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This May Be The "big One" Say Morgan Stanley & Peter Schiff

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http://business.smh.com.au/business/downtu...80729-3mlu.html

Downturn may be 'the big one'

July 29, 2008 - 12:26PM

The risk of a Great Depression-style global debt-deflation cycle is one in three, according to an investment bank economist.

Beyond an anticipated cyclical slowdown in the next six months, Morgan Stanley economist Gerard Minack has raised the possibility of a substantial structural risk caused by lower asset pricing, high household debt levels, and a cash shortage.

.../

Meanwhile:

http://www.reportonbusiness.com/servlet/st...ialEvents2/home

When Dr. Doom speaks, we should listen

JOHN HEINZL

July 29, 2008 at 6:00 AM EDT

When CNBC or Fox needs a guest who can be counted on to deliver a thoroughly gloomy outlook for the U.S. economy, they call on “Dr. Doom.”

To say Peter Schiff is bearish is like saying Tiger Woods is an okay golfer, or China has a small problem with air quality. The president of Connecticut-based Euro Pacific Capital Inc. is so pessimistic about the U.S. economy that he lives in a rented house and keeps the vast majority of his and his clients' money outside the country, a healthy chunk of it in gold and energy stocks.

“America is finished. We are going to destroy this country. Our economy is just going to unravel,” he told me yesterday. “The question is how much money is the world going to lose before it writes us off?”

...

“The government doesn't have the balls to raise taxes. It's going to print the money. It's going to destroy the currency,” he says.

During the Depression of the 1930s, at least people who held cash made out okay. Because prices were falling, their money actually bought more. But if Mr. Schiff is right and the U.S. is heading into a period of hyperinflation, then even the most prudent savers will see their wealth eviscerated.

.../

Game on! :o

Place your bets. Runaround... now!

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Total US debt compared to the gross domestic product has surpassed levels seen in the mid-1930s. US household gearing is at an all-time high, as were US house prices before their fall in the wake of the subprime crisis.

That makes me feel so much more positive....

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Not at all. I'm not into making a fast buck from ramping the gold price. But EVERYONE on this board has savings. They're saying today that mortgage lending won't improve until after 2010, so the short, medium and long term outlook for holding cash is important to everyone on here I would have thought.

The debate is important to determine whether inflation-linked bonds, variable or fixed rate savings are the best way to go. If your STR fund or deposit is any appreciable percentage of your target property price, you want to gain the best return you can, i.e. benefit from real house price falls not just nominal ones...

Indeed. Gold is an interesting subject in the current economic climate. Censoring it would be just as bad being obsessed about it.

Edited by williamdb

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Ah, another gold ramping thread cunningly disguised as... a gold ramping thread :rolleyes:

Not at all. I'm not into making a fast buck from ramping the gold price. But EVERYONE on this board has savings. They're saying today that mortgage lending won't improve until after 2010, so the short, medium and long term outlook for holding cash is important to everyone on here I would have thought.

The debate is important to determine whether inflation-linked bonds, variable or fixed rate savings are the best way to go. If your STR fund or deposit is any appreciable percentage of your target property price, you want to gain the best return you can, i.e. benefit from real house price falls not just nominal ones...

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The eternal question is therefore, 'how do you protect your STR / savings fund?'

Gold is a possibly a contender. One thing I am looking at are big retailer shares (Tesco, Carrefour,...), once they have corrected enough to reflect the fact that most of what they are selling these days are discretionary goods. Tobacco?

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Schiff is almost the only man in the US who has consistently told the truth on this. Furthermore, unlike most of the other rather dim-witted US pundits, he has a sharp intellect and doesn't suffers fools. Compared to the rest of those idiots he is a towering intellect, and will be vindicated, though he is an absolutely ghastly fellow and has played the market for his own gain.

VP

I heard Schiff in an interview debating inflation v deflation say we would ultimately get deflation however in the short to mid

term inflation even hyperinflation. I must say though that gold isn't doing that well considering the situation, its struggling

to break through $1000 an Oz. Schiff has been 100% correct up until now but I think he is bound to be wrong at some point its only human, so I think short term inflation, mid term turning to deflation and long term deflation.

