This page has been archived and commenting is disabled.
Guest Post: If This Is What Deflation Looks Like…
Submitted by Mike Krieger of Kam LLP
Automatons with business suits swinging black boxes,
Sequestering the blueprints of daily life
Contented, free of care, they rejoice in morning ritual
As they file like drone ant colonies to their office in the sky
I don't ask questions, don't promote demonstration,
Don't look for new consensus, don't stray from constitution
If I pierce the complexity I won't find salvation
Just the bald and overt truth
Of the evil and deception
There is an inner logic,
And we're taught to stay far from it
It is simple and elegant,
But it's cruel and antithetic
And there's no effort to reveal it
Graduated mentors stroll in marbled brick porticos
in sagacious dialog they despise their average ways
betraying pomp and discipline, they mold their institution
Where they practice exclusion on the masses every day
Decorated warriors drill harmless kids on pavement
Stimulating tyranny under red alert
Protecting the opulent and staging moral standard
They expect redemption of character and self-growth
Bad Religion, Inner Logic (1994)
If This Is What Deflation Looks Like…
Then I really, really, REALLY don’t want to ever see what inflation looks like. Despite the title of this piece I do not wish to engage in some inane debate about whether deflation or inflation is the risk. I have made it clear for two years now that we are in a highly deflationary environment occurring within the backdrop of a purely fiat monetary system that is governed by “experts” whose ideological framework is based upon the false economic religion known as Keynesianism. So for people that are actually trying to preserve their wealth an intellectual debate on inflation or deflation might be interesting but is not particularly productive. I can understand why many in the financial services industry see the greatest risk to be deflation. Why? Because for them it is. Stocks, bonds and real estate will perform horribly in the environment that we have. Even if they go up for periods, over time they will not make up for the cost of living increases in the things that we need. This is the major disconnect happening right now between “Wall Street” and “Main Street.” Wall Street has been coddled and pampered for two and a half decades by the natural forces of a secular bull market in financial assets as well as the Federal Reserve Chairman and a D.C. establishment that refuses to allow the free market to function. So when a money manager of financial assets looks into his future and sees deflation he is correct. When the majority of “Main Street” looks into their future they also correctly see inflation. That is because when you have 40 million Americans on food stamps I am sorry but they have much bigger issues to deal with than the S&P500. So the world we are looking at is where a BLT sandwich could cost $12 and home prices drop another 20%. Investment professionals have a very hard time getting the heads around this concept for some reason but that is the reality we are looking at. Goods that are wanted around the world will rise in price in debased dollars while non-essential items deflate. The Chinese want pork but they could care less about some McMansion in Ohio. There is nothing anyone can do to change this. It is a natural cycle as simple, powerful and inevitable as any cycle in nature. If it must happen, it will happen.
My problem with the “deflationists” that recommend a high allocation of assets to long-term treasuries is that there are a lot of better assets to buy in the type of environment we are entering. As I have repeated over and over again these assets are primarily precious metals but also include other commodities. Especially commodities that people need and are strategic to governments such as food and oil. There are plenty of equities that are associated with these themes and in my opinion they will do far better over time than long-term treasuries. Gold for example IS the end game. Treasuries certainly are not. Gold is the best way to short the market. Gold is the ultimate form of payment. Gold is your vote as an investment manager and a citizen against the maniacs running governments all over the world. Without going too far into it in this email I think the move we just saw in gold and in the gold shares is the beginning of one of the most powerful moves we will ever see in our lifetime. I keep reading technical guys talking about tops in gold. We are very early into this gold bull market from a price perspective. I think we could see similar gains of the last ten years compressed into the next two. I also think gold shares will start to outperform gold itself, which would be an major transition. The curtain has been lifted, the emperor has no clothes and the quicker you figure this out and act the better.
Ok, so some quick charts here for those that aren’t paying particularly close attention to the various commodity markets. If this is deflation…
Corn 1 Year Chart
Cotton 1 Year Chart
Lean Hogs 1 Year Chart
Currency Comments
Two weeks ago I discussed that the market would push the yen to the point where the BOJ would be forced to take aggressive action to stop it and then potentially the yen would start to collapse and the JGBs would go with it. This would then herald the end of the government bond bubble globally (it’s really a fiat currency bubble). Well, the yen did push the government in Japan and they did act and the yen got smashed by 3% versus the dollar in one of the most powerful reversals I have ever seen. Does this mean the end of the yen’s rally and JGBs? Way too early to tell, but I did get something else from it. Surprise, surprise it is exceptionally bullish for gold. Why? Because it just proved to another segment of the investment world that perhaps remained in denial that all governments are playing games with your savings. That fiat currencies are pieces of paper that are being fondled and molested by global central bankers. That these games will not stop. The Fed can buy all the SPU futures they want and the other players can sell the treasuries they recently bought back to the Fed and then goose the market, but the magicians of mayhem can’t print gold and that is all you need to know.
