Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

Credit deflation and the reflation cycle to come (part 2)


spunko

Recommended Posts

sancho panza
2 hours ago, JMD said:

Political vacuums and vacuous politicians! Not a good starting place given the difficulties that lie ahead. Liberal politics has enjoyed its elevated position for many years, but only because it occupies the sacrosanct, mostly unchallengable soft middle ground. But the West was fooling itself because this type of Liberal pallid compassionate approach doesn't work in reality, instead it proved to be an arogant lazy position to take (fukishima's end of history). The theory was that the West had resolved the great global ideological conflicts and that the societal and economic problems were well on their way to being solved. The reality was that economic systems and other public institutions were breaking down, had lost trust, or were being accused even (usually without evidence) of elitism/structural racism! Moreover, the Chinese and the newly emerging middle-east problems were not even recognised. And this 'denial' was all-pervasive, for example, no sooner had the US 'empire' won the cold war than its electorate/policy makers immediately wanted to take a back seat from being world policeman. So instead of reelecting GW Bush, Clinton was elected followed by a succession of even more narrowly focused on domestic issues presidents, mostly or totally disingaged from international affairs. 

historically,vacuums get filed.I see both left and right rising drawing people from the centre particualrly as theyr get poorer.The moves of BJ/Trump at the mo are covering the cracks but the cracks are getting wider.

The simple reality is that all the current debt forgiveness/low IR's is jsut encouraging the build up of a huge debt bubble that jsut ensures some seismic socio politcal change.

AS DB and Spy have often pointed out the maths of free money has never made a lot of sense but politcally there's an increasing number of people relying on it and then more people arriving who want to rely on it.

There is a finite timeline becoming apparent to me where the dam starts to suffer irreparable damage and we start down a road there's no coming back from.

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
jamtomorrow
2 minutes ago, sancho panza said:

historically,vacuums get filed.I see both left and right rising drawing people from the centre particualrly as theyr get poorer.The moves of BJ/Trump at the mo are covering the cracks but the cracks are getting wider.

The simple reality is that all the current debt forgiveness/low IR's is jsut encouraging the build up of a huge debt bubble that jsut ensures some seismic socio politcal change.

AS DB and Spy have often pointed out the maths of free money has never made a lot of sense but politcally there's an increasing number of people relying on it and then more people arriving who want to rely on it.

There is a finite timeline becoming apparent to me where the dam starts to suffer irreparable damage and we start down a road there's no coming back from.

Don't misunderstand what this is - it looks political, but it's not. It's what DB has mentioned many times before, the politics lagging the economics.

Simply: exchanging your labour for compensation as the primary means of obtaining your needs and wants is coming to an end, and either the system is going to have to be reconfigured or it's going to have to get nasty (and then the system will get reconfigured anyway).

The burgeoning freeloader class is just the leading edge of what's coming for all of us. Real "a computer could never do this" professions are now starting to get eaten: https://www.theguardian.com/technology/2020/may/30/microsoft-sacks-journalists-to-replace-them-with-robots

And an interesting "long view" perspective on what's coming: https://spectrum.ieee.org/robotics/robotics-software/economics-of-the-singularity

Link to comment
Share on other sites

sancho panza
2 minutes ago, jamtomorrow said:

Don't misunderstand what this is - it looks political, but it's not. It's what DB has mentioned many times before, the politics lagging the economics.

Simply: exchanging your labour for compensation as the primary means of obtaining your needs and wants is coming to an end, and either the system is going to have to be reconfigured or it's going to have to get nasty (and then the system will get reconfigured anyway).

The burgeoning freeloader class is just the leading edge of what's coming for all of us. Real "a computer could never do this" professions are now starting to get eaten: https://www.theguardian.com/technology/2020/may/30/microsoft-sacks-journalists-to-replace-them-with-robots

And an interesting "long view" perspective on what's coming: https://spectrum.ieee.org/robotics/robotics-software/economics-of-the-singularity

Without sound like an acolyte of Milton Friedman,the decision to print is always and everywhere a poltical decision.

