Jump to content
House Price Crash Forum
Guest_ringledman_*

Deflationists. You Given Up?

Recommended Posts

Deflationists,

Huge inflation in the system despite the largest credit crunch for a long time.

If you measure inflation in real terms, i.e. the real inflation rate affecting people ojn the street minus the BoE rate then we live in a hugely inflationary world.

I reckon when you adjust the CPI/RPI for everything that goes up which central control likes to ignore then we are talking about 7-8%.

Minus the base rate of 0.5% and we have a significatly high real inflation rate.

Likewise the largest credit crunch for decades and in real terms property is only 10-15% down nominally some 2 years later. This for an asset class that is a good 50% overvalued on a valuation measure.

So the question -

Deflationists you must now realise we live in a hugely inflationary world?

I guess by the shortage of deflation threads recently you are starting to agree?....

Share this post


Link to post
Share on other sites

Deflationists,

Huge inflation in the system despite the largest credit crunch for a long time.

If you measure inflation in real terms, i.e. the real inflation rate affecting people ojn the street minus the BoE rate then we live in a hugely inflationary world.

I reckon when you adjust the CPI/RPI for everything that goes up which central control likes to ignore then we are talking about 7-8%.

Minus the base rate of 0.5% and we have a significatly high real inflation rate.

Likewise the largest credit crunch for decades and in real terms property is only 10-15% down nominally some 2 years later. This for an asset class that is a good 50% overvalued on a valuation measure.

So the question -

Deflationists you must now realise we live in a hugely inflationary world?

I guess by the shortage of deflation threads recently you are starting to agree?....

err no, the shortage of deflation threads and the certainty of inflation threads and fiats worthlessness is exactly what i want to see before a massive asset deflation. If this site was full of deflation threads and Dow 1000 (sort of like 18 months ago), id probably be filling my boots with equities

Are you Realistbear in disguise? he normally comes out with these sort of contra indicator posts

Edited by Tamara De Lempicka

Share this post


Link to post
Share on other sites

I've always been more of an inflationist but now I consider a deep prolonged recession more likely I think in this case deflation is the name of game. Also M4 is contracting again isn't it?

Could go either way. (maybe I should be on the MPC with fence sitting like that?!)

House price deflation a dead cert though IMO.

Share this post


Link to post
Share on other sites

Biflation anyone?

Biflation (sometimes mixflation) is a state of the economy where the processes of inflation and deflation occur simultaneously.[1] The term was first introduced by Dr. F. Osborne Brown, a Senior Financial Analyst for the Phoenix Investment Group.[2] During Biflation, there's a rise in the price of commodity/earnings-based assets (inflation) and a simultaneous fall in the price of debt-based assets (deflation).[3]

The price of all assets are based on the demand for them versus the volume of money in circulation to buy them.

With biflation on the one hand, the economy is fueled by an over-abundance of money injected into the economy by central banks. Since most essential commodity-based assets (food, energy, clothing) remain in high demand, the price for them rises due to the increased volume of money chasing them. The increasing costs to purchase these essential assets is the price-inflationary arm of Biflation.[4]

With biflation on the other hand, the economy is tempered by increasing unemployment and decreasing purchasing power. As a result, a greater amount of money is directed toward buying essential items and directed away from buying non-essential items. Debt-based assets (mega-houses, high-end automobiles and stocks) become less essential and increasingly fall into lower demand. As a result, the prices for them fall due to the decreased volume of money chasing them. The decreasing costs to purchase these non-essential assets is the price-deflationary arm of biflation.

http://en.wikipedia.org/wiki/Biflation

Ohhh yeah, this.

Edited by Pent Up

Share this post


Link to post
Share on other sites

Deflation is here, in terms of money supply. It's mild now, showing up firstly in large value assets (like housing) but it's going to work it's way all through the system in due course. This will oscillate to varying degrees over time in different countries, but eventually it will hit everybody, including China.

Share this post


Link to post
Share on other sites

Currency war, QE2, 98% dollar bears, 97% gold bulls, 95% silver bulls, China booming. This is what the market screams to you everyday. We are hitting extremes. I could see gold and silver go for a massive spike and than fall back like a ton of bricks. I think the big turn in markets is coming soon. Credit Crunch 2 will be unstoppable, it will be so big it can not be bailed out.

Share this post


Link to post
Share on other sites

I am not an inflationist or a deflationist. I am saving cash with the plan that in a few years I may decide to buy a house in cash. because that is what they are bought in. Then again I may not.

Deflation ? Good for this.