Welcome to the Revolution
There is a revolution happening in America and it is coming from all sectors and it is being brought to you by people from all walks of life. My generation has been subject to vicious propaganda and brainwashing since we were born and we are waking up to it. We are not happy about it and we are going to change this sick system. Did anyone else find it odd that the media decided to blow up a story about some nut that wanted to burn Korans? We are in a depression and THAT is a story they chose to headline? Very suspicious. Don’t fall for it. Take the red pill and let’s get on with it.
Mike
»
- 22432 reads
- Printer-friendly version
- Send to friend
- advertisements -
Deflation of what you own, inflation of what you need to buy. Simple.
"Deflation of what you own, inflation of what you need to buy. Simple."
If it's all that simple, buy some land and grow and raise what you need to buy. Now, as for fuel, you're on your own there. Obviously, it can't really be all that simple, because different people, in different lifestyles and different professions, need different things, but I get the point that fuel and food will become expensive.
What's difficulat to understand is why housing will become so cheap.
Housing has more than 20% to fall. More like 35-40% unless the criminal reserve fires up the presses for another couple trillion into Faggie and Fuckup on Christmas.
I'm counting on a stimulus check to buy more silver coin with. Heck, even a rebate will help but don't wait until the fiat is worthless.
Good luck with that! Only tax increases from here on out!
I just hit my screen because I actually thought there was a spider on my screen :)
Tomorrow will be the most beautiful day of Raymond K Hassel's life.
Let the chips fall bitches.
Let's make this simple....
1) There is a huge wall of bad debt that lingers...yet to be destructed....
When this destruction is realized.....then everyone will experience deflation across the board....
Counterfeit money....and accounting fraud are holding up this wall....so far....
The wall is going to fall down.....not a matter of if....but a matter of when.....
Then the R word....REVOLUTION....
"Clean house time".....
Time to make some folks accountable by taking them down and redistributing their stolen wealth to the rightful owners....
How does that work?
Simple, margin expansion and a relatively small mining delta vs the upsurge in PM prices. Also, the companies that manage their hedge portfolio the best, not like AngloGold for example. You must know the company but it's probably a good idea as part of any equity allocation along with Telcos and Utilities.
I thought it was unrelated to miners, my bad.
In other words.....
When you own the means of production, you own the supply....
Not so much about the post - but the clip... and the idea of furious "revolution"
"I say, let's evolve, and let the chips fall where they may..."
Well first off we are not "hunter, gatherers" anymore despite the overarching theme of Fight Club - the agrarian revolution changed that 10000 years ago. The earth cannot support anywhere near 6 billion people as hunter, gatherers. Being civilized means accepting this fact - and the consequent division of labor and mutual cooperation required.
Second, "let the chips fall where they may" is the worst kind of nihilistic philosophy to have during a crisis - people probably said that when Hitler took power in 1933, when Robspeirre came around during the French revolution, Russian revolution etc... the "chips may fall" in a lot of worse ways then now. If you accept the premise that few countries in world history have granted as much freedom as America does - even up to this day - with all it's imperfections... you'll wonder if "letting the chips fall where they may" won't lead at best to some sort of reversion to the mean, and at worst to some pendular movement toward tyranny.
How about focusing on the strict programmatic philosophy and the "Central Bank Enforced Plan" that allowed the creation (and collapse) of the Weimar republic that subsequently resulted in the rise of Hitler? Or is that too forward looking?
They paid the Ruhr workers to strike, we pay our former workers not to.
I'm not familiar with the "strict programmatic philosophy" or the "Central Ban Enforced Plan" in the Weimar republic. But I agree that very likely central banking and centralization of power will lead to increasing disorder and dispair by the average citizen (although they won't see the connection) - and they might seek a "strong man" to take power. Blind anger from the masses can precipitate "change" but rarely for the better. Only solution is education that directs their anger at the appropriate target - central banking and government overreach... if more people read Zerohedge...
...requires a dig into IG Farben industries!
Very well said. BTW, folks - it's just a movie.
