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

  • Replies 35.1k
  • Created
  • Last Reply
Castlevania
1 hour ago, feed said:

Strong favorite, for last.  

After Brexit and the shenanigans with the vaccines, this has to be the bet..  

image.png.85f3fa07b6826491d94c49590a1d3d3a.png

 

 

Spain’s song whilst admittedly very knock off Enrique Iglesias is very good. It shouldn’t be near the bottom.

Link to comment
Share on other sites

Don Coglione
6 minutes ago, AWW said:

But yes, regarding the discussion about general intelligence levels within a population - a significant minority of people in the UK are terrifyingly thick.

Yes, the average intelligence level in the UK is terrifying - and half the population is thicker than that!

Link to comment
Share on other sites

29 minutes ago, AWW said:

But yes, regarding the discussion about general intelligence levels within a population - a significant minority of people in the UK are terrifyingly thick.

And then they let them become schoolteachers.

Link to comment
Share on other sites

41 minutes ago, AWW said:

I'm pretty good at mental arithmetic and always find myself being asked really quite easy sums by friends and family. Mrs AWW will say, "I've got a 30% discount code; what does that knock off £25?".  I used to just tell her the answer, but now I say - "you can work that one out yourself" - and of course she can, even if she does have to imagine three-lots-of-two-pounds-fifty.  I think a lot of people simply lack confidence in their own skills, or are too lazy to work it out for themselves when they can just ask o

Percentages are really easy if you remember they are reversible, so 30% of £25 seems a bit tough but if you do 25% of £30 then that's just a quarter, so easy. It's rare that both numbers are tough, so definitely helps me.

Link to comment
Share on other sites

Stinky Wizzleteats

Did anything come of that rumour that the patriarch of Samsung had died and they were covering it up to avoid death duties? Has he been seen yet?

Link to comment
Share on other sites

Yadda yadda yadda
3 hours ago, DurhamBorn said:

Staging is horrible as well,the BBC havent got a clue as usual.Worst thing is the public will say oh its political when it isnt,its just shit. @stokiescum will enjoy Cyprus and Serbia i expect ;)

I saw Cyprus. El Diablo. It is practically devil worship. But easy on the eye.

Link to comment
Share on other sites

Yadda yadda yadda
1 hour ago, Siggy said:

Percentages are really easy if you remember they are reversible, so 30% of £25 seems a bit tough but if you do 25% of £30 then that's just a quarter, so easy. It's rare that both numbers are tough, so definitely helps me.

30% is just divide by 10 and multiply by three. Similar for any multiple of 10%.

Link to comment
Share on other sites

2 hours ago, Don Coglione said:

Yes, the average intelligence level in the UK is terrifying - and half the population is thicker than that!

That's mean.

Link to comment
Share on other sites

Noallegiance
3 hours ago, AWW said:

But yes, regarding the discussion about general intelligence levels within a population - a significant minority of people in the UK are terrifyingly thick.

But well off if they BTL'd in 2000 and sold in 2014!

I'm above average so-called intelligence and poor as fuck.

Different kinds of clever.

Link to comment
Share on other sites

4 minutes ago, Noallegiance said:

But well off if they BTL'd in 2000 and sold in 2014!

I'm above average so-called intelligence and poor as fuck.

Different kinds of clever.

Thats called being lucky, and nothing at all to do with intelligence.

Unless of course in 2007 they were quoting the couple of people on HPC, who were saying our govt would copy Japan with ZIRP and printy printy.

 

Link to comment
Share on other sites

13 minutes ago, Noallegiance said:

But well off if they BTL'd in 2000 and sold in 2014!

I'm above average so-called intelligence and poor as fuck.

Different kinds of clever.

Not as well off as if they'd put those BTL deposits into, say, AAPL.

Link to comment
Share on other sites

Erewhon888
1 hour ago, Barnsey said:

 

The link below should point to the transcript of the Macrovoices appearance of a deflationist. Townsend accepted the data as presented but disagreed on the outcome being deflation for reasons he explains after the interview.

Deflationist David Rosenberg argues that the data does not support the inflation argument (at least in the U.S.)

