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AteMoose

Imho It All Boils Down To This Poll...

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Lets keep it simple folks, which do you think is more to occur. If you believe in stagflation or anything else try and fit it into one of the 'simple' options

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At the risk of being flamed by many a gold bug (of which I have a rising holding) I have opted for deflation, however believe the "real" answer will be stagflation.

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Stagflation, a portmanteau of the words stagnation and inflation, is a macroeconomics term used to describe a period of inflation combined with stagnation (that is, slow economic growth and rising unemployment, possibly including recession).

Stagflation is a form of inflation, therefore it fits into the poll ;p

no bust.

Theres always one ;p

Edited by moosetea

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Theres always one ;p

I voted deflationary bust, because I think that will come next... likely followed by inflation - as over-corrections are made.

[P.S. I found a house I kind-of-like at a price I can afford today... Whoo-hoo! First time in 4 years! Must stop searching Rightmove for fun though....]

Edited by A.steve

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Stagflation is a form of inflation, therefore it fits into the poll ;p

I don't see an option for - all debt presently exceeds all savings, and both ultimately fall a far greater magnitude than domestic prices eventually rise.

Inflation? Yes. Deflation? Yes. How? Rapid and involuntary deleveraging occurring, when viewed through a world-view that measures only its own predefined constraints.

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I voted deflationary bust, because I think that will come next... likely followed by inflation - as over-corrections are made.

I agree.

I have not voted yet, in the hope this option will be added to the poll.

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Guest Skint Academic

I've been wondering about this for a fair while and I suppose this poll has finally made me decide which outcome I think is most probable. I agree that we'll have stagflation for a bit, but how long can this last when there's all that debt out there that needs to be paid back regularly and the economy has ground to a standstill? How can you get wage inflation if everyone is worried about their job security and competition from the immigrants and other countries?

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I voted deflationary bust, because I think that will come next... likely followed by inflation - as over-corrections are made.

The dot com boom was a deflationary bust - the CBs reacted with lots of inflation, before widespread deflation happened. My guess is they'll do the same, just as quickly

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Does a broadly 50:50 split make this a random choice?

(as in toss a coin)

Maybe the poll is random, but the reality can be forecast far better than that.

I think an equivalent poll might have been "Weather: which is it? ( a ) Sunshine; ( b ) Rain...

If we assume old-school economists were right when they said that inflation is caused by government over-spending... and we assume regulatory failure leading to bad loans is equivalent... then we can take several steps further.

If we assume that far fewer bad loans are being agreed today than in the recent past, this is significantly deflationary. If politicians do not assume that bad commercial loans and government over-spend are synonymous... which seems plausible, then government spending is unlikely to take up the slack to make the slowdown mild... and this constraint may well be enforced by the IMF/World Bank... since government overspend would now require government borrowing.

I've absolutely no doubt that, once deflation starts to bite (especially since the cost of living will likely rise due to overseas influences) there will be concerted effort to keep domestic inflation up... though I can easily see it taking years to find acceptable effective ways to do this.

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The dot com boom was a deflationary bust - the CBs reacted with lots of inflation, before widespread deflation happened. My guess is they'll do the same, just as quickly

Against what sort of assets do you think borrowing will be secured? We've done houses... they don't work any more.

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Inflationary bust.

Deflationsists assume that the money on a banks balance sheets actually exists and counts towards the real money supply.

It doesn't and so therefore can't.

Once it starts existing, we see inflation, and lots of it, while balance sheets also reduce.

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Against what sort of assets do you think borrowing will be secured? We've done houses... they don't work any more.

I think the aim of the next wave of cheap money is to recapitalise the banks. Instead of reloaning to the deadbeat public, they'll loan internally to their prop funds and bid up the price of food, energy, renewables, etc.

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I think the aim of the next wave of cheap money is to recapitalise the banks. Instead of reloaning to the deadbeat public, they'll loan internally to their prop funds and bid up the price of food, energy, renewables, etc.

I agree that the cheap central bank money is intended to allow banks to recapitalise.

I'm far less convinced that commodities are a long-term play, however. I'd believe it if we see a rise in bank-owned investment companies that trade shares and corporate bonds.

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I agree that the cheap central bank money is intended to allow banks to recapitalise.

I'm far less convinced that commodities are a long-term play, however. I'd believe it if we see a rise in bank-owned investment companies that trade shares and corporate bonds.

What do you guess is going to happen?

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I agree, commodities will do well in the short term but will collapse when the reality of recession dawns.

like they didn't in the 70s? :blink:

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Lets keep it simple folks, which do you think is more to occur. If you believe in stagflation or anything else try and fit it into one of the 'simple' options

I went for inflationary, on the grounds that

1) There is nothing else the Government can do to get out of the mess of having vast debt other than encourage inflation.

2) The stock markets seem astonishingly resilient in the face of all the carnage in Banking. I can only assume that is because people feel that BP shares will be worth more pounds as time goes on due to inflation.

However, the markets can be very wrong (wasn't NR a darling of the stock-market as recently as 12 months ago?).

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Guest Skint Academic

Aha! I've just reached enlightenment. I understand the full wisdom of Mr B's miracle economy. It requires a zen-like balance between inflation and deflation, like a butterfly perched on the thinnest of twigs ...

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I agree, commodities will do well in the short term but will collapse when the reality of recession dawns.

Presumably you saw this coming and are currently long commodities in order to take advantage of the interim period?

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  • 297 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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