The Biflation thread

[Mikhail Liebenstein]

So what sort of economic scenario do people think we will now experience?

I my opinion it will be the usual pattern. In 2008/9 I do recall the word biflation being used. By rights prices (property, equities etc) should collapse, but what we experienced was a process by which debt (especially if borrowed to buy equities) got eroded by inflation, whereas debt incurred to support day to day living costs by the less well off just feel like a heavier burden as the cost of things like food and housing rose.

For a period over the last 25 years I did assume that some of the downward pressure on the mass populous might subside once globalisation had played out, and the Chinese were as individually as wealthy as westerners. But actually I am not so sure, what seems to have happened is that Globalisation has helped the likes of Amazon to scale,  but there is a maintained downward pressure in jobs and wages. 

So I think overall it will be more of the same, until a major event like a revolution happens.

 

[Mikhail Liebenstein]

Definition: https://www.investopedia.com/terms/b/biflation.asp

Edited June 6, 2020 by Mikhail Liebenstein

[Belfast Boy]

16 minutes ago, Mikhail Liebenstein said:

So I think overall it will be more of the same, until a major event like a revolution happens.

Yes, so many lines have been crossed and rules have been broken at the highest levels.

I keep hoping it will be different this time, but they are doubling down on what we think are mistakes.

Where (when) will it all end?

[PeanutButter]

When will it end? 

Oh I dunno, probably in about 20 years when the cascade climate change effects rip our systems apart.

[Belfast Boy]

40 minutes ago, Mikhail Liebenstein said:

So I think overall it will be more of the same, until a major event like a revolution happens.

... or war.

[Roman Roady]

1 hour ago, Belfast Boy said:

Yes, so many lines have been crossed and rules have been broken at the highest levels.

I keep hoping it will be different this time, but they are doubling down on what we think are mistakes.

Where (when) will it all end?

Doubling down:- the theory that you will always walk away from the gambling table as the winner because by the time your luck changes the Doubling effect has eradicated your previous losses.

Trouble is...this assumes endless resources that enable the doubling bet to have credibility.

You see, when you write it down the flaw appears.

I know that they own the printing press but, you cant print wealth, it only looks like that for a while.

They doubled down 12 years ago and I think that the next attempt will lack credibility.

 

In the real world of gambling (no not the City) the table has a limit to prevent this, which dear fellow posters is the main reason that the house ALWAYS wins...that and the green slot on the roulette wheel.

[Mikhail Liebenstein]

2 hours ago, Belfast Boy said:

... or war.

Good point! 

May well be what is next on the cards. 

South China Sea anyone? 

[Belfast Boy]

38 minutes ago, Roman Roady said:

Doubling down:- the theory that you will always walk away from the gambling table as the winner because by the time your luck changes the Doubling effect has eradicated your previous losses.

Trouble is...this assumes endless resources that enable the doubling bet to have credibility.

You see, when you write it down the flaw appears.

I know that they own the printing press but, you cant print wealth, it only looks like that for a while.

They doubled down 12 years ago and I think that the next attempt will lack credibility.

 

In the real world of gambling (no not the City) the table has a limit to prevent this, which dear fellow posters is the main reason that the house ALWAYS wins...that and the green slot on the roulette wheel.

I would say they gambled 12 years ago and it worked. So this time they doubled down. The questions is: will it work again? At what point will the central banks lose all credibility?

4 minutes ago, Mikhail Liebenstein said:

Good point! 

May well be what is next on the cards. 

South China Sea anyone? 

In 2008/9 it was the American subprime crisis that led to the financial crisis. After which China's economy barely slowed. Can we rely on China to pull us all out of another economic mess? A mess that we can easily blame on them.

Interesting times.

[Mikhail Liebenstein]

4 minutes ago, Belfast Boy said:

I would say they gambled 12 years ago and it worked. So this time they doubled down. The questions is: will it work again? At what point will the central banks lose all credibility?

In 2008/9 it was the American subprime crisis that led to the financial crisis. After which China's economy barely slowed. Can we rely on China to pull us all out of another economic mess? A mess that we can easily blame on them.

Interesting times.

Probably when money loses credibility. 

The trouble is if I went to the cash machine, withdrew £10,000 and then threw it in the air in London, would people it up? Of course they would. 

Money is part of the trick, the real trick is owning the capital. In a crash the powers that be don't like to see the value of the capital fall, as then the money could be used to buy control of capital. So they also need to control the money and have first mover access to it. 

[Timm]

Ahh, Biflation!

You might find this thread of interest (or you might not):

 

[regprentice]

1 hour ago, Roman Roady said:

Doubling down:- the theory that you will always walk away from the gambling table as the winner because by the time your luck changes the Doubling effect has eradicated your previous losses.

 

In gambling circles that's called the martingale strategy. 

If you lose keep betting on something close to evens, doubling your stake each time, until you win. 

The problem is after starting with a bet of £10 your tenth bet would be £5000. 

An accountant near me went to prison after running up a £300k debt they funded by stealing from their emoyer. Apparently using the martingale strategy it took them less than an hour to lose £300k.

 

Edited June 6, 2020 by regprentice

[dryrot]

Biflation a term new to me. is it analogous to the Chapwood Index? "The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."

i.e. not the fiddled CPI "basket". The real  ROI is 10% +

https://chapwoodindex.com/ 

[Timm]

Quote

 

Biflation a term new to me. is it analogous to the Chapwood Index? "The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation."

i.e. not the fiddled CPI "basket". The real  ROI is 10% +

https://chapwoodindex.com/ 

 

No, it's not an index.

It's a concept (and a woolly one at that).

The idea is that in normal times, things bought with credit (such as houses) tend to go up in price more than things bought with cash (like carrots). But in times of financial crisis, that relationship reverses - houses go down and carrots go up.

It's full of holes, but I like it.

Edited June 6, 2020 by Timm

[Orb]

37 minutes ago, Timm said:

in times of financial crisis, that relationship reverses - houses go down and carrots go up.

 

Different times mate. Now they're dangled. 

[Mikhail Liebenstein]

5 hours ago, Timm said:

Ahh, Biflation!

You might find this thread of interest (or you might not):

 

That was what I was looking for!

The thread didn't appear on the site search.

[Timm]

On 06/06/2020 at 19:07, Timm said:

No, it's not an index.

It's a concept (and a woolly one at that).

The idea is that in normal times, things bought with credit (such as houses) tend to go up in price more than things bought with cash (like carrots). But in times of financial crisis, that relationship reverses - houses go down and carrots go up.

It's full of holes, but I like it.

And here we are.