There is a very real possibility that the government spending is
what's
CAUSINGthe
deflation.
Now to be fair, correlation is not causation.
But there was once a time, not long ago when bonds and stocks
traded together, not inverse to each other, as they do today.
The switch occurred gradually, but was in full force by the
late-90s. Many say this followed the collapse of Japan's real
estate bubble in 1990 and this is what may have caused the polarity
switch. Google it.
And so, perhaps it's no longer correct to blame/credit
government surplus and deficit spending for inflation?
A fair question that may be answered in a few years.
Deflation only has to do with money supply(shrinking and that
has not happened since 1929) Ben has his foot on the gas and is
printing more money in the last three years than was printed in the
last 20 years...gold's not rallying for supply and demand reasons
or lack of inflation. Stocks go down and that causes the
bonds to rally which lowers interest rates yields which means
inflation isn't going up and that hurts gold.
appreciate your input but clearly we went to different MBA
schools. your view is quite different than that is accepted
and understood by the educated economic community
What is the definition of Deflation.....A persistent decrease in
the level of consumer prices or a persistent increase in the
purchasing power of money because of a reduction in available
currency and credit. Is there a shortage of money or credit
now....? Who is there community that you speak of....The Fed
An intellectual debate! How exciting. There is also a problem of
perspective that may be affecting all of us. There is a point of
view (ironic) that holds those within a financial bubble are unable
to see it for what it is, due to their frame of reference being
distorted by the bubble. In other words, if everything is
distorted, then
nothingwill appear
distorted to some one inside the twisted universe. This is where
purchasing power parity, currency exchange rates, and the Big Mac
index come into the discussion. Google them. Still interested? Then
update us all here at BPT and let's figure out together where gold
is going next!
The Fed keeps selling the idea that there is none....but
everything including the Big Mac keep going up in price or smaller
in size (good for the waistline)....Matt said it tonight...it has
been sitting here and is going to break one way or the other....the
long term trend line still has not been hit and although I am long
here this could still be bottoming and lower price could easily
happen. There is no shortage of gold. But there does
seem to be a shortage of buying of it....alot of hedgies sold,
India is clamping down on purchasing of it due to there Ruppie
problem. China may slow down there buying because there real
estate problems could start to pop that bubble. The only
thing that is going to get gold really going is INFLATION.....
GDX and miners unable to rally of late even when Gold was up Friday. Gold must hold 1320. Thoughts would be appreciated.
Posted by rbreese on 30th of Sep 2013 at 01:55 pm
Curtailing gov't spending only adds
Posted by steve on 30th of Sep 2013 at 02:02 pm
Curtailing gov't spending only adds to deflationary pressures..
Deflation???
Posted by ronjuan on 30th of Sep 2013 at 03:09 pm
With the government rapidly printing money at its current pace....I find it hard to believe we could have deflation....
There is a very real
Posted by cubby on 30th of Sep 2013 at 08:31 pm
There is a very real possibility that the government spending is what's CAUSINGthe deflation.
Now to be fair, correlation is not causation.
But there was once a time, not long ago when bonds and stocks traded together, not inverse to each other, as they do today.
The switch occurred gradually, but was in full force by the late-90s. Many say this followed the collapse of Japan's real estate bubble in 1990 and this is what may have caused the polarity switch. Google it.
And so, perhaps it's no longer correct to blame/credit government surplus and deficit spending for inflation?
A fair question that may be answered in a few years.
Gold not rallying is not deflation
Posted by ronjuan on 1st of Oct 2013 at 12:00 am
Deflation only has to do with money supply(shrinking and that has not happened since 1929) Ben has his foot on the gas and is printing more money in the last three years than was printed in the last 20 years...gold's not rallying for supply and demand reasons or lack of inflation. Stocks go down and that causes the bonds to rally which lowers interest rates yields which means inflation isn't going up and that hurts gold.
appreciate your input but clearly
Posted by muslhead on 1st of Oct 2013 at 12:15 am
appreciate your input but clearly we went to different MBA schools. your view is quite different than that is accepted and understood by the educated economic community
Really....
Posted by ronjuan on 1st of Oct 2013 at 12:27 am
What is the definition of Deflation.....A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit. Is there a shortage of money or credit now....? Who is there community that you speak of....The Fed
An intellectual debate! How exciting.
Posted by cubby on 1st of Oct 2013 at 01:12 am
An intellectual debate! How exciting. There is also a problem of perspective that may be affecting all of us. There is a point of view (ironic) that holds those within a financial bubble are unable to see it for what it is, due to their frame of reference being distorted by the bubble. In other words, if everything is distorted, then nothingwill appear distorted to some one inside the twisted universe. This is where purchasing power parity, currency exchange rates, and the Big Mac index come into the discussion. Google them. Still interested? Then update us all here at BPT and let's figure out together where gold is going next!
We need some inflation for gold to really go....
Posted by ronjuan on 1st of Oct 2013 at 01:26 am
The Fed keeps selling the idea that there is none....but everything including the Big Mac keep going up in price or smaller in size (good for the waistline)....Matt said it tonight...it has been sitting here and is going to break one way or the other....the long term trend line still has not been hit and although I am long here this could still be bottoming and lower price could easily happen. There is no shortage of gold. But there does seem to be a shortage of buying of it....alot of hedgies sold, India is clamping down on purchasing of it due to there Ruppie problem. China may slow down there buying because there real estate problems could start to pop that bubble. The only thing that is going to get gold really going is INFLATION.....
spot the tail wagging the dog
Posted by cubby on 1st of Oct 2013 at 02:12 am
(Yes, for those with good memories, this phrase has an ironic & salacious meaning)
This is an economic riddle. Where is the deflation coming from today, recently?
As always, for full credit you must explain your answer. Link to chart