99% of the time it's a function of the economics.it's the 1% I'm interested in when a poltician pressed the override button and either carried on printing or doesn't.

It's a moot point at hte minute.we know what's going to happen for the next few years,I'm jsut interested in the political margins for movement.

Interesting point ref the journo's getting smashed,lot of middle class incomes about to get smashed in the public sector and a lot aren't seeing it coming.

Link to comment
Share on other sites

jamtomorrow
5 minutes ago, sancho panza said:

Without sound like an acolyte of Milton Friedman,the decision to print is always and everywhere a poltical decision.

99% of the time it's a function of the economics.it's the 1% I'm interested in when a poltician pressed the override button and either carried on printing or doesn't.

It's a moot point at hte minute.we know what's going to happen for the next few years,I'm jsut interested in the political margins for movement.

Interesting point ref the journo's getting smashed,lot of middle class incomes about to get smashed in the public sector and a lot aren't seeing it coming.

Agreed.

What makes this cycle inflection particularly interesting to me is the extent to which the associated grand-scale dislocation could mask these epoch-level changes occuring to the rules of the game, and therefore the potential for those changes to progress further before they're noticed for what they are.

That could manifest in all sorts of ways, one of which (of relevance to this thread) is failure of assumed/trusted policy levers. Stay alert! :Old:

Link to comment
Share on other sites

sancho panza

Shaun msut be reading the thread.

Narrow moeny getting spunked everywhere.M1 too(US annual growth rate 27.5% ffs).Big firms parking cash from QE,a sign of trouble ahead,velocity unmoved....................for nwo.

https://notayesmanseconomics.wordpress.com/2020/05/29/the-blue-touch-paper-has-been-lit-on-the-money-supply-boom-of-2020/

The blue touch paper has been lit on the Money Supply boom of 2020

Posted on May 29, 2020

Today as I shall explain later is a case of back to the future especially for me. It brings an opportunity to examine one of the economic features of the current Covid-19 pandemic. This is a surge in money supply growth which has been quite something such that I think we will look back and consider it to be unprecedented. I expect that to be true in absolute terms in many places and it is already being true in relative terms in many.

The Euro Area

This morning has brought another signal of this so let us go straight to the ECB data.

Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, increased to 11.9% in April from 10.4% in March.

Previously we had eight months of growth of ~8% so as you can see going to 10.4% and then 11.9% shows that the accelerator has been pressed hard and maybe the pedal has been pushed to the metal. If we switch to the cause of this which is mostly the rate of QE purchases by the ECB well you can see below. Apologies for the alphabeti spaghetti.

ECB PSPP (EUR): +9.545B To 2.216T (prev +10.936B To 2.207T) –

CSPP: +1.181B To 213.147B (prev +2.324B To 211.966B) – CBPP: +1.028B To 280.778B (prev +1.030B To 279.750B) – ABSPP: -377M To 30.738B (prev +161M To 31.115B) –

PEPP: +30.072B To 211.858B (prev +28.878B To 181.786B) ( @LiveSquawk) ( B= Billion and T=Trillion )

These are the weekly increases and if we stick to the money supply we see that in one week alone some 42 billion Euros of QE took place which means that on the other side of the ledger the narrow money supply has been increased by the same amount. Some of this was previously taking place and the more recent boost is called PEPP and is of the order of 30 billion Euros a week.

 

What this means is that the total amount of narrow money has gone from just under 9 trillion Euros in January to just over 9.5 trillion in April and will be going past 10 trillion fairly soon ( at the current pace in July).

Tucked away in the detail is that people have been wanting cash as well. The amount in circulation rose by 25.6 billion Euros in March and by 15.1 billion in April. Only a couple of months but that represents a clear shift of gear as we note April was the same as the whole of the third quarter last year and 2020 so far has already exceeded 2019.