AAPL is just a stock.
All that you see and desire is Maya.
It is also an excellent book.
http://www.amazon.com/Fight-Club-Novel-Chuck-Palahniuk/dp/0805062971
How about the genocide of Native Americans, the enslavement of African Americans, the internment of Japanese Americans... Did any of this happen during the time frames you mentioned.... Or are these events inconvenient to our self image and thus swept under the rug... Hunter gatherers.... Give me a break... please.
"If it's happening to you, it's genocide.... If it's happening to somebody else, it's ethnic cleansing.... If you're doing it, it's manifest destiny...." Right....?
Best regards,
Econolicious
I am in absolute fucking awe today.
The ability if crony capitalism, the FED, and manipulated numbers. Five million homes under water, foreclosures hit 95.3, gold making new highs, and a completely bankrupt currency making highs against the dollar- requiring intervention. And the market is flat. WTF???
I am directing my comments here to boilermaker. Brother I feel your pain. In 35 years of trading I continually underestimated the herd mentality and the ability of crony capitalism to keep a lid on things. I was always 6m to 1y early calling market declines. Think Peter Schiff in 2006. In early 2007, I closed out all long positions, shorted Countrywide with puts and was able to frontrun the rush into bonds. In 2009, I liquidated all positions including my 401k.
If you have not fired all bullets yet, stay short. If this market runs up more, short more. Stick to your convictions because there is no way in hell they can keep a lid on this worldwide mess much longer.
+++
what amazes me about this whole situation is that folks seem to think the markets (dow, etc.) are being intentionally assessed and invested in right now... other than the FED's debt PDs and the zillions of weekly paycheck auto-depositors, not many folks are actually looking at the market and making explicit decisions based on 'value'.
this whole situation is a study in institutional (CB/gubmints, etc.) manipulation and sheeple 'dollar-cost-averaging' - just adding fuel to a dying fire. i wonder what Fed chairman will make our era his doctoral thesis in 75 years...
i'm currently worried that when everyone has finally been scared into 'cash', that 'cash' is the ultimate target... and contrary to ben's efforts to print us out of this, they could *very easily* destroy confidence in the currency. *very easily*. overnight. and this would make the rationality of the deflation->inflation->hyper-inflation debate completely moot.
this line of thought brings to mind the distinction between
actual cash and bank deposits, the critically difference being
significant in a hyper stressfull period.
Fellow BI_flationistas unite! We're going BI!!
Yep, you read that right. The world and the US included are going BI and the pace is picking up.
Let's pick through BI_News, just from today alone:
-Welcome to the housing Double Dip, a contracting Philly Fed with high prices paid but low prices received, chronic high new unemployment claims as far as the eye can see, 20 straight weeks of equity mutual fund withdrawals (mostly for hardship). That's deflation in housing, employment prospects, real incomes and retirement accounts. Net worth DOWN.
-BUT at the same time: US current account deficit rises due to increased imports (which we're fully dependant on) and import prices. Copper hits the highs not seen since April. Input costs in the Philly Fed survey are rising. Core PPI up. India raises rates due to 8% INflation! Cotton hits 2 year highs.
you know the trouble with BI_flation? You don't need raging inflationary or deflationary components when both work together to crater buying power for consumers and business margins. That's why it's so deceptive and flying below radar.But far worse is that the Fed and economists have absolutely no tools, and not a clue how to deal with it. QE2 will only fan the flames. GOld and PMS: the only solution to protect buying power. All other assets are losers or a crap shoot.
Caviar, great insight on how bi_flation will slaughter so many. Big assets down, will hurt J6P. Necessities go way up, will hurt J6P.
Au, Ag, Pt, Pd.
The trend is set. The trajectory is clear. The smart people will protect their buying power with PMs. They'll shine.
Also, Pb, to protect the Au, Ag, Pt and Pd!
I Don't know how they've kept the lid on this long.
News I haven't seen anywhere else yet today, www.moneynews.com/FinancialNews/USCreditCardsCharge/2010/09/16/id/37089.
Credit card chargeoffs are rising again at all the CC companies (August).
Bank balance sheets are a total farce, gotta be. With the uptick in foreclosures (25%), balance sheets have to be taking big hits.
A friend asked me where to get list of troubled banks, I know FDIC considers that "classified" info, but coulda sworn someone here had a link to it somewhere a while back ago? Any ZHers have that info?
i think the "calculated risk" site posts a list sometimes.
Thanks!
