This page has been archived and commenting is disabled.

The Great Reflation Experiment

Tyler Durden's picture





 

Must read from The Boeckh Investment Letter:

 

hat tip SunSurfer

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/31/2009 - 18:07 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:42 | Link to Comment D.O.D.
D.O.D.'s picture

"...the TV beating You Tube guy..."

LOL...

Fri, 07/31/2009 - 19:15 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:39 | Link to Comment Anonymous
Sat, 08/01/2009 - 01:58 | Link to Comment Anonymous
Sat, 08/01/2009 - 12:41 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:10 | Link to Comment Anonymous
Fri, 07/31/2009 - 19:15 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:11 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

i don't know the tone of this sentence you wrote, but what Schacht did for Germany, is one of the best arguments for keeping manufacturing and industry as a paradigm for economic growth and stability of a country, and Schacht was probably one of the best, if not the best, central banker in history ..

Fri, 07/31/2009 - 22:40 | Link to Comment Anonymous
Fri, 07/31/2009 - 23:17 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

i cant see my new improved pic ... i know what it is ( hippie Bernanke ) but i still see that Japanese symbol ... tyler, marla, wake the fuck up, i want to bask in the motherfucking glory of my AVATAR

Sat, 08/01/2009 - 00:09 | Link to Comment aldousd
aldousd's picture

clear your browser cache.

Sat, 08/01/2009 - 07:28 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

fankoo d00d .. that helped instantly ...

Sat, 08/01/2009 - 15:51 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:11 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Subpar report, I thought.  According to these guys, all we had to do is print and spend money, and we will have a nice slow recovery that could be a bit jagged at time.  We won't have inflation in the near term, but deflation, but buy gold.

They are all over the map.

Sat, 08/01/2009 - 03:32 | Link to Comment speculator
speculator's picture

Yeah, I was not impressed. Sounded like Mauldin himself wrote this.

Such BS to say that the govt saved the day.

Fri, 07/31/2009 - 18:16 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:18 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:12 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

high quality low cost goods " LOL on both high quality and low cost thing

Fri, 07/31/2009 - 18:20 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:23 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:27 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:29 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:25 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:26 | Link to Comment Anonymous
Fri, 07/31/2009 - 18:32 | Link to Comment Anonymous
Sat, 08/01/2009 - 02:35 | Link to Comment sunbringer
sunbringer's picture

The extent of the reach of Goldman´s tentacles is insane. Tyler you now have a forum and an audience that will support project mayhem. Even a cursory search for golmanites in power leaves one enraged and wondering how anything will ever change.  http://sunbringerblog.blogspot.com/2009/07/goldmanites-in-power.

Fri, 07/31/2009 - 18:46 | Link to Comment Anonymous
Fri, 07/31/2009 - 19:14 | Link to Comment Anonymous
Sat, 08/01/2009 - 00:15 | Link to Comment agrotera
agrotera's picture

soon everything will be off books!  Enron lives on in the banks!  Oh yea, in case you didn't hear me say it every day for a month, the Federal Reserve hired an x-Enron lobbyist in May per Bloomberg...how fitting.

Fri, 07/31/2009 - 19:17 | Link to Comment Anonymous
Sat, 08/01/2009 - 00:17 | Link to Comment agrotera
agrotera's picture

I don't think there will be another mondobailout-that is, if that discussion gets any traction, that will be the day that people will start a sit in, in Washington.

Fri, 07/31/2009 - 18:44 | Link to Comment Ags Nightmare
Ags Nightmare's picture

Looks like we are being used as lab rats again by Helo Ben and his pals after Uncle Al's two decade long  economic lab experiment blew up in his face.  We went from Grandpa Munster running our economy into the ditch to Mr Peabody and Sherman's ( Timmy's) fascination with the Great Depressions Way Back Machine. 

They can probably stretch this out a little longer but each bubble is bursting in narrower time frames. Just when you think things might get better and the proper medicine will be taken to extract the rot from the system, they think up of something loonier. 

