Roger Bootle Thinks Deflation Is Coming

[The Masked Tulip]

Does not think a double dip recession is likely, reckons deflation is coming though - most certainly for the Eurozone...

Was just on Jeff Randal on Sky.

[Frank Hovis]

Does not think a double dip recession is likely, reckons deflation is coming though - most certainly for the Eurozone...

Was just on Jeff Randal on Sky.

Bootle swings between spot on and entirely wrong. I used to read him every week in the mid 90s when he was spot on.

What does he mean though? I go with asset deflation and commodity inflation.

[scepticus]

bootle is right, blanchflower is right, RB is right, deflation IS coming.

there won't be any commodity ongoing inflation, at least not within the current monetary system.

and no, CBs won't print the gap. They only printed the gap in response to a very sudden shock. Even the japanese didn't print the gap - they just ramped up their public debt and ramped up exports of goods and capital so they could get by on the borrowing of others.

The UK can't win the race to the bottom ad infinitum. The asians fear euro deval more than dollar deval.

Long term there are but two options: general collapse, or negative nominal rates. The riksbank move in 2009 was a canary for the latter strategy (the riksbank governer is a long time academic pal of bernanke). Expect to hear a lot more about this next weapon in the monetary policy arsenal over the next year. Onside with NNR, we have the riksbank, Fed and BoJ. Convinced, but waiting to show their hand is the BoE. Still to be convinced we have the ECB and chinese.

And remember, a NNR does not necessarily mean a negative real rate.

[Um_Bongo]

Deflation will rip the world apart - it wont happen.

[Um_Bongo]

Deflation increases the value of the crap in your wallet - that wont happen either.

[plummet expert]

Bootle swings between spot on and entirely wrong. I used to read him every week in the mid 90s when he was spot on.

What does he mean though? I go with asset deflation and commodity inflation.

Commodities are an asset! Use your loaf Hovis! If you mean property is set to fall hard and hard assets such as gold and silver will rise, then you are spot on.

[Injin]

bootle is right, blanchflower is right, RB is right, deflation IS coming.

there won't be any commodity ongoing inflation, at least not within the current monetary system.

and no, CBs won't print the gap. They only printed the gap in response to a very sudden shock. Even the japanese didn't print the gap - they just ramped up their public debt and ramped up exports of goods and capital so they could get by on the borrowing of others.

The UK can't win the race to the bottom ad infinitum. The asians fear euro deval more than dollar deval.

Long term there are but two options: general collapse, or negative nominal rates. The riksbank move in 2009 was a canary for the latter strategy (the riksbank governer is a long time academic pal of bernanke). Expect to hear a lot more about this next weapon in the monetary policy arsenal over the next year. Onside with NNR, we have the riksbank, Fed and BoJ. Convinced, but waiting to show their hand is the BoE. Still to be convinced we have the ECB and chinese.

And remember, a NNR does not necessarily mean a negative real rate.

They already hyperinflated.

[lowrentyieldmakessense(honest!)]

bootle is right, blanchflower is right, RB is right, deflation IS coming.

there won't be any commodity ongoing inflation, at least not within the current monetary system.

and no, CBs won't print the gap. They only printed the gap in response to a very sudden shock. Even the japanese didn't print the gap - they just ramped up their public debt and ramped up exports of goods and capital so they could get by on the borrowing of others.

The UK can't win the race to the bottom ad infinitum. The asians fear euro deval more than dollar deval.

Long term there are but two options: general collapse, or negative nominal rates. The riksbank move in 2009 was a canary for the latter strategy (the riksbank governer is a long time academic pal of bernanke). Expect to hear a lot more about this next weapon in the monetary policy arsenal over the next year. Onside with NNR, we have the riksbank, Fed and BoJ. Convinced, but waiting to show their hand is the BoE. Still to be convinced we have the ECB and chinese.

And remember, a NNR does not necessarily mean a negative real rate.

is someone paying you to post this shit

an economist who is also well read in history

link

# However, last year Economist Gregory Mankiw articulated the position which according to Faber essentially echoes that of Fed #2 Janet Yellen and pervades much of the Fed generally, that “The problem is that people are saving money instead of spending, and we have to get the bastards spending to keep the economy going,” so the key is to inflate the money supply at something like 6% per annum

# Thus, Faber says “As far as I’m concerned, the Federal Reserve will keep interest rates at 0, precisely 0…in real terms”

# As such, cash and longterm bonds will be a bad place to hold one’s money; equities are an avenue to preserve wealth (but this is a risky proposition, given the effects of rampant currency depreciation); precious metals are a sound place for wealth preservation

# As for the US being the most important economy for the world, there is a sea change going on right now; recently car sales in emerging economies (such as Brazil, China) are outpacing those of the US, Europe and Japan; oil consumption in emerging markets is increasing, while in the developed world it is contracting; the whole world does not depend on American consumption anymore – 60% of total exports are now going to the emerging world when one includes E. Europe; the US is still a large economy but it is not growing, while the growth in the emerging world is and will continue to be strong

Edited May 25, 2010 by lowrentyieldmakessense(honest!)