Usually along with the Friday bank fails posts...
While we're looking for info, anybody know where to get info on de-listed stocks? I tried google, and the NYSE and NASDAQ sites, nothing there, move along. I swear there have been 3-500 companies delisted in just the past 6-9 months, but there's no mention of it anywhere, except when a big one, like Fannie or Blockbuster goes down.
Anybody?
poof -- gone!
The link is good but there is no article there at all. Hmmmm.
I just went to main page www.moneynews.com , it's still there under finance news.
The article's use of the word "inflation" is a bit confusing.
The best definition of "inflation" is simply an increase in the money supply.
The prices of individual goods may go up or down. The size of cash holdings that people desire may go up or down. But these things aren't inflation.
Inflation is a devaluation of a currency. When prices for everything increase, your dollar is worth less than before. A large increase in a currency base achieves the same effect. More money, less value.
Food and other valuable commodities will go up as long as places like China and Europe manufacture false numbers in a global ponzi. When the SHTF, prices for EVERTHING will drop. Our current mild deflation will look like a walk in the park!
+1... EVERYTHING WILL DROP! You get it! :)
"When the SHTF, prices for EVERTHING will drop. Our current mild deflation will look like a walk in the park!"
Think so?......I do not. In a truly SHTF scenario, everything will skyrocket that pertains to staying alive.If you have it,in excess, you will become the Wealthy Landlord.............unless the fascist's,or Natl Socialists come to power.
Durable Goods?..yeah, I agree.............
I'd like to complain about the deflationists lounge. The donuts are stale and the coffee is cold. They moved the sofas and tvs out. I heard a rumor they were going to change the locks.
LOL....well throw this on the coffee table then -
http://www.wallstreetexaminer.com/blogs/winter/?p=3082&utm_source=feedbu...!+Mail
You should read this....
The misguided reaction to Tea Party candidates BY GLENN GREENWALD Most people are not like Rove's political patron, George W. Bush, who was born into extreme family wealth. O'Donnell's financial difficulties, which Rove is describing, and implicitly condemning, are far from unusual for ordinary Americans. In 2009 alone, there were 2.8 million home foreclosures. Contrary to what Rove is trying to imply, an inability to pay one's college tuition bills or a struggle with taxes are neither rare nor signs of moral turpitude. Those are common problems for a country whose middle class is eroding as the rich-poor gap rapidly widens. If the kinds of financial struggles O'Donnell has experienced are disqualifying from high political office, then we will simply have an even more intensified version of the oligarchy which our political system has become. Best regards, Econolicious
I do not agree with the Tea Party, but they are the first large set of Americans to realize their own party sold them down the river. It give me hope others will follow suit and give better ideas.
It takes a lot more than just talk to wake some people up ...I can attest to that.
...and even when they finally wake up....then What??? Start complaining and get yourself on the no-fly list? Everything is in place for large numbers of awake people -
http://yophat.blogspot.com/2010/01/executive-order-fema-governors.html
You are right Yophat... Just look @ the direction the barbed-wire is facing & you have the answer...
You guy's have a CLUE when the maps for this Order was drawn up?.Over 40 years ago.
Now,it remains to be seen how many go along,when they BAN private ownership of firearms.
You had best be gone,or locked and loaded. Talk about SHTF?.
The Financial meltdown will be childs play.
LOL
LOL....yeppers goes back to Ollie North funding FEMA with CIA drug money (because Congress wouldn't allocate any money to it at the time)....or Rex 84. One could easily argue that it goes back much further to Operation Gardenplot.
Get into all kinds of fun discoveries going down that road.....like Kissinger and Operation Condor, Operation Phoenix, NSSM 200, etc etc etc etc etc etc
That's why I read Glenn Greenwald's posts @ Salon.com. He is a progressive and one of Obama's biggest critics.... He's more concerned with matters of justice, however, it's all a positive feedback against the establishment and their lackeys, the elite politicos and their MSM ass kissers.
I consider myself a progressive libertarian. We need big government for somethings and no government for most things....
Ciao,
Econolicious
its called skew-flation snitches
here's the link
http://www.salon.com/news/tea_parties/index.html?story=/opinion/greenwal...
The main issue today is that we now have the net and we can bypass the gatekeepers and validate information for ourselves. I will come to my own conclusion without the help of professional agenda-mongers, thank you very much.
Worst of all worlds, collapsing asset prices with rising commodity prices. I'm eager to see the day when people have a 60 inch TV in every room, but can't afford to turn them on. Life truly is an absurdest comedy.