I guess they think that we can lie our way to prosperity again. Wouldn't surprise me if we see them drop 50 billion more into the cash for clunkers gimmick since the morans in congress have found something that actually gets the herd to spend money on a depreciating asset. What the heck...make it 100 billion.

 

 

 

Fri, 07/31/2009 - 18:51 | Link to Comment LuisvonAhn
LuisvonAhn's picture

Too much emphasis is placed upon GDP. I didn't read anything about the trade balance. The trade balance is the true measure of economic strength.

Sat, 08/01/2009 - 02:44 | Link to Comment sunbringer
sunbringer's picture

Barry addressed this:

http://www.ritholtz.com/blog/2009/07/falling-imports-versus-falling-exports/

My question is: without the 11% increase in gov spending what exactly would GDP have been? What I mean is that the basic premise of Keynes is right, isn´t it? Without this increase in gov expenditures we would be even more screwed. By the way, Keynes emphasized uncertainty and human nature or psychology in markets. Doesn´t anyone else think that they should incorporate some measure of behavioral aspects in their models? 

Fri, 07/31/2009 - 18:55 | Link to Comment phaesed
phaesed's picture

Good report, however it glosses over the near term dangers of deflation due to malinvestment, sticking with the paradoxical mandate of "remaining invested". Whoever thought that idea up must be a hero to the Federal Reserve and the banking cartel.

Fri, 07/31/2009 - 18:56 | Link to Comment jimbo
jimbo's picture

tyler, or anyone else,

do you know of any website where returns

on dow/s&p, etc can all be reclaibrated basis

index members as of say 1980 or so...

bankrupt entities not being replaced, and the full

effects of their loss of mkt value being reflected in the index.

cheers,

 

 

Fri, 07/31/2009 - 23:44 | Link to Comment phaesed
phaesed's picture

Jimbo,

Go to www.djindexes.com, register and look for the historical divisor ratios. It's there, just gotta poke around a bit, it's a lot of work re-engineer the past 30 years but I managed to do it in order to determine the effect of the banks on each of the crashes. It's also a good way to find out how the DJ became so heavily financial weighted, the DJ can also be time indexed to several different legislations that were passed during the 80's and 90's.

A good example is the crash that occurred up till march 31st 1980 when Jimmy Carter signed an important piece of legislation into place increasing the amount of leverage financial companies could use.

Sat, 08/01/2009 - 00:11 | Link to Comment Anonymous
Fri, 07/31/2009 - 19:12 | Link to Comment Anonymous
Fri, 07/31/2009 - 19:19 | Link to Comment Anonymous
Fri, 07/31/2009 - 19:25 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:39 | Link to Comment Anonymous
Fri, 07/31/2009 - 23:38 | Link to Comment Anonymous
Sat, 08/01/2009 - 03:41 | Link to Comment speculator
speculator's picture

It also dilutes the value of existing dollars, so it is a stealth tax on savings.

Sat, 08/01/2009 - 03:49 | Link to Comment agrotera
agrotera's picture

I think what that means is that every dollar that is printed and borrowed from the world, is one less dollar (and credit) available to our country for true needs because eventually, our country may run out of good credit.

Fri, 07/31/2009 - 21:44 | Link to Comment IE
IE's picture

Did you used to have a blog?  The writing style (& content) are very familiar...

Sat, 08/01/2009 - 00:33 | Link to Comment milkum bilkum pc
milkum bilkum pc's picture

I thought that he was saying that for the next year or so, the dollar will be held up by other countries.

Sat, 08/01/2009 - 00:55 | Link to Comment agrotera
agrotera's picture

Hey Anony, please register so your moniker is easily identified.

Thank you!

Sat, 08/01/2009 - 03:40 | Link to Comment speculator
speculator's picture

Well said.

Sat, 08/01/2009 - 11:05 | Link to Comment zeropointfield (not verified)
Sat, 08/01/2009 - 11:38 | Link to Comment I need more cowbell
I need more cowbell's picture

Truly excellent post ( because these are my thoughts nearly exactly- hah! ). I agree cash at present is king, my only question is in what flavor? Certainly not the Euro, but what are your ideas on yen, Aussie, or Canuck? Could buck devalue relative to other fiat currencies?