[Frank Hovis]

Commodities are an asset! Use your loaf Hovis! If you mean property is set to fall hard and hard assets such as gold and silver will rise, then you are spot on.

See, you knew what I meant.

[scepticus]

They already hyperinflated.

when I see it in prices I'll believe you, until then, nope.

[lowrentyieldmakessense(honest!)]

freedom brings prosperity

dishonest money brings destruction

link

I call the people who benefit from the printing of money and easing of credit the paper aristocracy. The paper aristocracy always wants more paper money and is trying at all times and in all countries to urge the central bank to issue more money. To accomplish this, there has to be a continuous series of crises (real or imagined) to serve as an excuse.

So behind the Greek protestors are the paper aristocracies of the world stirring up the media into a hysteria. The paper money Trichet is now issuing will raise prices throughout Europe, including Greece, and the Greek protestors, instead of getting richer (as they think) will get poorer (in real terms). Trichet's claim that he will sterilize the money he is now creating is a standard central bank lie. I have heard that promise many times, but I have never seen it kept.

That is what is going on in the world today: a group of stupid and venal people who think they can get something for nothing by throwing a tantrum and acting like children and a group of sophisticated and shadowy rich people who manipulate these fools behind the scenes and use them to steal from the ordinary people of our time.

This may be the end of the attempt to make the euro into a semi-sound money, which started so auspiciously a decade ago. The idea of a paper currency bound down by rules now appears as a failure. The only money which has prevented the depreciation of the currency in world history is gold or silver, and this is the only system which has brought prosperity to mankind.

[scepticus]

Are you seriously suggesting that if I put a wad of Her Majesty's finest paper in my safe it'll become more valuable with the passage of time?

at least for now, yes.

[scepticus]

freedom brings prosperity

dishonest money brings destruction

link

and all your posts bring sigs even more bloated than central bank balance sheets. When are we going to see a deflation in your sig size? Thats what I want to know.

[lowrentyieldmakessense(honest!)]

when I see it in prices I'll believe you, until then, nope.

when you see it in prices it will be too late to do anything about it

[lowrentyieldmakessense(honest!)]

and all your posts bring sigs even more bloated than central bank balance sheets. When are we going to see a deflation in your sig size? Thats what I want to know.

switch it off

edit - i will deflate the size of my signature when i see the paper £ increasing in value against food and energy for four continuous months

edit again as my spelltype is a bad as injins

Edited May 25, 2010 by lowrentyieldmakessense(honest!)

[plummet expert]

Does not think a double dip recession is likely, reckons deflation is coming though - most certainly for the Eurozone...

Was just on Jeff Randal on Sky.

Roger BOOTLE has often been right in the past, but I don't think his calls on the current crisis have worked out. Deflation it may appear to be at first, but my tip is inflation will take hold making it stagflation. Before that the markets are looking like they want to have a new rollercoaster down hill. The graphs looks so similar from 1929 to 1931 when comapared to now it is quite shocking. Same for house price with blip upwarsd before harsh fall in 1989-1991 - identical graph shape so far. The big HPC is on the way. Cause - sovereign debt crisis decimating markets and currencies.

[Injin]

when I see it in prices I'll believe you, until then, nope.

Can say exactly the same for deflation.

And we both know it's irrelevent to the money supply.

[Injin]

and all your posts bring sigs even more bloated than central bank balance sheets. When are we going to see a deflation in your sig size? Thats what I want to know.

****** me.

[winkie]

Deflation now and then inflation....any inflation we see now is manufactured, the real underlying pressure for now is deflation....taxes will level it out, QE will peter out...too dangerous to continue...on balance we are living deflation.

[Um_Bongo]

It is impossible for the value of money to increase whilst the people in charge of said money treat it with utter contempt.

[LJAR]

Decreasing asset prices do not make deflation. Most assets depreciate anyway.

We didn't have deflation in the last time share prices slumped or the last time houses crashed, or after any of the recessions since we left the gold standard.