Broad Money

This is a case of the same old song.

Annual growth rate of broad >monetary aggregate M3 increased to 8.3% in April 2020 from 7.5% in March.

The pick-up in annual growth is of the order of 3% and this is the highest growth rate for nearly 12 years, well until next month anyway! Switching to totals it is now 13.6 trillion Euros.

The breakdown is rather revealing I think.

The annual growth rate of the broad monetary aggregate M3 increased to 8.3% in April 2020 from 7.5% in March, averaging 7.1% in the three months up to April. The components of M3 showed the following developments. The annual growth rate of the narrower aggregate M1, which comprises currency in circulation and overnight deposits, increased to 11.9% in April from 10.4% in March. The annual growth rate of short-term deposits other than overnight deposits (M2-M1) decreased to -0.3% in April from 0.0% in March, while the annual growth rate of marketable instruments (M3-M2) decreased to 6.7% in April from 10.1% in March.

 

This tells us a couple of things. The opener is that the expansion is a narrow money thing and in fact narrow money over explains it. That means that in terms of wider bank intermediation there was a credit contraction here as we shift from M1 to M3 via M2.

Also at first it looks like the rate of deposits from businesses has picked up but then we see it seems to be insurance companies and pension funds. Or if you prefer the ECB has just bought a load of bonds off them and they have deposited the cash for now.

From the perspective of the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 6.7% in April from 6.0% in March, while the annual growth rate of deposits placed by non-financial corporations increased to 13.7% in April from 9.7% in March. Finally, the annual growth rate of deposits placed by non-monetary financial corporations (excluding insurance corporations and pension funds) decreased to 12.3% in April from 16.9% in March.

Although that might seem obvious we have seen stages where it has not appeared to be true.

Credit

The credit punch bowl has been out too.

As regards the dynamics of credit, the annual growth rate of total credit to euro area residents increased to 4.9% in April 2020 from 3.6% in the previous month. The annual growth rate of credit to general government increased to 6.2% in April from 1.6% in March, while the annual growth rate of credit to the private sector increased to 4.4% in April from 4.2% in March.

The main thing of note here is the surge in credit given to governments which links to the increases in public expenditure we have seen. There has been quite a swing here as it was negative ( -2%) as recently as February and had been negative for 9 months. So the Stability and Growth Pact was applied and then abandoned.

 

Looking at the breakdown the fall in loans to households is presumably a decline in mortgage lending and I think you can all figure out why companies were borrowing more.

The annual growth rate of adjusted loans to the private sector (i.e. adjusted for loan sales, securitisation and notional cash pooling) stood at 4.9% in April, compared with 5.0% in March. Among the borrowing sectors, the annual growth rate of adjusted loans to households decreased to 3.0% in April from 3.4% in March, while the annual growth rate of adjusted loans to non-financial corporations increased to 6.6% in April from 5.5% in March.

@fwred of Bank Pictet has got his microscope out.

Wow, another massive increase in bank loans / credit lines to euro area corporates, up €73bn in April following €121bn in March (both the largest on record by a huge margin)…….Finally, the surge in bank loans in March-April was broad-based across countries. No one left behind.

His Euro area glass is always full so let me point out that there are times when companies are borrowing to invest (good) and times they are borrowing because they are in trouble.

Also he has been kind enough to illustrate one of my main themes so thank you Fred and the emphasis is mine

Euro area corporates are drawing on their credit lines and taking new bank loans like there *is* tomorrow.

Side-effect: most banks will easily qualify for the lowest TLTRO-III rate from June (-1%).

What a coincidence!

 

Comment

This is an example in a way of the circle of life as back in the day I got a job because as a graduate monetary economist City firms wanted people to look at the money supply. Although there was a difference in that the central banks and governments were trying to bring it down as opposed to pumping it up. Rather ominously it did not work as planned and sometimes did not work at all.