Sun, 08/02/2009 - 20:14 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Your post is awful, long and rambling and making no sense:

"And the Fed, with more than 20 to 1 leverage, was at great risk of going out of business as their assets continued to fall more than 5%."

The Fed has zero leverage, they can always print more dollars.  The Fed can't go out of business.

"we suffer the recipe for default and deflation"

Since the Fed can print dollars ad infinitum, we will never default.  Instead we will secretly default through monetizing the debt.

This is not the 1930s, something you deflationists still can't seem to understand, even after trillions of dollars have been created by the Fed (many of which are undisclosed).  Our currency is backed by absolutely nothing.  We will never run out of something that we can create infinite amounts of.

Fri, 07/31/2009 - 20:03 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:16 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:16 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:17 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:19 | Link to Comment Anonymous
Fri, 07/31/2009 - 21:03 | Link to Comment Anonymous
Fri, 07/31/2009 - 20:28 | Link to Comment topshelfstuff
topshelfstuff's picture

I hope everyone keeps in mind, everytime we hear the words "Chinese Manufacturing & Exports" used, that much of the Manufacturing is Foreign Ownership, mainly the US---you all do remember all the Manufacturing, and All the Jobs, the Corp. America shipped overseas [China the main recipient].

Fri, 07/31/2009 - 21:18 | Link to Comment Anonymous
Fri, 07/31/2009 - 23:53 | Link to Comment Anonymous
Fri, 07/31/2009 - 21:51 | Link to Comment Anonymous
Fri, 07/31/2009 - 22:01 | Link to Comment Anonymous
Fri, 07/31/2009 - 22:04 | Link to Comment Anonymous
Fri, 07/31/2009 - 22:25 | Link to Comment Anonymous
Sat, 08/01/2009 - 00:22 | Link to Comment agrotera
agrotera's picture

I just don't like that he says it will take 30 years to stop the Fed.  That makes the task seem impossible. 

It only takes one vote by Congress to revoke the Federal Reserve Act.

Sat, 08/01/2009 - 09:06 | Link to Comment Anonymous
Fri, 07/31/2009 - 23:11 | Link to Comment Anonymous
Sun, 08/02/2009 - 20:18 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Probably not bad plays.  Any company that sells global commodities will do well when the USD craters.

Fri, 07/31/2009 - 23:38 | Link to Comment Crude Oil Trader
Crude Oil Trader's picture

If you truly still hold a position in POT and MOS you have not made a penny if you have not sold it. Please sell it and come back and tell us that you made money. Paper gains are no different then paper loses.

Fri, 07/31/2009 - 23:43 | Link to Comment Anonymous
Sat, 08/01/2009 - 00:37 | Link to Comment milkum bilkum pc
milkum bilkum pc's picture

I think POT may be good next year or so.

Sat, 08/01/2009 - 01:13 | Link to Comment calgaryschmooze
calgaryschmooze's picture

 

Maybe his plan is to roll his position into POT paper and then let some of it go up in smoke?  Might be a better choice to anticipate his munchies and buy up some salty snack companies.  Then again, he's expecting the highs to continue for a long time so one might worry that this might simply be a gateway to riskier choices in the future.  Oh well, he probably will have a hard time remembering this conversation anyway.

Sat, 08/01/2009 - 01:19 | Link to Comment Anonymous
Sat, 08/01/2009 - 11:27 | Link to Comment Anonymous
Sat, 08/01/2009 - 07:30 | Link to Comment aus_punter
aus_punter's picture

"Buy and hold is dead??? I bought POT and MOS 5 years ago and I'm still up by multiples! You guys are nothing more than perma bears"

Do you understand the pointlessness of your post ? If not I am happy to shed some light on why you are so wrong

Sat, 08/01/2009 - 10:43 | Link to Comment ph012
ph012's picture

"Too much oscillation between peaks and valleys..."  where has this guy been?  Up until last year, the big macro question was what caused the Great Moderation of the last 20 years.  Lesson: never buy an investment letter.  It's just hot air!

Do NOT follow this link or you will be banned from the site!