Nice one
....like living in a half million dollar house and not being able to afford to water the lawn! That's half my neighbors right now!
...being able to afford it BUT there's no JUICE in the power outlets and zero WATER PRESSURE! Now that would be getting to the level of sheer hilarity... </sarcasm>
In the grand scheme of things, we'll all be dead. And after we are all dead this period of time we are going through will be seen as history, much as we now see the 1930s depression. Eventually, it will be something that happened more than a century ago. Eventually, it will be an episode of ancient history which only classic scholars will have an very imperfect grasp of. Eventually, it will be forgotten and nobody will remember or care or think it is relevant to their time, any more than we refer to the Assyrian Empire for lessons on monetary policy. My point is, no matter what happens this whole situation is ephemeral. Mankind will survive. There may be convulsions, turmoil, war, famine, revolution, but there will be survivors and the human race will go on. Until it doesn't. So...why worry? Inflation, deflation, what difference does it really make?
I get your point, but the "what difference does it make" nihlism is precisely the opposite conclusion I draw. The difference, for me, is that I want to live and thrive -and I want this for my kids- even if with "convulsions, turmoil etc". If all hell breaks loose but life goes on, as you correctly point out, then why not thrive? Why not prepare your investments, your property, and yourself to come out ahead? There are always winners and losers, and I know which side I want to be on. That's what difference it makes.
"WHAT" is coming? What is the big event?
The market still have a "V-Shaped" recovery priced in. All bad news priced in. Obama's "radical agenda" PRICED IN!
WHAT IS COMING? NEED AN ANSWER!
No big event, that's the trouble. Just chronic deterioration and a crumbling economy.
Yes. All this apocalyptic talk is actually just vanity and narcissism. There will most probably not be any big event. The greatest risk for average folks will be encoaching poverty, and health(obesity, diabetes etc) - and a dull, unexciting life. That is the big event .
And for those with the energy, smarts and gumption to take entrepreneural risks, work hard etc - there may be opportunities to escape ths trap of poverty and ill health.
Thats how reality looks in a non-bubble world where credit no longer substitutes for income.
Exactly, which is why a lot of ZH posters need to grow up and quit posting crap about the apocalypse. Especially the boomers--get over yourselves!
maybe there won't be an "earth-shattering ka-boom" ala marvin the martian...
but i feel like it'll be more like a pandemic (sars/h1n1/etc) that actually 'takes'.
it'll start slow, but once appreciated for what it is... it'll be beyond controlling.
i'm not sure if that's ka-boom, or an exponential crumble. not much makes me feel like it's gonna end with everything's Okey Dokey, though.
Youre clearly a loon.
... asked the proud Roman in the year 470AD.
What came after was the dark, and a long slide into forgetfulness, and the death of a once-great State.
Yet existence went on, daily life, children were born and grew up. Old languages were lost, and the meaning of those lives of old and what those people cared about, all forgotten. Now we have Italy where the Romans stood. The Italians are happy with how it turned out. The world went around the Sun. It always goes around the Sun.
Get yer own goddam answers.
Is that Johnny Bravo with a new handle?
I'm delighted to be one of the few who understands the perils of Biflation. What's fun will be to watch how economists, Wall Street, bankers, and the Fed fail to see it and compound their mistakes over and over again. They've crated a monstrosity of an economy where everyone will get killed. Nothing can be worse than watching net worth and margins fall apart while cost of living and doing business continues to rise inexorably. It will destroy buying power. Whatever you think you have invested, saved or coming to you won't buy 1/4 of what you'll need. And every one of their bonehead decisions will compound the error: QE and stimulus will fan inflation, post-bubble economics will cause deflation. But they won't see it in their numbers because the effect is additive in an exponential manner (as in a reverse multiplier effect).
duplicate
duplicate
....nah its owning half of LA but not being able to afford the army to claim it!
....or half of New Orleans after a Category 4 and the insurance company goes belly up!
I've been claiming for 6 months that it's inflation in the things you do need, and deflation in the things you do not need.
We do not need Wall Street. Goodbye you pack of parasitic ass-grabbing mo'fo's, it was so not nice knowing you.
Soon the real work begins; building firewalls to keep these useless meat bags from ever again soiling the earth with their noxious and toxic existence. I would start by outlawing interest -- paid or collected -- and promote a return to PM coinage. Wouldn't hurt to make the concept of Federal government unconstitutional, or failing that could simply declare Federal taxes unconstitutional and allow the thing to die in a corner somewhere. With the Feds gutted and Wall Street dismembered hell maybe we could finally get some peace and quiet around here.
