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Jim Puplava's 3rd Hour 10th June - Hilarious Jingle!

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Fantastically scary as usual...

Introduced with the song "up, up and away (in my beautiful balloon)" !!!

Talks about inflation vs. deflation for the first half hour...

1. Inflation vs. Deflation

2. For Good and Evil

3. A Conversation With a Mining Executive

4. SOS!: Stuck On Stupid Award

5. Emails and Q-Calls

6. Other Voices: Kelley Wright, IQ Trends

and Emily Thornton, BusinessWeek Online

For anyone who thinks it's going to be deflation, think again...

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Fantastically scary as usual...

Introduced with the song "up, up and away (in my beautiful balloon)" !!!

Talks about inflation vs. deflation for the first half hour...

1. Inflation vs. Deflation

2. For Good and Evil

3. A Conversation With a Mining Executive

4. SOS!: Stuck On Stupid Award

5. Emails and Q-Calls

6. Other Voices: Kelley Wright, IQ Trends

and Emily Thornton, BusinessWeek Online

For anyone who thinks it's going to be deflation, think again...

Agreed, a well informed discussion. But as I understand it JP is saying only that the Fed and other CBs will attempt to inflate their way out of their problem. It's not bound to succeed, indeed is fraught with difficulties, and will in any case only defer a crisis (for around 18 months?). There is still a recession waiting at the end of the process even if it succeeds...

But whatever, I've been trying to work out the implications for house buying. From a HP perspective it seems there are a number of possibilities, including:

(i) the housing price bubble deflates with falling nominal prices and falling real prices - a crash like 89-96. Clearly house buying in this scenario is plain stupid.

(ii) the housing price bubble deflates with stable or rising nominal prices but falling real prices.

On the (ii) possibility, it could be a situation like 74-79, which few remember as a crash, in which mortgage debt continued to be eroded by inflation because wage inflation more or less kept pace with prices, though not without social and industrial unrest. I guess this is the soft landing scenario the CB's are trying to go for - and if they succeed then buying now or soon, especially on a lowish fixed rate would not be a disasterous move. (Unless there is something I'm not seeing here).

But if price inflation is not matched by wage inflation, which seems more likely to me this time around, then we will end up back with (i) - but it may take time and HPC will be delayed for a further albeit shortish time. So on this scenario holding out on house purchase seems very prudent.

Or it could be price hyperinflation, in which case all bets are off - except for cgnao's strategy.

But, hey WTF do I know! I'm just trying to gauge the best time to buy a house without the huge risks that are out there at the moment.

Maybe I should Q-line him on it.

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Wage or hyper-inflation will simply drive more jobs abroad, our options are limited, even compared to the 70's. I expect we'll see money supply growth in the high double-digits with CPI and wage settlements rigged downwards, i.e. these wage constraints are a de facto incomes policy, this will lead to eventual stagflation as import, energy and commodities inflation slowly erode peoples' standard of living... this is the default outcome as no one is brave enough to pull a Volker with these debt levels. Eventually they will try and hyper-inflate their way out, with the outcome of driving further jobs abroad.

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BuyingBear,

If the recent past is anything to go by that is exactly what will happen.

$100 oil, $1000 Gold around the corner if so and that still wouldn't be the end of it.

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...and lets not forget folks that interest rate hikes are in themselves inflationary insofar as they increase costs for indebted companies, costs that are passed on to the customer as higher prices...

Oooh, it's going to be fun. Are those Ray Mears survival programmes still on?

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Wage or hyper-inflation will simply drive more jobs abroad, our options are limited, even compared to the 70's. I expect we'll see money supply growth in the high double-digits with CPI and wage settlements rigged downwards, i.e. these wage constraints are a de facto incomes policy, this will lead to eventual stagflation as import, energy and commodities inflation slowly erode peoples' standard of living... this is the default outcome as no one is brave enough to pull a Volker with these debt levels. Eventually they will try and hyper-inflate their way out, with the outcome of driving further jobs abroad.

However, if the inflation causes prices of non-house stuff to tend upwards, this would pressurise individuals with silly mortgages, and they would go "POP" and, for the house market, we get forced sellers, 89-96 again maybe via a mildly different route.

I have thought about this many times, and I can't help but feel that - for the average joe with a house - Bernanke's inflate-away will ***** him over big time.

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  • 301 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%



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