Edited not wrong to wrong

Edited by Fudge

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It's the Superhyperdeflationarysavingsmanglingmovement .....

.... that concerns me :blink:

meanwhile the yellow stuff fell again today

possibly because a load of it was dumped from some European banks? - or just the usual manipulation? - or both.

We do live in interesting times.

A golden (sorry) opportunity to see inside the minds of those who care to run the show.

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For the last two years I have been constantly trying to figure whether we were in for an inflationary or deflationary bust.

I knew there was going to be a bust like many many people on HPC but I guess the imponderable is whether the central banks can pump enough liquidity in before prices of assets and goods implode.

My suspicion is that we may get half hearted attempts to avoid deflation but these will fail entirely and then we will be in a 1930s style depression. If I am wrong then we will get inflation for sure. Either way it is going to be severe. Oh well at least I also rent a house like Peter Schiff and a good deal of my money in inflation protected bonds so its real value is protected. I am also about to lock in my rent on an RPI formula for 5 years so I have security of tenure and the LL seems happy too.

I suspect that Gordon Brown is currently thinking that inflation would be a lot better than deflation from a political point of view which is why the Treasury and BoE are not seeing eye-to-eye over the bailout issue at the moment. Mr King wants to kepe a lid on inflation an dif that means a bit of economic pain and falling demand then that is fine but I suspect even he would not want to see real economic demand and nominal prices falling at the same time.

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For the last two years I have been constantly trying to figure whether we were in for an inflationary or deflationary bust.

I knew there was going to be a bust like many many people on HPC but I guess the imponderable is whether the central banks can pump enough liquidity in before prices of assets and goods implode.

My suspicion is that we may get half hearted attempts to avoid deflation but these will fail entirely and then we will be in a 1930s style depression. If I am wrong then we will get inflation for sure. Either way it is going to be severe. Oh well at least I also rent a house like Peter Schiff and a good deal of my money in inflation protected bonds so its real value is protected. I am also about to lock in my rent on an RPI formula for 5 years so I have security of tenure and the LL seems happy too.

I suspect that Gordon Brown is currently thinking that inflation would be a lot better than deflation from a political point of view which is why the Treasury and BoE are not seeing eye-to-eye over the bailout issue at the moment. Mr King wants to kepe a lid on inflation an dif that means a bit of economic pain and falling demand then that is fine but I suspect even he would not want to see real economic demand and nominal prices falling at the same time.

You regard inflation-protected bonds as adequate protection?

Nice theory, but try working out your personal rate of inflation (we all have one according to what we spend our money on) and compare that with the rate your bonds are based on. If you buy Ipods and televisions every week, and don't drive or eat, the results should look good.

Personally I would love to see BIG deflation, except that it would have a bad effect on many friends and family.

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You regard inflation-protected bonds as adequate protection?

Nice theory, but try working out your personal rate of inflation (we all have one according to what we spend our money on) and compare that with the rate your bonds are based on. If you buy Ipods and televisions every week, and don't drive or eat, the results should look good.

Personally I would love to see BIG deflation, except that it would have a bad effect on many friends and family.

I think you'll find hyperinflation will also be a tad detrimental to your friends and family as well...

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Schiff is almost the only man in the US who has consistently told the truth on this. Furthermore, unlike most of the other rather dim-witted US pundits, he has a sharp intellect and doesn't suffers fools. Compared to the rest of those idiots he is a towering intellect, and will be vindicated, though he is an absolutely ghastly fellow and has played the market for his own gain.

VP

Edited by VacantPossession

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I don't think governments like inflation much though, it seems to make the voters ... generally vote them out.

I'd say that's already a done deal! :lol:

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I don't think governments like inflation much though, it seems to make the voters bang pots, protest, strike and generally vote them out.

Govt's don't like doing anything, that's why we constantly keep getting into these messes. They just like the power but don't actually know what to do with it.

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are we saying morgan stanley are on the ball and are not insolvent ?

NO - a morgan stanley analyst is on the ball.... the rest of em are just as clueless as everyone else...

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  • 399 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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