Better get used to it because Wall Street is never going away.
Nothing is going to happen. NOTHING! Got it?
This is it! the new normal. Get used to it!
Football seasons starting people are more worried about that then the economy.
Stadiums are FULL
Wall Street is already dead.
And they know it better than I do.
Truly. +10
Like the man said, "Money can't buy happiness but it can buy a lot of antidepressants."
...too bad the research shows they are no more effective than the sugar pills (placebos)...unfortunately the same cannot be said of the side effects!
Would be so nice! Unfortunately, will be a lot of fighting and noise until we get there.
That's okay with me, I won't mind hunting them down when the time comes.
See ya there!
In the age of Kali, you do as Kali commands -- she wants blood and violence -- and lots of it!
Yup, there is absolutely no need to accept rotating sticks up our butts by the feds. The "states" of the USSR get along fine (or at least "better") without the commie predators holding them down and reaming them.
But take it even further. Let's get to the point that large numbers of folks start to recognize that so-called "government" is pure fiction, and does not exist in any way shape or form. Any ideas to the contrary are pure, unadulterated mass delusion.
Thus, what we need is an end to federal, state, county, city and any other insane levels of government (like UN, IMF, AMA, endless more).
Now, obviously it will require effort to get the huge numbers of morons who are massively braindamaged by lifelong propadanda and pavolvian conditioning to clearly understand how completely they have been had. No kidding.
So here's one idea... a bit dangerous, because it leaves vestiges of the evil in place... but easier to "sell". That is "government [programs] by subscription". This removes the non-voluntary aspects of government, and lets insecure bed-wetters with what they consider to be some kind of "security blanket" (someone to make major decisions for them).
But all fictions must go. Or to be more precise, fictions are just fine, but fictions must never be confused with non-fiction. No more "official, widespread fictions".
No more governments.
No more authorities (AMA, FDA, etc).
No more fractional reserve anything whatsoever.
No more fiat or debt money (PM bars/coins only).
And only 3 laws, period - the 3 laws everyone agrees on:
1: do not harm or kill other sentient [human] beings.
2: do not damage or destroy the property of others.
3: do not defraud.
To defraud means to mislead or fail-to-perform in any contract, agreement, transaction.
No more fiat. No more fiction. No more government.
To achieve "the good life" (to the extent possible for mankind), all we need to do is "eliminate what does not exist", which simply means, "never treat a fiction as if it is real". This is the lesson of "the emporer with no clothes". We must all recognize, "the emporers are pure fraud". We must refuse to be blind, stupid, sheople on demand for the benefit of predators who grab control of mass delusions. We must say NO.
i like it,
but sometimes we do need to get collective and build a road or have some firemen/teachers around.
it's when we institutionalize (and abstract via taxes, etc.) these processes that things get sketch at a rapid pace.
+++
SILVER cabronas!
"Take the red pill and let’s get on with it."
Right there with you Mike.
This article is one big "RED MEAT" for ZH crowd.
"Then I really, really, REALLY don’t want to ever see what inflation looks like."
We've see inflation. It is what was happening from 2002 to about 2007 when home values went to the moon. An overheated economy fueled by easy money. And it took em 2 years to arrive at that conclusion. They arrived at that conclusion, just as deflation began in earnest.
And we've seen deflation. It is what was happening from late 2008 to present. And once again it has taken 2 years for the mainstream to arrive at that conclusion. Which leads me to believe that the situation has changed and deflation is not their biggest concern.
So after deflation, what comes next?
. . .
I just read that foreclosures were up 25%. So, after dragging their feet for 2 years, why are they now interested in foreclosing? It has to do with risk, right?
We know the assets in question have de-flated in value.
We know that real estate is down and the peak selling season is over.
We know that winter is the cruelest time for an empty house.
Is there a material change in process that would make foreclosure more attractive?
Without going all tin-foil hat:
one could assume that loss recognition rules have chanaged making foreclosure more amenable.
there may be the advent of new mortgage products that allow the unemployed to purchase homes.
there could be an expectation of rising home prices accompanied by new buyers with pockets full of casy money - oh wait, that would be hyperinflation - and i promised not to go all tin-foil hat - sorry.
