Thursday, May 8, 2014

What was that about a recovery?

Chart Of The Day: The Fed (And Friends) $10 Trillion Visible Hand

Posted by hpwatcher @ 09:56 PM (2692 views)
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15 thoughts on “What was that about a recovery?

  • We have now had 6 years of this.

    Still no end in sight, as the ”key” economies are just as dependent on the cheap money and low interest rates as they were at the start.

    Inflationary depression anyone?

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  • This supports the notion that continuing to play when you know it to be a zero-sum game is insane. Over the years on this site I have seen more than plenty of intelligent people who could, together, assist in a revolutionary change. We have all to divest from ‘their’ game, and tough as it may be evolve an alternative. Best start now, playing by our rules, as opposed to waiting until the proverbial hits the fan and then getting into a pickle!

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  • It took from 2002 to 2008 (6 years) for things to implode.
    Life support has been in place for 6 years if they make it to the end of the year.

    Just saying.

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  • You’d get a similar divergence if you substituted the price of gold for the bottom line and sterling appreciation or GDP growth or house prices for the top one. Or how about the accuracy of doomster predictions for the bottom line and the price of hamster feed for the top one?

    The trouble with squiggly lines on charts is that they only show you the past. The trouble with combining two squiggly lines on charts is that they then provide an opportunity for tea leaf reading dunderheads to bamboozle other dunderheads into thinking that some meaning has been created. Charts have no predictive power whatsoever. They only tell a story but the story they tell changes every time the start date or resolution (time scale) changes.

    What does have meaning is the very latest data coming in (the data that creates the chart lines going forward) and also the very latest surveys coming in. What this data (remember this is the absolute latest data that has not yet fully made the mainstream press) tells us is that job creation here and in the states is suddenly ramping up at a remarkable rate.

    According to the most respected surveys, the UK is currently creating an astounding 3000 new jobs per day. That’s way more than a million new jobs per year! The US is seeing something similar. I can tell you that this new information has made such an impact on market participants that big bets are going on the FED and BOE raising their rates in the first quarter of 2015. Interest rates rises generally are now seen as a forgone conclusion.

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  • Sorry, I meant 3300 new jobs per day (as opposed to 3000).

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  • It’s an interesting graph but it would be a lot more interesting if they hadn’t cut off the bottom half to make the divergence look more dramatic and the central bank assets were controlled for inflation.

    Central back assets have only tripled in a time of relatively high inflation for us and the US. tbh, I’d have thought it was a lot more than that, but maybe if you omit Japan, it would have been (as they’ve been intervening for decades).

    Could have done with a longer timeframe to really show how anomalous this is too.

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  • The trouble with squiggly lines on charts is that they only show you the past.

    HAHAHAHAHAHAH I am getting the distinct impression that you don’t like this chart. Data is data, and whether you like it or not, those are the facts.

    The trouble with combining two squiggly lines on charts is that they then provide an opportunity for tea leaf reading dunderheads to bamboozle other dunderheads into thinking that some meaning has been created

    But, with respect, that’s what people on here have been doing for years. Many times, various figures have been dragged up, from goodness knows where, to support various arguments…and certain posters have always insisted that others do the same.

    According to the most respected surveys, the UK is currently creating an astounding 3000 new jobs per day. That’s way more than a million new jobs per year!

    Nothing more than a blip – what about the 9,500 lost yesterday? Moreover, it’s highly misleading to scale up 3,000 jobs into 1 million….for a trend is NOT likely to continue. The 3,000 – if it is true – is probably a mix of seasonal, zero hours and part time jobs……NO quality jobs are being created, that is clear.

    Next year end, the UK will be back in recession and negative growth – exactly where an indebted, low growth, low wage economy belongs.

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  • It’s an interesting graph but it would be a lot more interesting if they hadn’t cut off the bottom half to make the divergence look more dramatic and the central bank assets were controlled for inflation.

    Good point. But I am trying to avoid the ‘comparison visuals’ and am just looking at the data i.e. date / trillions.

    Basically there is no way out – it’s heading toward currency destruction in order to manage the debts. Those with savings had better take note.

    I am hearing of physical gold being sold on a pretty large scale; I’ve never known of so much being bought and that’s just the UK.

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  • The meteor strikes and the last dinosaur from the 2007 period slowly chokes and dies in a thick cloud of fact free ash.