Quote

We went into this pandemic, if you don't mind me saying so. And I will throw the question back with unemployment rates among minority groups and the youth and women, the lowest levels on record. So explain to me again, what was broken, we had a 10 year economic cycle. And we had the lowest unemployment rate of three and a half percent in 50 years. And at the peak inflation was barely more than 2%. So what am I missing exactly in terms of this so called regime change that we're seeing right now? How is that going to cause inflation? So you get these people out there and these are smart people. They are economists, these are people I know. Many I'm friends with who will tell you well look at the money supply numbers. But I come back and say but for the past 20 years, the money supply numbers have had no correlation with anything except maybe asset prices. And you're quite right. We've had dramatic asset inflation. Well, look, there's different ways even regulatory, that we can deal with that. That's a big problem. But you cannot predict inflation with just the money supply because you have to take a look at money velocity and money velocity has been contracting for decades because we're choking on too much debt. And it has impaired the credit multiplier. So I don't see that that's changed. Money supply against money velocity is not leading right now to an inflationary conclusion

Quote

But let me just tell you that if you have productivity running over 4%, and let's say that that's what the data are showing right now. You could have wages running at 5% and they're not even running at 5% yet and you still wouldn't get the inflation. Because what drives inflation is productivity adjusted wages, not nominal wages on their own. And I can't believe how many people can't wrap that simple economic theory around their head. And so they come out and say, well, you know, and look at the fiscal stimulus. All the fiscal stimulus, yes, indeed, we have rampant deficits. But you can't take a look at the overall inflation and interest rates without looking at National Savings. This is the problem people had in Japan, who basically paved more riverbeds and built more bridges to nowhere in the name of fiscal stimulus than Japan where they've had blow of fiscal deficits for 20 years. And yet, look what interest rates and inflation have done there. Because nobody pays attention to what's happened with private sector savings, which has been an offset to the de-savings in the public sector. So everybody's taking this very myopic and narrow view and what drives inflation and what drives interest rates. So you can't look at fiscal policy, without looking at the context of what's happening in the household sector and in the business sector. You look at the business sector, there's been a negative financing gap of over $100 billion in the past year. Companies and there was an article on the front page of The Wall Street Journal the other day, and now companies are retaining cash on their balance sheet. Okay, so I'm taking a look at retained earnings, and taking a look at corporate cash flows, and take a look at capital spending intentions. There's no signs here that the corporate sector is doing anything but raising its defacto savings rate. And what about the household sector everybody's talking about? Well, look at this 30% personal savings rate that's out there, that's dry powder for future spending. Well, I don't know, that didn't work so well with April retail sales did it? It didn't. And so we don't know where the personal savings rate is going to end up. What we do know and the New York Fed has done the work for us is the New York Fed has shown that only one quarter of these stimulus checks and there's been three rounds so far dating back to last year have gotten into the real economy. The other three quarters are split pretty evenly between savings and a lot of that savings is indeed going into the market, which is why you've had this explosion of Reddit accounts and Robin Hood accounts. But a third of the money is going to pay down debt. I'm looking at the bank lending numbers and look at the bank lending reports. The banks beat their earnings. Yes, capital markets activity, wealth management trading. Look at the loan books of the major banks in the United States, they're shrinking. There's credit contraction in the private sector. You've seen it in the bank lending data. So what I'm saying is that you have to take a real holistic view. Inflation as is the case with most broad economic variables it's very complex. But I'm just finding people are either doing partial equilibrium analysis or they're just taking a very narrow view to what ultimately is going to drive inflation down the road.

I have no idea which camp is correct but it seems the inflationist view is predominating with only a few deflationists left.

Link to comment
Share on other sites

Transistor Man
1 hour ago, AWW said:

Not as well off as if they'd put those BTL deposits into, say, AAPL.

And that’s called being really lucky.

Link to comment
Share on other sites

2 hours ago, Erewhon888 said:

The link below should point to the transcript of the Macrovoices appearance of a deflationist. Townsend accepted the data as presented but disagreed on the outcome being deflation for reasons he explains after the interview.

Deflationist David Rosenberg argues that the data does not support the inflation argument (at least in the U.S.)

I have no idea which camp is correct but it seems the inflationist view is predominating with only a few deflationists left.

Just go to the Supermarket or put fuel in your car and make your mind up.

As someone said on another thread a Tesla or a phone might be cheaper, but what you need to get by in life is on its way up.

Link to comment
Share on other sites

1 hour ago, Hancock said:

Just go to the Supermarket or put fuel in your car and make your mind up.

As someone said on another thread a Tesla or a phone might be cheaper, but what you need to get by in life is on its way up.

I see Lynn Alden agrees with me (I said it first right here!) that this so called temporary inflation might be sticky and become permanent.  Seen it before.  The narrative about a correcting one-off seems disingenuous (central banks) or lacking experience (others).  I would also add the potential for retrenched companies to chase quality of earnings rather than volume, further supporting higher prices.