Just checked the mail, like I do every day. No notice from the court on my foreclosure moving forward. Another day in paradise I call it. Bank knows how badly the loan was falsely documented and probably can't locate the note. Knows house needs repairs and has been appraised well below their loan value. It gets better: I'm not even on the hook. Took possession after my father (may he rest in peace) passed away.
Conclusion is that the bank probably doesn't even want the property. Eventually, I will file for quiet title without opposition, or make a deal with the bank or fight them to the death in court or gain through adverse possession. It's all a matter of how willing you are to take on risk and maximize your potential.
Sheeple paying mortgages on underwater properties are sure to be burned in the end. Better for everybody to default at once and bring down the entire banking cartel, the Fed with it.
And good luck with all that gold. Try buying a loaf of bread with a Kruggerand.
You were really on track until this statement. Nobody intends to buy anything except bigger assets with gold. A nice worn Franklin half dollar will get you a bushel of corn at any farmers market.
Here is a 100% guaranteed way to make money in a casino, every time.
No, really. Just gotta find a casino that has slots that use real US halves. Are there any still around?
Anyway, I used to buy $200 worth of halves, 400 halves. Unwrap each roll. Find the silver halves by looking at the roll from the side (the silver is distinctly different than the side of a clad coin). Then walk over to a different cashier, and cash out. Then go to a different cashier and repeat the process. I used to do this while waiting for a friend who liked to gamble. I'd generally find one silver - usually a '65-'69 partial silver Kennedy half - per400 halves. Every once in a while I'd get a Franklin half. Anyways, if you do this steadily, you'll wind up with a pile of silver.
Oooh. I almost forgot about that. I was in the property management business and we had over 1,200 units in our portfolio. Owners would give us houses that had been vacant and not winterized. What a mess. Water does not have to be on for pipes to break. Some had been empty for months. Carpet is the nastiest stuff on earth, it harbors all sorts of deadly stuff. When a house has been flooded and left closed up it really gets bad. We would open the front door and that little draft would trigger all the molds and mushrooms to pop open and release the spoors. We had to wear particle masks to keep from getting lung diseases. It was not a pretty sight.
On days like today where the market is up on bad news, tell yourself this: This is the Fed Creating Inflation. That's the policy and that's the goal. Not growth, not "sustainable industry", just inflation as a substitute for growth, an illusion to satisfy the primal level of understanding that if things are more expensive then they must be worth having.
That's why we're stuck in a Biflationist nightmare. Because no jobs, no industry, no real growth is being produced. So there's no growth in opportunity, creativity, social mobility and sense of purpose. That's all happening elsewhere. We were supposed to just consume cheap Chinese products and flip condos to one another until the day your kids buy your coffin (preferably Chinese). Under these conditions real incomes and employment opportunities will just deflate. So will real estate (Res and Cre). So will retirement assets and expected benefits from medicare and social security (already happening).
Protect your wealth. Even if you're not wealthy, protect your buying power before it gets wiped out. Gold and precious metals are the answer, as so many have seen already.
I agree with everything up to your conclusion. You can't protect your wealth no matter what you do--no physical asset, not even gold, is going to accomplish that. Don't even make it part of your thinking. Better to settle your debts now under the current regime and await the changeover to the new regime. The rest is a waste of time. You'll get taken to the cleaners with gold, silver, all of it.
It won't be with pleasure that I pass your shrunken, starved corpse along the side of the road. I'll just shake my head that someone thinks that there is NO way to preserve wealth. There is a way, my nihilist friend.
LOL...yeah what are your recommendations????
...if you have to ask.
Hey SpeakerFTD, if you juxtapose a few psychological constructs you end up with a much more lucid picture. What we now have is Pavlov's Hierarchy (those who experience a conditioned response to fiat failure and react by immediately purchasing PM's) and Maslow's Dog (which is the final destination of family pets as a food source for those who experience response extinction).
clever...
does Pavlov's Hierarchy have tiers, where we have the equities bell, the bond/treasuries bell, the PM's bell, etc.?, or is that still with Maslow, and we just fight over the good parts (drum-sticks, etc.) until there's only fur left?
I just heard Tim Geithner say that he didn't appreciate the corn holing he got from China.... Bitchez....!
