aedens wrote:Inflation is a policy — a deliberate policy of people who resort to inflation because they consider it to be a lesser evil than unemployment. But the fact is that, in the not very long run, inflation does not cure unemployment.
I've heard 2 schools of thought on this. The first is that inflation is a policy of government - that governments can create inflation at will under any conditions. The second is that governments cannot create inflation at will under all conditions - that the market is bigger than government. I have presented here a third school of thought. When the government becomes bigger than the market - as it is now - and overwhelms a market that is seeking deflation as a natural outcome, then the result will be neither inflation or deflation, but rather a chaotic collapse.
That's an intriguing insight in regards to your "chaotic-collapse theory," Higgs. Just curious — how do you see such a chaotic collapse playing out? Maybe a tug-of-war between deflation and high levels of inflation, with eventual problems not so much with the currency as a store of value, but as a measure of value, perhaps? Just curious here —Regards, Marc
Marc wrote:That's an intriguing insight in regards to your "chaotic-collapse theory," Higgs. Just curious — how do you see such a chaotic collapse playing out? Maybe a tug-of-war between deflation and high levels of inflation, with eventual problems not so much with the currency as a store of value, but as a measure of value, perhaps? Just curious here —Regards, Marc
I think that's a good way to put it, Marc. All the details would flow from your summary.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
Thanks, Higgs, for the affirmation here. Indeed, my theories on this seem to parallel yours on this matter (And yes, for all the discussions regarding investing, this can provide direction to that, too!) Thanks again. —Regards, Marc
Higgenbotham wrote:The next point in this series was today (February 8), as the stock market closed on yet another high, though this time it struggled to reach it.
The next point in the series after today is in 4 days. The series will reach its limit 4 days after that.
The series reached its limit on February 16. The stock market made yet another new high today.
I see the market doing almost exactly what it did in 2007. If so, this should have a little bit to go to finish the trend up, then get choppy, so long as they can keep everyone dancing to the music. Meanwhile, there was some ongoing deflation in copper and silver today but that didn't deter the stock market.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
I looked at copper today also. Also noted over 37 million will retire over tens years and the percentage to private
workers and the roc to new spending per capita per new employee will wipe the private net working capital out.
We have less than 520 weeks then... http://www.opm.gov/policy-data-oversigh ... ince-1962/ plus 800,000 defense industry workers from the feds own mouth.
Last edited by aedens on Wed Feb 20, 2013 3:24 am, edited 5 times in total.
The last time I can recall copper moving down 5-10 cents the same day stocks ran up toward a new high was May 3, 2010 and we know what happened after that. Though I will say that overall copper is less off its high than it was then. However, the stock market is also about 300 S&P points higher than it was in May 2010.
I'm still holding 100% short because even if it goes higher we're closer to the end than the beginning at this point.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
The relationship isn’t perfect but it’s held up fairly well over the past 15 years or so. The same dynamic seems at work in the 15 years before that, but I think the ratios are different.
In effect, gold acts like a highly-leveraged short position in U.S. Treasury bills and the breakeven point is 2% (or more precisely, a short on short-term TIPs). http://www.crossingwallstreet.com/archi ... -gold.html
;- )
Last edited by aedens on Thu Feb 21, 2013 1:20 am, edited 3 times in total.
—Regards, Marc
(And yes, for all the discussions regarding investing, this can provide direction to that, too!) Thanks again. —Regards, Marc