    This website has a choice. To either become a refuge for fact free 2007 doomsters or to move on to discuss house prices and housing supply in light of the actual current conditions. If the former is chosen this site will wither from lack of interest and credibility (much like it did a while back when three or four people dominated with the same old fact free one-liners repeated ad nauseam).

    The recovery is slowly morphing into a boom. Can this site adapt to this reality and live? Personally I doubt it but I hope it does.

    I came here after a two year hiatus because I wanted to warn people about the effect housing shortages (in the more employment rich areas) would have on prices and btl buying. For some reason this impending disaster was completely denied and ignored (on a house price site of all places) but we can all now see what’s taken place. Its just a shame that the opportunity to get ahead of the curve for once was therefore missed by most here.

    I also wanted to encourage people to consider self-building and to encourage them to support the campaign for the release of cheaper land to self-builders. Well the shortages ( in the employment rich areas) are now well accepted and the government has finally understood the strategic importance of self build, so that’s it for me as far as this site goes.

    Do strongly consider self building. Bombard your local council with emails pleading for a plot to be released and copy in as many central govt departments as possible. These things often eventually work. Good luck all.

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  • Yes, rates will rise, but deflation is still taking over Europe. We could yet see negative rates before they rise. Note, that that could even come under tightening conditions, where negative interest rates off-set the deflationary impact of reigning in QE.

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  • What my look at tea-leaves suggests, is that QE is running out of steam, and that it was part of an effort to overt negative interest rates. These have been held just above zero for some time now, and any further crisis, absent further QE, would lead to negative interest rates, simply because the new technology emerging is highly deflationary.

    QE from Europe could help stave off negative interest rates, but in actual fact may simply resolve deflation within the Eurozone, since I doubt Draghi has the power to hold back market forces in the Eurozone forever. Simply too many competing factors to achieve that in my opinion. Any Central Bank action will simply be counteracted by rebellion within the previous Countries, now vassal States of Europa.

    Sorry, but this will mean a mega boom in house prices. The MMR changes will not change that. What will happen is that less people will have access to better interest rates. The vast majority who have not reigned in spending and saved up a deposit will be left renting for decades if that happens.

    In previous centuries, indeed decades, this situation could have resulted in hyperinflation in the non-core countries and massive stagflation elsewhere, but the reality is now that the deflationary forces of new technology are hamstringing that. The market is taking over from the central planners. Since what does it matter the price of oil, when I can collaborate online with teams across the planet without needing to leave my living room? What does it matter the price of paper, when I can send almost any document at a click of a button. What does it matter the price of manufacturing when I no longer need to buy DVDs and can stream data over the web. All these things and more are coming to pass, and the last thing standing that cannot be abolished is the need for a family home. The dimensions of which have not changed in centuries.

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  • Predictions whether forecasting boom/bust/muddle through etc. are little more than a reflection of one’s internal disposition. Optimists will tell you things are working out well, whilst pessimists will tell you, in the words of Private Frazer, “we’re all doomed”.

    This seems so obvious as to not require stating, but still people seem to be impressed by their forecasts, rather than say surprised by their eerie familiarity or desirous to think something different for a change.

    In very general terms the global standard of living tends to improve over long periods of time, whilst over shorter time frames there is considerable volatility, functioning at a level that is more or less beyond prediction.

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  • Predictions whether forecasting boom/bust/muddle through etc. are little more than a reflection of one’s internal disposition.

    Yes of course they are, it’s all in my head. Meanwhile in Japan………..

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  • Japan’s national debt totaled a record-high Â¥1.02 quadrillion as of the end of March, up Â¥33.36 trillion from a year earlier, the Finance Ministry said.

    The central government debt, which increased ¥7.01 trillion from the end of December last year, kept rising mainly due to ballooning social security costs in line with the aging of the population.

    The balance of government bonds, financing bills and other borrowing crossed the ¥1 quadrillion line for the first time ever at the end of June 2013.

    The national debt stood at ¥8.06 million per capita, based on an estimated population of 127.14 million as of April 1.

    Finance Minister Taro Aso said the situation has become “very severe” because of slow progress in fiscal reforms.

    Of the debt, general government bonds increased ¥38.86 trillion from a year earlier to ¥743.87 trillion. Financing bills, used to procure funds for currency market intervention, totaled ¥115.69 trillion, up ¥420.8 billion.

    But fiscal investment and loan program bonds, used to raise funds for loans to government affiliates, decreased ¥5.05 trillion to ¥104.21 trillion.

    Long-term debt, excluding fiscal investment and loan bonds, financing bills and others, totaled ¥770.4 trillion.

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