Link to comment
Share on other sites

Just now, Harley said:

I see Lynn Alden agrees with me (I said it first right here!) that this so called temporary inflation might be sticky and become permanent.  Seen it before.  The narrative about a one-off seems disingenuous (central banks) or lacking experience (others).  I would also add the potential for retrenched companies to chase quality of earnings rather than volume, further supporting higher prices.

I went to Morrisons earlier and noticed those 6 packs of Yoghurts with the chocolate cornflakes in the side have gone from £2 to £2.25, a 12% jump overnight, they no longer claim them to be on sale anymore its just "the price".

A place where i go for flat iron steak has put the price up from £13 to £18 (so i wont be returning).

Food price inflation is rampant (though not as relevant to the £30-50k more for that 3 bed semi!)

 

Link to comment
Share on other sites

14 hours ago, planit said:

I have thought about this but the problem is how could anyone trust China? 

How can anyone trust the Tory government? 

Every word they say is a lie, all the markets are rigged.. They are still letting Indian covid in.. They are mass murdering corrupt bastards.. who want to take our freedoms and steel all our money!

Link to comment
Share on other sites

Crypto seems to have done its job well as I expected (stimmy speculation truck run off ramp/sink overflow analogy), contagion to rest of economy and markets seems minimal.

However, we might be seeing the early innings of a policy mistake (or several) across the pond, as it seems the pace of recovery is starting to spook Biden et Al, and he's starting to reduce investment sums in his almighty infrastructure plans. If this is the case, and if stimmy cheques do indeed end in September, we might see a market event around that time, although I'd imagine it would be fairly short and sharp.

Link to comment
Share on other sites

jamtomorrow
8 hours ago, Hancock said:

I went to Morrisons earlier and noticed those 6 packs of Yoghurts with the chocolate cornflakes in the side have gone from £2 to £2.25, a 12% jump overnight, they no longer claim them to be on sale anymore its just "the price".

A place where i go for flat iron steak has put the price up from £13 to £18 (so i wont be returning).

Food price inflation is rampant (though not as relevant to the £30-50k more for that 3 bed semi!)

 

No doubt at all in my mind we're seeing a big cost-push inflation impulse unfolding right in front of us.

The interesting part is what happens with wages. Those remarks on productivity chime with my own thinking: your wages/salary only go up if the jobs market in your sector is tilted in favour of the employee, and that does depend somewhat on productivity and automation (we've talked before about the opportunity to automate when/if manufacturing is re-shored).

Not once in my working life has "but my living expenses are going up" worked as a negotiating ploy for a pay rise (and sorry to say I tried that once, when I was young and foolish). What does work is the realised threat or act of changing jobs, and that boils down to supply and demand in the jobs market.

To be clear: I have no doubt the cost-push impulse will stick, but I do wonder about the wage effects. It's very tempting to conflate the permanent cost-push uptick with McJob employees refusing to work while there's stimmy in the pot. Both effects are ccertainly the end result of two prongs of the same policy direction, I'm just not yet convinced the wage effects will stick.

Link to comment
Share on other sites

9 hours ago, macca said:

How can anyone trust the Tory government? 

Every word they say is a lie, all the markets are rigged.. They are still letting Indian covid in.. They are mass murdering corrupt bastards.. who want to take our freedoms and steel all our money!

Any government?

You are over investing in the idea of Labour being some sort of political saviour.

They are not.

This is standards Labour tactics of the 80s - the Conservatives are terrible, vote Labour because ....

You need to be designing Pols out of governance,. not replacing hem with ones that say what you want to heer.

 

 

Link to comment
Share on other sites

JimmyTheBruce

Well they're certainly pushing the narrative from all angles:

https://reut.rs/3wBsjZx

It seems we've gone beyond questioning why on earth the BoE is buying the bonds of private companies, it's now a question of whether that gives them the power to force the political agenda.  Weird.

The other strange bit in that article is the woke comment from Positive Money.  I remembered seeing stuff from them in the past (I think with Steve Baker) which appeared to be genuinely trying to get a proper debate going about the monetary system and the issues with FRB.  A quick look at their site now suggests that all such problems will be resolved if we appoint more BAME women to the BoE.  When did they get subverted?

Link to comment
Share on other sites

I've been thinking about this, and I think there must be a "trickle down" effect when it comes to wage inflation. The highest paid jobs are, with some exceptions, those with the lowest supply of labour. I would have thought those jobs are where you would expect wage inflation to manifest itself first, due to tighter labour supply. IT pay is most definitely on the increase in the south east, around 10% up on last year. I wonder how long before those increases are seen in lower paid industries? Anyone have any theories or stats to share?

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...