I remain skeptical. You cannot show a few commodities charts and prove a point about hyperinflation that easily. For one thing, all these futures markets are being speculated in wildly. What is to say that what you are seeing is not a commodities bubble? A gold bubble? It could be--I'm watching grocery stores becoming unable to maintain their pricing power and offering 2 for 1 and coupon deals. Lay's potato chips come to mind--totally not a staple item, but they topped at $4/bag (plus the package shrinkage where 16oz. is now 13.25oz.). The point is, almost every week now the store I go to is selling these potato chips as a buy one get one deal, so they're really $2/bag, which is pretty fucking far down from $4/bag--price deflation! It's the same with hundreds of other grocery items. The store I go to even advertised that they cut prices on hundreds of items. They are trying to conceal their loss of pricing power, but what has happened is becoming more obvious by the day. So if my BLT is half what it was two years ago, what does that say about the commodities thesis? It's bunk, that's what. You're looking at charts of goods that have been bid up by speculators not interested in actual delivery and you're extrapolating nonsense. Get the fucking speculators with their 0% loans out of the market and watch what happens to commodities!
Like the aricle said, there will be inflation in goods that the rest of the world cares about and needs, and where the market is global and not national or local (like nat gas), goods like gold, silver, oil, wheat, soybeans, copper, etc. Asia doesn't give a rats ass about your potato chips. Or they don't care about Cadillac Escalades or McMansions.
Aerojet, totally agree on your concluding line. And yes despite all the frenetic speculation the prices of many commodities are still off their highs from several years ago. I wonder about the concept of the $24 hot dog. Who is going to buy one? Not me and not 99% of the people I know. I'm the unemployed family member who does all the grocery shopping and meal prep. A lot of people are complaining about high food prices but I'm just not seeing it. However to get the deals requires some work - comparative shopping and buying at more than one store. I've managed to keep a lid on my food costs plus a full pantry, freezer and wine cellar (all home made). It's a challenge that I enjoy meeting and one of the few small ways I can get back at the mindlessness of the consumer driven "system".
Seriously, I'm seeing the same. Food is about as inexpensive as it's ever been if you shop judiciously. OK, so I'm eating less steak and more chicken, but vegetables are rock bottom as are most other staples. My local store just put peanut butter up for 99¢, 1/3 off the usual price. Pasta is ridiculously cheap.
Maybe the producers are getting higher prices because the US is exporting more, but there's certainly no food shortages in the US. Hell, that food stamp program needs to keep them welfare momma's beefed up!
freight train of coupons for restaurants that never previously considered coupons....GAP pleading and begging ya to come down and buy .55 cent jeans off the clearance rack (yeah my wife bragged about that one for a week)....and on and on
I'm expecting basic commodities to keep rising though....world is getting less and less safe by the day.....and the supply chain is very very long!
A guy I know today had to talk his manager down yesterday after an exciting day at the grocery store. Laid off an employee who then tried to slit her own throat with a box cutter in despair....at which he and some employees engaged in preventing her from going through with it...
Main street is dead and men's hearts are failing them!
These upsetting events are going to increase in intensity and frequency. Don't forget, 500,000 people dropped off the unemployment train this last week. Things are gonna start getting ugly.
Amen! Lock n' Load!
Got to love the shout out to my boys Bad Religion.
"The economy's name is Robert Paulson."
"If you print more money, we've gotta take your balls."
Combine that with a nice ZH logo and you've got a kickass t-shirt :)
Nice piece, particularly with video and sound.
My, my, my. I expected it to end with the buildings toppling in a glorious credit reset.
Oh, well. I suppose it's more than enough to get the DHS assigning a whole fucking team to this site. That is definitely the problem with the media, but reality is what it is.
Great work. Finally: Fight Club.
The deflation trigger event. An event causing people to lose faith in the ability of a nation to pay its bills by extracting surpluses value from ts human and natural capital stock. We see this in nation states when violent destructive riots erupt. investors lose faith in government's ability to govern, and as we see in Greece, a hemorrhaging of its banks. History is repeating itself. The finer details are yet to be painted in, but the direction and the outcome are certain. There are libraries dedicated to what we are experiencing and have experienced throughout our recorded history. Investors are patient knowing the fatigue that comes to nations having to put out almost 10% of their income just to cover the interest on the bills at 1% interest. I am no gold bug by any means but I see nations and individuals returning to gold as a store of value for 'comfort', and as a way of restoring a measurable knowable floor from which to do business.
The mixed conflicting market signals return. It reminds me of periods in 2007/2008 during the market uncertainty and dislocation in addition to market intervention or rumours of market intervention (like the QE chatter now).
http://stockmarket618.wordpress.com
I found lots of interesting information here. I love zerohedge.
virtual server hosting
windows 2008 vps hosting
mssql hosting
windows vps server