How should it work? In essence the extra money balances (narrow money) should be spent relatively quickly and thereby give the economy a boost. That is why I look at narrow money and as an indicator it has worked pretty well. The catch or “rub” as Shakespeare would put it is velocity or how quickly the money circulates and there we have a problem as it is hard to measure especially right now. We know that for a while it will have been extremely low because in many areas you simply cannot spend money at the moment.

As we look internationally we see many examples of this. I have gone through the Euro area data today but if we switch to the US the numbers are even higher. The annual rate of M1 growth is 27.5% there so the pedal may even have been pushed through the metal. Care is needed as definitions vary but even using a more Euro area one it looks as though it would be over 20%.

Link to comment
Share on other sites

On 28/05/2020 at 15:26, JMD said:

Don't watch all of video - it is a bit too chummy between these two.....

Sorry, I watched it all when it came out!  Very good and the piece you mentioned was very interesting.  The whole thing did provide many insights into that world.  Both of them have moved to the Carribbean and I thought I heard mention they did this to prepare for what's coming.

I was thinking about getting a Real Vision sub, although I watched one in which the presenter and guest (political activist medic) seemed to me to be slagging off Trump a bit while saying they weren't.  I was looking for something a bit more professionally finance focussed and non political.  Any subscribers here able to say this was a one off?

I'm seeing an increasing number of good finance folk take this cv debacle apart.  They are ideally placed with their mindset and skills.  Like the Ferguson podcast I posted.  Provides a relief to the so called analysis we've had to date.  Most see it as a debacle and call out the inadequacies as well as political motivations. 

Link to comment
Share on other sites

DoINeedOne
31 minutes ago, Harley said:

Sorry, I watched it all when it came out!  Very good and the piece you mentioned was very interesting.  The whole thing did provide many insights into that world.  Both of them have moved to the Carribbean and I thought I heard mention they did this to prepare for what's coming.

I was thinking about getting a Real Vision sub, although I watched one which the presenter and guest (political activist medic) seemed to me to be slagging off Trump a bit while saying they weren't.  I was looking for something a bit more professionally finance focussed and non political.  Any subscribers here able to say this was a one off?

I'm seeing an increasing number of good finance folk take this cv debacle apart.  They are ideally placed with their mindset and skills.  Like the Ferguson podcast I posted.  Provides a relief to the so called analysis we've had to date.  Most see it as a debacle and call out the inadequacies as well as political motivations. 

I Had/Have a Real Vision subscription and whilst there is some amazing interviews, there is also a lot of content that i just don't get time to watch otherwise i would be just watching videos/interviews all day and not taking any action

Also Grant Williams has left and about 80% of the stuff i watched on there was with him

I won't be renewing

I have started cutting down how much i listen to as i said above it can take up a lot time where you not taking any action..

Link to comment
Share on other sites

I wasn't impressed by their lack of cynicism about the virus.  Ok there have been financial impacts so just stick to the finance.  I just find it difficult to put any stock in people that don't question official narratives.  Just my way of thinking for what it's worth.

As doineedone says there aren't enough hours in the day anyway so I've made harder decisions than cancelling after a free trial

Link to comment
Share on other sites

sancho panza
On 26/05/2020 at 17:26, Cattle Prod said:

Interesting indeed. Roubeni was one of the few who put me on the right track in 2006/2007, and I am forever grateful. But....he is an awful permabear.

@Talking Monkey @Shamone

great video here

train has leftthe station, debt and deficits,insolvency,deflation ,greater depression etc etc

My word he's depressing.

