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Displaying (2) Comments | Comment on this piece | Report objectionable art
Inflation? How? With what?To get inflation, you must have excses demand over production. That is not an opinion it is a mathematical fact.Where is this excses demand going to originate? What asset can become encumbered (that isn't already) to goose the system with cash to cause this?The USD is tanking (not this week) because The FED is artificially propping up the bond market, depressing interest rates below their equilibrium level with risk and causing capital flight. This only lasts as long as he can bid the market, and every piece of trash he buys, he further jeopardizes his own balance sheet.As the bid disappears (not necessarily the FED's bid), prices drop and interest rates rise to match the level of risk. This makes USD investments more attractive and increases capital flows into the US.We are just watching the FED and TREAS take on debt to buy old debt. When that game stops, interest rates rise and we get deflation as asset values drop and defaults blow out.If anyone thinks the hucksters selling gold on the AM radio are any different than the hucksters selling mortgage refis in 2006, you need to rethink your position. Prices don't go up beyond people's ability to pay. Bainbridgeislanddreamhomes found their top as people couldn't afford to pay more than 12x income. As gold goes up in price, fewer and fewer people can bid. Sure, prices go up on declining volume, and that is the FIRST sign you look for when trying to grope for a top. As volume drops off, the trade becomes lopsided and all the buyers are in, leaving only sellers with the means to participate in the market. The trade tips over and the sellers overwhelm the bid, increasing volume and ratifying the price trend (down).Don't confuse the banks playing at the casino with your money as inflation.' They are trying to sucker you into taking their assets because they know that the short dollars/long assets trade is behind us, and the short assets/long dollars trade is where they want to be. They need you to buy their assets at peak prices. Rate this comment: 0 0
By: | Sep 27, 2013 | Report Comment
For the love of God, keep wrtinig these articles.
By: | Oct 06, 2011 | Report Comment
Growing
noahsart
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