To Followers Of The Mad Martin Armstrong

[Killer Bunny]

It's your money

http://armstrongeconomics.com/2014/05/16/interest-rates-2/

So deflation will make people put money into real estate. Just like Japan, eh Martin.

Notice you can't leave a comment on his site and if, previously, you did and it disagreed with him he NEVER replied

[Neverwhere]

Notice you can't leave a comment on his site and if, previously, you did and it disagreed with him he NEVER replied

Seems like you got your reply from him after all

[renting til I die]

Notice you can't leave a comment on his site and if, previously, you did and it disagreed with him he NEVER replied

So, really just a waste of time reading him then?

[Executive Sadman]

negative interest rates...i'll believe that when i see it.

[200p]

We will not merely see low-interest rates, we will see NEGATIVE interest rates as well. Welcome to the Spiral of Deflation where pretty much the only thing that rises historically has been the off-the-grid tangible assets. That will be stocks, real estate, collectibles, etc.

Well I think it is worth keeping an eye on the Times Rich List and see who's doing well year after year, year after year, and try to follow suite - but of course not to put all your eggs into one basket. Not one person on the Times Rich List (well at the top anyway) got there by putting all their money into a bank account and hoping for Armageddon.

[R K]

Couldn't care less about Martin Armstrong, but that's what is currently happening and no particular reason to suppose it won't continue.

When we (at some point) get to the end of this current business cycle / credit cycle looks to be when the fun really starts.

Whether we get the equity (and real asset) bubble before then or when we go NIRP is hard to say. It's quite possible we get the equity bubble at least over the next couple of years, and the London housing market at least doesn't appear to be waiting........

The hyperinflation / imminent double digit rates brigade from 2008/9 seem to have gone very quiet for the last 5 years in any event.

[TheCountOfNowhere]

How does deflation fit in with rising asset prices?

[TheCountOfNowhere]

We will not merely see low-interest rates, we will see NEGATIVE interest rates as well. Welcome to the Spiral of Deflation where pretty much the only thing that rises historically has been the off-the-grid tangible assets. That will be stocks, real estate, collectibles, etc.

Well I think it is worth keeping an eye on the Times Rich List and see who's doing well year after year, year after year, and try to follow suite - but of course not to put all your eggs into one basket. Not one person on the Times Rich List (well at the top anyway) got there by putting all their money into a bank account and hoping for Armageddon.

Plenty have lost it all investing in investments promising exponential returns.

[zugzwang]

Abenomics is what comes next. QE on steroids, NGDP targeting, maybe a formal peg on the gilt yields.

When that fails we get a hyperinflationary default.

[TheCountOfNowhere]

Abenomics is what comes next. QE on steroids, NGDP targeting, maybe a formal peg on the gilt yields.

When that fails we get a hyperinflationary default.

Looking at the news today I think we get a collapsed housing market next, followed by a lot of repossessions, real cuts and poverty.

We should all be careful what we wish for.

Can anyone explain how the above deflation results in asset prices going up, go on, someone must know ?

Edited May 19, 2014 by TheCountOfNowhere

[Justonemore]

It's your money

http://armstrongeconomics.com/2014/05/16/interest-rates-2/

So deflation will make people put money into real estate. Just like Japan, eh Martin.

Notice you can't leave a comment on his site and if, previously, you did and it disagreed with him he NEVER replied

I still find what he has to say interesting. From what he is saying, my understanding is that during the deflationary period, governments will go on a rampant tax hunt (the EUs proposal of a 1 off super tax does not fill me with joy). With our ruling class doing everything possible to tout real estate i can see his reasoning.

[TheCountOfNowhere]

I still find what he has to say interesting. From what he is saying, my understanding is that during the deflationary period, governments will go on a rampant tax hunt (the EUs proposal of a 1 off super tax does not fill me with joy). With our ruling class doing everything possible to tout real estate i can see his reasoning.

So they will put all their money into assets to avoid tax...ok, I get that, seems sensible. However, last time I looked, houses were fairly easily traceable.

[Justonemore]

So they will put all their money into assets to avoid tax...ok, I get that, seems sensible. However, last time I looked, houses were fairly easily traceable.

Yes , im just trying to understand why he would say that money would go into property. I do like a lot of what he says , it seems to make some sense to me.

His general view seems to be that governments are going to go balls out on Taxation and pretty much help themselves peoples savings in anyway possible (i do remember reading one quote from the ECB (i think) calling savings a surplus) - i definitely can see some of this happening. So in that sense i can see money going into assets, property included. However he does contradict, as i read the other week that people would save more due to the proposal of increased taxation and the call for more printing.

My worry is what the end game will be. Armstrong believes that there will be a new currency - hence again a jump into assets, though i couldn't fully make out what he feels this would do to the stock market. I might be wrong, but i got the impression that he feels this would in some way remain intact.