 

Link to comment
Share on other sites

DoINeedOne

In regard to the RealVision subscription post One of the things I'm trying to do with work and investing and life really is reducing the amount of content i read view online especially news 

More Books (especially financial history)

Documentaries 

AudioBooks for whilst do other stuff or relaxing

Newsletters that once a week or month I will get info that if i want to i can dive deeper into and if the content is good your paying a small fee for that info

This forum :)

A few YouTube channels that have great interviews with a range of people to listen to whilst doing other stuff

 

But you don't want to get into what a guy i used to work with always talked about Motion Vs Action

 

For example motion with work could be reading lots of info planning trying to perfect the best method but really you need to just throw some Ads up and see what works normally its the opposite to what you thought

I did this for a long time i need the best software, i need this, i need that before i get started - Actually all i need to do was test ads

 

I was reminded of it from a book by James Clear Atomic Habits Good book if you get the chance to read it 

https://jamesclear.com/taking-action

 

I have a few quotes which stick with me for some reason

"How much time am I dedicating to this particular activity, And who is benefiting from it"

“Am I being productive, or just active? - Am I inventing things to do, to avoid the important?"

Link to comment
Share on other sites

DurhamBorn
3 hours ago, sancho panza said:

Without sound like an acolyte of Milton Friedman,the decision to print is always and everywhere a poltical decision.

99% of the time it's a function of the economics.it's the 1% I'm interested in when a poltician pressed the override button and either carried on printing or doesn't.

It's a moot point at hte minute.we know what's going to happen for the next few years,I'm jsut interested in the political margins for movement.

Interesting point ref the journo's getting smashed,lot of middle class incomes about to get smashed in the public sector and a lot aren't seeing it coming.

I think the 70s provided the answer SP.Politicians are allowed to print by the Central Banks when the fear of unemployment is greater than their fear of inflation.Given where we are there is a fear of unemployment maybe even higher than the Great Depression (even if missguided) and no fear at all of inflation.Putting the two together as a contrarian it says we are going to end up with lower unemployment (always with a lag) and much higher inflation.

"At the surface level, the United States had a burst of inflation in the 1970s because no one-until Paul Volcker took office as chairman of the Federal Reserve-in a position to make anti-inflation policy placed a sufficiently high priority on stopping inflation. Other goals took precedence: people wanted to solve the energy crisis, or maintain a high-pressure economy, or make certain that the current recession did not get any worse. As a result, policymakers throughout the 1970s were willing to run some risk of nondeclining or increasing inflation in order to achieve other goals. After the fact, most such policymakers believed that they had misjudged the risks, that they would have achieved more of their goals if they had spent more of their political capital and institutional capability trying to control inflation earlier. At a somewhat deeper level, the United States had a burst of inflation in the 1970s because economic policymakers during the 1960s dealt their successors a very bad hand. Lyndon Johnson, Arthur Okun, and William McChesney Martin left Richard Nixon, Paul McCracken, and Arthur Burns nothing but painful dilemmas with no attractive choices. And bad luck coupled with bad cards made the lack of success at inflation control in the 1970s worse"

Does everyone see the above?,could it be today? "solve the energy crisis" "other goals" " "make certain the current recession doesnt get any worse"

If anyone wants to read a really good take on the 70s inflation that takes in the macro,but also the ducks that line up to create the conditions (both economic and political,and a lack of leadership) iv always thought this is the best on the subject

https://core.ac.uk/download/pdf/6483544.pdf

Link to comment
Share on other sites

DurhamBorn

Id add on the CBs QE and them buying bonds in the market.As @sancho panza highlights in the article above a lot of that is now sat with pension schemes.

Thats how financial plumbing works and is exactly want the CBs want.They print money and buy those bonds.That means the pension schemes now have cash and profits locked in.There is no loss as the consumption the bonds created has already been deflated by the economy.The pension scheme now has lots of cash,cash without incurring a big loss on falling bonds.That means they can use that cash to fund rights issues being issued by companies they hold shares in.By doing so they inject directly into the economy,into companies.The CB though by printing the money to buy the bonds has ensured that this isnt deflationary in itself because the "bonds" still exist.They have simply oiled the plumbing and made sure the pension funds and other market participants have the currency needed to fund the equity issues.The CBs are in affect signalling that the age of credit is over,the age of equity is beginning.The MSM and macro tourists think that the CBs QE is to help keep rates low.What they miss is that it is only doing so while it injects enough liquidity.Once it is done it will step back from the longer end of the curve.