Minor inflation ? Good for this.

Major inflation ? Good for this.

Hyperinflation ? Bad for this.

I am not too bothered about #4. If it happens it happens. And if I was to take the normal option of putting 10% of my savings in PM's ? I would not be too chuffed if it all went teets up. I don't have enough money saved to make that 10% make a huge difference.

If I had to put that cash into something pending a hyperinflationary meltdown ? i would probably buy myself a serious collection of arms and ammo. Would no doubt be far more useful than a pile of shiny metal.

So anyway - I am not worried about that so no point stressing. As long as we don't get hyperinflation I am quids in. House prices are toast. If the £ is toast too ? I don't really give a ******. I will use my worthless £ to buy a worthless UK house.

Share this post


Link to post
Share on other sites

we already had the inflation. Haven't you noticed? There was too much money and prices shot up. That money wasn't actually real. Add the massive input of cheap labour to the equation and you still think inflation is what we face? The boe is right to say we are facing deflation. They are wrong to try and fight it. It is the cure.

Share this post


Link to post
Share on other sites

Deflationists,

Huge inflation in the system despite the largest credit crunch for a long time.

If you measure inflation in real terms, i.e. the real inflation rate affecting people ojn the street minus the BoE rate then we live in a hugely inflationary world.

I reckon when you adjust the CPI/RPI for everything that goes up which central control likes to ignore then we are talking about 7-8%.

Minus the base rate of 0.5% and we have a significatly high real inflation rate.

Likewise the largest credit crunch for decades and in real terms property is only 10-15% down nominally some 2 years later. This for an asset class that is a good 50% overvalued on a valuation measure.

So the question -

Deflationists you must now realise we live in a hugely inflationary world?

I guess by the shortage of deflation threads recently you are starting to agree?....

You cannot have inflation if spending power is static or reduced.?

Share this post


Link to post
Share on other sites

we already had the inflation. Haven't you noticed? There was too much money and prices shot up. That money wasn't actually real. Add the massive input of cheap labour to the equation and you still think inflation is what we face? The boe is right to say we are facing deflation. They are wrong to try and fight it. It is the cure.

Yes, we know that we face deflation as the natural result of the crazy credit boom but what we are going to actually get is inflation thanks to Central Bank policies.

Deflation is death to banks and indebted governments, as long as money can be manufactured out of thin air and pumped into the system there can only be one outcome. We'll see biflation on the way there as the money makes its way into some parts of the economy long before others but eventually it will flood all parts of the system.

For those looking to buy a house there will be a window of house prices deflating strongly before generalised strong inflation takes hold across the board.

Share this post


Link to post
Share on other sites

Yes, we know that we face deflation as the natural result of the crazy credit boom but what we are going to actually get is inflation thanks to Central Bank policies.

Deflation is death to banks and indebted governments, as long as money can be manufactured out of thin air and pumped into the system there can only be one outcome. We'll see biflation on the way there as the money makes its way into some parts of the economy long before others but eventually it will flood all parts of the system.

For those looking to buy a house there will be a window of house prices deflating strongly before generalised strong inflation takes hold across the board.

This is what I was wondering, would that not be a killer move? To buy cheap and have your debts inflated away (asuming wages matched inflation (yeah I know))

Edited by Stickleback

Share this post


Link to post
Share on other sites

Yes, we know that we face deflation as the natural result of the crazy credit boom but what we are going to actually get is inflation thanks to Central Bank policies.

Deflation is death to banks and indebted governments, as long as money can be manufactured out of thin air and pumped into the system there can only be one outcome. We'll see biflation on the way there as the money makes its way into some parts of the economy long before others but eventually it will flood all parts of the system.

For those looking to buy a house there will be a window of house prices deflating strongly before generalised strong inflation takes hold across the board.

Great post.

Deflation is the correct and right course. How can lower costs not be good for society?

Inflation is the outcome we have and will continue to have due to inept public sector politicians running the worlds economies.

In such circumstances its best to get on the right side of the trend.

Share this post


Link to post
Share on other sites

Are you Realistbear in disguise? he normally comes out with these sort of contra indicator posts

Just testing the water.

The near term deflation talk on here peaked a couple of months back and corresponded with the recent bottom in equities and commodities. Previous to this deflation was all the rage back in early 09 when the uber bears talked their typical dow 2000 BS.

When you turn bullish is when I will sell up my equities and commodites :D

Share this post


Link to post
Share on other sites

Yes, we know that we face deflation as the natural result of the crazy credit boom but what we are going to actually get is inflation thanks to Central Bank policies.