All pretty gutting really - i just want something close to what i perceive as a normal life.

[cuddlybear]

He argues elsewhere real estate is subject to a 78-year cycle, 52 years broadly up (peaking in 2007) and 26 years down to 2033, counter-trend rally 2012 to 2015. So far that prediction is looking ok. He also comments that this is going to be more stagnation than a massive collapse.

So I think he is talking here about specific pockets of high-end real estate going up as a store of wealth. Again you could argue that is being seen in London and elsewhere around the world.

As with all of Martin Armstrong's stuff, it is so poorly written it is very difficult to understand

[warpig]

Suggesting deflation directly causes house prices to go up, is like saying the only reason we have murderers is because people have children. Technically true, but you're missing the chain that joins the 2 end links together.

Yes he's talking about people who have far more wealth than anyone on this website and yes he's talking about high end real estate, fine art and any other high-grade tangible asset you can sink some cash in to. Draconian taxation and bail-ins will prove him correct. I think he's right on the money, he was the only one who called the correction in gold exactly as it happened, to the best of my knowledge no one else called it with such precision. He certainly has my ear.

It's interesting his gold report has been delay since January and his recent call for $5K gold in the next 5.5 years. Personally I think he's playing it safe, as so many reputations have been damaged by poor forecasts and I can only conclude the delay in releasing his gold report is because of his uncertainty.

[warpig]

This is a recent interview:

[byron78]

How is real-estate off the grid exactly?

Not easy to hide or move.

[warpig]

The government can't force you to sell your house to pay for their deficit, it's technically out of reach.

How is real-estate off the grid exactly?

Not easy to hide or move.

[byron78]

The government can't force you to sell your house to pay for their deficit, it's technically out of reach.

Not from the taxman it's not.

[warpig]

You're talking about tax owed to the government, he isn't. He's talking about taking cash out of the reach of the government, so they can't use it to bail-in the banks.

Not from the taxman it's not.

[Neverwhere]

You're talking about tax owed to the government, he isn't. He's talking about taking cash out of the reach of the government, so they can't use it to bail-in the banks.

So only effective if the property doesn't have any debt secured against it then (i.e. not effective at all for most buyers).

Edited May 20, 2014 by Lo-fi

[warpig]

I think it's fair to assume if someone has a mortgage on a property they're probably not cash rich. My personal opinion is the effect is indistinguishable from the Cantillon effect, but for the majority of us, house prices will fall as [funds|availability] are withdrawn from the market.

So only effective if the property doesn't have any debt secured against it then (i.e. not effective at all for most buyers).

[byron78]

You're talking about tax owed to the government, he isn't. He's talking about taking cash out of the reach of the government, so they can't use it to bail-in the banks.

I get that, but what's to stop them imposing a high tax to take from the property (if not taking the property directly) that both costs the home-owner and also plunges the value of the asset? That could simply be a raise in interest rates being as so many people are insanely mortgaged and indebted to the banks now. Even if you're mortgage free, your asset will collapse as all the other debters drag it down.

In terms of "off the grid" investment, property is about as on the grid as you can get. It's a huge immovable asset that you might as well paint a target on if and when the government decides it needs to suckle from it.

Edited May 20, 2014 by byron78

[warpig]

Yes they could tax capital gains on property, instigate a windows tax or anything they feel would help raise money for the government. Martin Armstrong doesn't go as far as to suggest how the government might deal with such a situation, only that the situation will occur. It should be reiterated, he's talking about ALL tangible assets, not just property and only for those with cash to hide from the government's greedy mitts. Fine art is exclusive to the rich, so that's likely to balloon to untold heights, but property is a mixed bag because even the poor need somewhere to live.

No, cash is about as on grid as you can get, it's the most easily seized form of wealth out there. It's another example of the 80/20 rule, where they'll want 80% of the gain for 20% of the effort. Pensions will be another easy target, paintings and classic cars are more difficult to value let alone sell or confiscate.

I get that, but what's to stop them imposing a high tax to take from the property (if not taking the property directly) that both costs the home-owner and also plunges the value of the asset? That could simply be a raise in interest rates being as so many people are insanely mortgaged and indebted to the banks now. Even if you're mortgage free, your asset will collapse as all the other debters drag it down.

In terms of "off the grid" investment, property is about as on the grid as you can get. It's a huge immovable asset that you might as well paint a target on if and when the government decides it needs to suckle from it.

Edited May 20, 2014 by warpig

[R K]

The government can't force you to sell your house to pay for their deficit, it's technically out of reach.

They do precisely that every day to offset the cost of care home fees by taking a charge on the house en vivant and selling it upon death.