That is when all the QE that bought the bonds from the pension schemes etc and was injected into the economy through rights issues  flows into the real economy and increases demand and inflation.

Once that happens bonds will have to compete with real assets providing a much higher return and there will be a shift and rates will move up.

 

 

Link to comment
Share on other sites

3 hours ago, sancho panza said:

@Talking Monkey @Shamone

great video here

train has leftthe station, debt and deficits,insolvency,deflation ,greater depression etc etc

My word he's depressing.

 

Great Scott he’s put a real downer on my Saturday.

Link to comment
Share on other sites

1 hour ago, DurhamBorn said:

https://stockhead.com.au/stockhead-tv/rocktalk/rocktalk-why-the-cycle-smells-right-for-potash/

Interesting talk from people in the industry on potash.From about the 10 minute mark the talk is on SOP potash,the big gainers from that would be K+S and Intrepid.Mosaic produce but it wouldnt have as big an affect on them due to product mix.

 

44887026-1540138746695128_origin.png

I agree with your thoughts on potash and have bought a bit of K and S a few weeks back. Haven’t much to play with so waiting to see what happens in the next few months.

Link to comment
Share on other sites

DurhamBorn
34 minutes ago, Shamone said:

I agree with your thoughts on potash and have bought a bit of K and S a few weeks back. Haven’t much to play with so waiting to see what happens in the next few months.

I have a lot less in K+S than others,but thats mainly simply due to them having so much debt.Im likely to increase though as divis roll in from other areas.If i had a smaller amount to play with and was prepared to take the risk then id probably go for K+S first in the sector because the reward could be very high as long as they dont roll over.There are a lot of big projects on the horizon and the fact the biggest and best miners in the world are getting involved (Anglo and BHP) shows they must be seeing the cycle.I rate Anglo Americans CEO as the best in the industry,so the fact they bought Sirius is telling.If BHP green light their massive Jansen project they must be seeing un-balanced ahead.We need to hope the price increases arrive before the big projects start producing.

Link to comment
Share on other sites

4 hours ago, DoINeedOne said:

But you don't want to get into what a guy i used to work with always talked about Motion Vs Action

Exactly what I did..never ending reading rather than starting to invest..."Just one more article/book"..you only really start learning when you have `skin in the game`!

Link to comment
Share on other sites

Fully Detached

I listened to the James Ferguson podcast - I think he's answered my question as to why we had such a drastic and sustained stimulus response to covid-19, in that CBs worldwide were failing to stoke inflation but had no excuse to turn the hoses on. Along comes a variant of the common cold and bob's their uncle.

He seems to be looking at a much shorter time frame that DB and others on this inflation kicking in, i.e. 6-12 months. His main reasoning is that this time around a lot of cash has been put directly in to people's pockets, they haven't been able to spend it, and the banks basically now need to lend lend lend. The only thing I didn't hear him say was that the banks wanting to lend is meaningless if people are losing their jobs or scared of losing their jobs.

Anyone changing their opinions on the time frame? I'm starting to wonder if now is the time to go and buy a bastarding house and finally accept that there's fuck all point trying to be responsible and think logically, when instead I could put a (shit) roof over my head and just deal with whatever happens afterwards.

Link to comment
Share on other sites

7 minutes ago, Errol said:

People will be saving more now, not spending.

Hard to know.  There's the stories of the 50k bounceback loan being spent on Range Rovers.  Mate of mine just had his Mustang tuned and resprayed.  (And he's PAYE - spent his holiday fund as this year is a write off)

Link to comment
Share on other sites

Fully Detached

I think maybe something to watch as far as inflation goes is how far the govt will go to persuade people to borrow. If they start unveiling more schemes to help distressed borrowers avoid repercussions, then they're effectively telling people they can borrow with impunity. It was interesting to see Nationwide say yesterday that borrowers making use ot the extended mortgag holiday ought to have a mark on their credit file for it. If the prevailing narrative goes that way then they might be pushing on a string. If it goes the other way, then why wouldn't people borrow 300k for a 2 bed terrace in shitsville - it's not their problem if they don't have to worry about paying it back.