Deflation is death to banks and indebted governments, as long as money can be manufactured out of thin air and pumped into the system there can only be one outcome. We'll see biflation on the way there as the money makes its way into some parts of the economy long before others but eventually it will flood all parts of the system.

For those looking to buy a house there will be a window of house prices deflating strongly before generalised strong inflation takes hold across the board.

I know that's what they want to do because that's what they've always been able to do. This time is different. We have had a game changing event in the last 20 years or so. That massive input of cheap labour into the world economy would naturally bring aboiut deflation. It did but not as much as it should have.

The massive increase in supply capacity of just about everything also brought about deflation but not as much as it should have.

To artificially stimulate demand, cheap money was hosed over the west. That wasn't a QE type few hunderd billion. That was trillions and trillions of "bank credits" pushed into our greedy little paws. The narrowband focus on price inflation the west was following meant the money had to be fed into the system through the mortgage market. Prices shot up, mewing allowed portion of the cash to enter the general population but small change really. The flow to the banks through securitising those mortgages meant all that lovely lolly found it's way into the equity markets.

See attached chart of the DOW from 1928 - it starts at 252 in 1928, it doesn't stay over a 1000 until the mid 80's, the 80's bubble bursts and it does't stay over 2000 until the start of the 90's (doubles in 5 years - it has started). It doubles again by 95 and again by 98 to 8000. Within 10 years it has quardupled - do you remember anything happening in the world at this time? It was aiming for another 5 year doubling when it came off the rails in 2007 - it peaked at just shy of 14000 at the start of October (what a great October that was, one for the scrapbook!).

From it's merchantalist perspective, China had to sell us stuff to make the money it needed to grow. Our demand was insufficent to meet their supply so they started to lend us money to buy their stuff. No-one seems to mind that they were printing money into existence over a decade ago to lend to us so we could buy their stuff. Now the rest of SE Asia and India have come into play, their is an over abundant supply of cheap labour and an ongoing massive over capacity problem. We can now make far far more than the west can consume.

It's been like that fat guy in "The Meaning of Life" and we've had that "one little wafer" too many. Pouring more money in won't work. It just means someone has to come along and clean up the mess.

Don't forget,cuirrencies are relative. If we print more, the other guys will just adjust theirs accordingly.

post-13143-098752000 1286700483_thumb.png

post-13143-098752000 1286700483_thumb.png

Share this post


Link to post
Share on other sites

Just testing the water.

The near term deflation talk on here peaked a couple of months back and corresponded with the recent bottom in equities and commodities. Previous to this deflation was all the rage back in early 09 when the uber bears talked their typical dow 2000 BS.

When you turn bullish is when I will sell up my equities and commodites :D

you are a bit behind the times, ive been mostly bullish since i found this site and remain so at this point, its why my status remains neutral, youll know when im bearish , my status will say so :D

Edited by Tamara De Lempicka

Share this post


Link to post
Share on other sites

Inflationists...

WTF do you think THEY are fighting against?

if only they had listened to ANCIENT advice:

Sun-tzu: If your enemy(deflation) is superior, evade him. If angry, irritate him. If equally matched, fight, and if not split and reevaluate.

Share this post


Link to post
Share on other sites

Cost-push inflation on essential goods, deflation generally (salaries, spending power, money in actual circulation) is my prediction. Unless of course intervention from the state changes that.

Share this post


Link to post
Share on other sites

Cost-push inflation on essential goods, deflation generally (salaries, spending power, money in actual circulation) is my prediction. Unless of course intervention from the state changes that.

yep, a classic AUSTRIAN BUST.....biflation.....stagflation...ALL EXPLAINED..

take an hour with this guy....

http://video.google.com/videoplay?docid=-2382683217626362775&q=krassimir+petrov#

32 minutes in, the reason for Biflation and how it occurs is explained.

stunning video, from 3 years ago...you can SEE what they are doing in exact opposition to combat the effects....near the end of the video, he goes on to explain how governments will react....and bearing in mind this was 3 years ago...and its not a new theory anyway....what THEY have done is predicted just about perfectly.

sadly, the results of this action by governments and central banks is also explained and predicted.

Edited by Bloo Loo

Share this post


Link to post
Share on other sites

Currency war, QE2, 98% dollar bears, 97% gold bulls, 95% silver bulls, China booming. This is what the market screams to you everyday. We are hitting extremes. ]I could see gold and silver go for a massive spike and than fall back like a ton of bricks.

Would'nt they just fall like a ton of gold? (or silver?)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.