut during a downswing in the economy, and their reaction is to CANCEL THE CARD? I guess that DOES slash debt, but perhaps not in the way anyone planned. This kills your AAoA and credit score goes down with it. Don't cut off your nose to spite your face.
 
Old 11-04-2018, 08:39 PM
 
749 posts, read 406,596 times
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Quote:
Originally Posted by lieqiang View Post
How are things in Asia Lieqiang? Asia is going back to sleep for a very looooooong time and Strong US Dollar is going to shred Asia and all Developing Markets.

Remember, deflation is a season of the economy (winter). It does not like being ignored or denied.
 
Old 11-04-2018, 09:16 PM
 
Location: Northern Maine
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OK, time for a reality check again:

In 1918 you could buy a cow with a $20 gold piece. You still can. The real value of the gold piece and the cow have not changed.

That said, a $20 bill will buy you about four pounds of good hamburg. Inflation is a tax and it is intentional.

The stock market lately has been a good example of pump and dump. It is supposed to be illegal, but it is so hard to define that the markets will never be prosecuted. Hey, Corzine is still walking around as a free man.

Have fun, folks.
 
Old 11-04-2018, 10:40 PM
 
Location: USA
580 posts, read 204,183 times
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Quote:
Originally Posted by mathjak107 View Post
You know , if you just keep repeating your opinions long enough they magically become the only outcome possible and view .
“Opinion bubble” - should burst soon enough.
 
Old 11-04-2018, 11:14 PM
 
749 posts, read 406,596 times
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Quote:
Originally Posted by Northern Maine Land Man View Post
OK, time for a reality check again:

In 1918 you could buy a cow with a $20 gold piece. You still can. The real value of the gold piece and the cow have not changed.

That said, a $20 bill will buy you about four pounds of good hamburg. Inflation is a tax and it is intentional.

The stock market lately has been a good example of pump and dump. It is supposed to be illegal, but it is so hard to define that the markets will never be prosecuted. Hey, Corzine is still walking around as a free man.

Have fun, folks.
We are told there is NO INFLATION. What about prices?


The amazing thing is how relatively stable prices were from 1774 to 1914. The Federal Reserve was created on December 23, 1913. If someone earned $1,000 in 1774 and buried it in their back yard, their great, great, greatgrandchildren could have dug it up 140 years later and purchased an equal number of goods as when it was buried. Money, over this long time period, did not lose any of its purchasing power. On the other hand, $1,000 buried in 1913 has since lost 95% of its purchasing power.

Connect the dots.
 
Old Yesterday, 12:17 AM
 
4,792 posts, read 2,283,571 times
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Quote:
Originally Posted by C2BP View Post
How are things in Asia Lieqiang? Asia is going back to sleep for a very looooooong time and Strong US Dollar is going to shred Asia and all Developing Markets.
Things are fine, thanks. Dollar has been strong in Asia for years now, it was actually stronger against THB in 2016 and 2017.


Quote:
Originally Posted by C2BP View Post
We are told there is NO INFLATION
I cannot imagine how scrambled one's brain must be to claim we were told there was no inflation then post a graph that sources it's data since 1913 from officially published inflation rates. You don't see how you're arguing against yourself there?


Quote:
Originally Posted by C2BP View Post
The amazing thing is how relatively stable prices were from 1774 to 1914. The Federal Reserve was created on December 23, 1913. If someone earned $1,000 in 1774 and buried it in their back yard, their great, great, greatgrandchildren could have dug it up 140 years later and purchased an equal number of goods as when it was buried. Money, over this long time period, did not lose any of its purchasing power. On the other hand, $1,000 buried in 1913 has since lost 95% of its purchasing power.
I question your conclusions.





A straightforward way to measure volatility, especially informative when averages differ substantially, is the coefficient of variation. This measure is defined as the ratio between the standard deviation and the mean of a given variable. A higher coefficient of variation implies a higher volatility of a variable around its mean. For the pre-Fed period (1790-1913), the average annual inflation was 0.4 percent with a coefficient of variation of 13.2. During the period 1941-2016, these figures changed to 3.5 percent and 0.8, respectively. If we look at the post-Volcker era (1988-2016), annual inflation was 2.2 percent on average with a coefficient of variation of 0.4.


In other words, if you buried something in the back yard in 1774 it might be worth a hell of a lot more in any given year, or a hell of a lot less in another given year because there was far more volatility with periods of high inflation and deflation. Today's environment of a relatively stable low rate of inflation is preferred.
 
Old Yesterday, 04:54 AM
 
2,259 posts, read 1,401,972 times
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Whoa whoa whoa. Coefficients of variation? Standard deviations?

Can we get this explained using natural seasons of winter, the moon, and the stars?
 
Old Yesterday, 05:33 PM
 
712 posts, read 253,075 times
Reputation: 1235
winter: As sure as the spring will follow the winter, prosperity and economic growth will follow recession.
moon: I still say, 'Shoot for the moon; you might get there.'
stars: Shoot for the moon - if you miss you'll end up in the stars.
 
Old Yesterday, 06:12 PM
 
Location: Silicon Valley
2,791 posts, read 1,226,623 times
Reputation: 5119
C2B2, there were huge swings in valuation around "stable" dollars. Albeit the dollar wasn't really stable at all. From a website, and I understand coffee is volatile anyway, but it's one of the few they had a price for each period.

In 1800, a pound of coffee cost .25
In 1825, a pound of coffee cost .17
In 1850, a pound of coffee cost .80
In 1875, a pound of coffee cost .25
In 1900, a pound of coffee cost..15
Fed Begins
In 1925, a pound of coffee cost .47
In 1950, a pound of coffee cost .79
In 1975, a pound of coffee cost 1.40
Economy of Confidence
In 2000, a pound of coffee cost 3.54

One can look at this and conclude that we're blowing a large bubble with the central bank. However, what's been avoided is the severe bank panics that rocked the 19th century. There are now more uses for land besides growing coffee. There are more opportunities for workers to sell their labor. Input prices will always go up in times of peace and prosperity.

One of the other difficulties in things like this are staples go away completely. Not every family owns a gun, horses and accessories and is content to live in a cramped, uninsulated home of rough hewn lumber, no insullation, running water or electricity.

There's an argument to say the numbers of old are more comparable because the goods are. My wife had a cell phone store back in the day. In the back she still has a display case and some phones are there. Now the case has more value than the phones. The coffee example is probably packaged better, and has a lot of genetics built into a better product.

I guess what I'm saying is it can be hard to determine what is monetary inflation vs option inflation. I know the numbers attempt to account for it, but what a challenge that would be.

Besides, asset values change all the time, but debt values tend to be a bit stickier. Assets fall, debt stays, innovation drops...stable prices ensue?
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