Link to comment
Share on other sites

4 hours ago, DurhamBorn said:

I have a lot less in K+S than others,but thats mainly simply due to them having so much debt.Im likely to increase though as divis roll in from other areas.If i had a smaller amount to play with and was prepared to take the risk then id probably go for K+S first in the sector because the reward could be very high as long as they dont roll over.There are a lot of big projects on the horizon and the fact the biggest and best miners in the world are getting involved (Anglo and BHP) shows they must be seeing the cycle.I rate Anglo Americans CEO as the best in the industry,so the fact they bought Sirius is telling.If BHP green light their massive Jansen project they must be seeing un-balanced ahead.We need to hope the price increases arrive before the big projects start producing.

Think I may throw another small amount into Mosaic too. Pity I missed the big fall!

Link to comment
Share on other sites

6 hours ago, DurhamBorn said:

I think the 70s provided the answer SP.Politicians are allowed to print by the Central Banks when the fear of unemployment is greater than their fear of inflation.Given where we are there is a fear of unemployment maybe even higher than the Great Depression (even if missguided) and no fear at all of inflation.Putting the two together as a contrarian it says we are going to end up with lower unemployment (always with a lag) and much higher inflation.

"At the surface level, the United States had a burst of inflation in the 1970s because no one-until Paul Volcker took office as chairman of the Federal Reserve-in a position to make anti-inflation policy placed a sufficiently high priority on stopping inflation. Other goals took precedence: people wanted to solve the energy crisis, or maintain a high-pressure economy, or make certain that the current recession did not get any worse. As a result, policymakers throughout the 1970s were willing to run some risk of nondeclining or increasing inflation in order to achieve other goals. After the fact, most such policymakers believed that they had misjudged the risks, that they would have achieved more of their goals if they had spent more of their political capital and institutional capability trying to control inflation earlier. At a somewhat deeper level, the United States had a burst of inflation in the 1970s because economic policymakers during the 1960s dealt their successors a very bad hand. Lyndon Johnson, Arthur Okun, and William McChesney Martin left Richard Nixon, Paul McCracken, and Arthur Burns nothing but painful dilemmas with no attractive choices. And bad luck coupled with bad cards made the lack of success at inflation control in the 1970s worse"

Does everyone see the above?,could it be today? "solve the energy crisis" "other goals" " "make certain the current recession doesnt get any worse"

If anyone wants to read a really good take on the 70s inflation that takes in the macro,but also the ducks that line up to create the conditions (both economic and political,and a lack of leadership) iv always thought this is the best on the subject

https://core.ac.uk/download/pdf/6483544.pdf

DB you talked earlier about fear of what happens at the end of the next cycle when inflation is double digits and precious metals no longer protect wealth. Given the dollar will have fallen significantly over the next cycle what stops son of Volcker going in and crushing the inflation as per last time in the early 1980s. Wouldn’t the trade then be back into US bonds as per 1981? Or is it the total debt to GDP that’s the problem or something else such as geopolitical realignment that’s driving the worry. Sorry I must be missing something obvious 

Link to comment
Share on other sites

Don Coglione
On 21/05/2020 at 21:58, DurhamBorn said:

Has anyone ever bought on Hargreaves on the phone for stocks they dont quote for online?

I went to buy Nexa Resources tonight,but not available on the platform yet its quoted on the NYSE.A very big zinc producer that should have a bull run in reflation,but also throws of 6 million oz of silver a year.

Any resolution on this? Using NEXA as an example, ii show it as being no longer available.

Which is a pain.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...