Credit deflation and the reflation cycle to come (part 3)

[Harley]

6 hours ago, wherebee said:

I've got my PSLV 15k sitting there nice and steady.  Sometimes up 5%, sometime down 5%.  It's insurance - when it blows, I really think it will blow big.  Hopefully at the same time as a crash in fiat based stocks.  Plan is to sell the PSVL and rotate into divvie stocks like BAT, especially if they have gone down a bit.

Tidy!

[ThoughtCriminal]

The Fed is now giving dietary advice. Trade your turkey for Soybeans you fucking peasants! 

 

What a time to be alive 😂

[leonardratso]

6 minutes ago, ThoughtCriminal said:

The Fed is now giving dietary advice. Trade your turkey for Soybeans you fucking peasants! 

 

What a time to be alive 😂

i wonder who writes and even who signs off on this kind of shit.

Its a real waste of effort and is just filler.

[ThoughtCriminal]

41 minutes ago, leonardratso said:

i wonder who writes and even who signs off on this kind of shit.

Its a real waste of effort and is just filler.

It's the same reasoning behind Essex police tweeting a pic this morning of the chief constable in front of a rainbow flag talking about the imaginary genocide against trannies.

 

Government organisations should be banned from social media.

 

Although in the case of the Fed the subtext is "Don't worry about inflation, learn to eat shit instead".

 

 

[Loki]

1 hour ago, ThoughtCriminal said:

It's the same reasoning behind Essex police tweeting a pic this morning of the chief constable in front of a rainbow flag talking about the imaginary genocide against trannies.

 

Government organisations should be banned from social media.

 

Although in the case of the Fed the subtext is "Don't worry about inflation, learn to eat shit instead".

 

 

It's what happens when you think calories/"Protein" are fungible.  And as for what they left out of their tweet...

[Castlevania]

7 hours ago, Mapper said:

I am not an expert, but I think understand his point of view.

He is saying that:

1. The monetary system is bank centred. Banks create new money supply.
2. There has been no increase in bank lending so,
3. There has been no increase in the money supply.
4. Thus, the current inflation cannot be due to an increase in the money supply.

If the money supply is constant, then price increases in one area will naturally mean price decreases in another area.

Central banks have stepped in and increased the money supply via QE or am I misunderstanding something here?

[Castlevania]

14 minutes ago, Loki said:

It's what happens when you think calories/"Protein" are fungible.  And as for what they left out of their tweet...

Inflation is measured as a basket of goods. If everyone was to substitute a turkey with soy then the basket is much cheaper and there is no inflation.

[SpectrumFX]

Just now, Castlevania said:

Inflation is measured as a basket of goods. If everyone was to substitute a turkey with soy then the basket is much cheaper and there is no inflation.

Pay no attention to the inflation behind the curtain

[ThoughtCriminal]

41 minutes ago, Loki said:

It's what happens when you think calories/"Protein" are fungible.  And as for what they left out of their tweet...

Absolutely. Try going to the gym for a year with soy as your main protein source, it wont end well.

 

I can see how communism becomes attractive now because I would happily see everyone of these fuckers swinging from a lamp post.

[Loki]

29 minutes ago, ThoughtCriminal said:

I can see how communism becomes attractive now because I would happily see everyone of these fuckers swinging from a lamp post

Everyone on this thread is a Kulak I'm afraid!

[jamtomorrow]

22 minutes ago, ThoughtCriminal said:

Absolutely. Try going to the gym for a year with soy as your main protein source, it wont end well.

Well that got me wondering, and vegan bodybuilding is indeed "a thing": https://www.greatveganathletes.com/category/vegan-bodybuilders/

[ThoughtCriminal]

14 minutes ago, jamtomorrow said:

Well that got me wondering, and vegan bodybuilding is indeed "a thing": https://www.greatveganathletes.com/category/vegan-bodybuilders/

It is. And they're all juiced to the gills.

 

Which is fucking hilarious when you consider their reason for being vegan is claimed health benefits. 🤦😂

[ThoughtCriminal]

🤣🤣🤣

 

Damn I love Twitter.

[CannonFodder]

1 hour ago, Castlevania said:

Inflation is measured as a basket of goods. If everyone was to substitute a turkey with soy then the basket is much cheaper and there is no inflation.

Hedonic adjustment by the Fed soon!

Remember the nutritional values of top soil comrade.

[Bilbo]

Tell me again what's going to happen to interest rates.

https://www.dailymail.co.uk/news/article-10225599/Borrowers-fix-mortgage-three-cent-30-years.html

 

[Boon]

Devil will be in the detail with that.

Few people go in for the 10-year fix because it may be anticipated they may need to move in that period. 

A 30-year deal and a ERC of say, 5%? If interest rates rise and price rises moderate and even fall, that ERC may cause even more mortgage prisoners even though people know what they are signing up for.

I rather think we may get to a point where the market starts dictating interest rates rather than the central banks. It's like pushing a football underwater, as you get deeper the more force is required. If you remove that force then it pops back upward, maybe quite violently. However that doesn't have to be the end outcome, if the force is still applied the ball can be made to rise in a smoother manner.

[MrXxxx]

46 minutes ago, jamtomorrow said:

Well that got me wondering, and vegan bodybuilding is indeed "a thing": https://www.greatveganathletes.com/category/vegan-bodybuilders/

I don't know what would put me off the most, having to have a Vegan diet or having to wear the Speedos!

[Mapper]

2 hours ago, Castlevania said:

Central banks have stepped in and increased the money supply via QE or am I misunderstanding something here?

QE is not money printing in the way many people think it is.

Central banks do not increase the money supply when they do QE.

What they do is create bank reserves and use them to "buy" securites from the commercial banks.

The commercial banks then have more bank reserves and so stronger balance sheets. The idea is that the commercial banks should then lend to the public more freely, and that is how the money supply increases in the real economy, by commercial banks making loans.

The thing is the commercial banks haven't been lending into the real economy much (according to Snider). And so the money supply has not increased, thus what we are seeing now is not inflation (in the Milton Freedman sense - "Inflation is always and everywhere a monetary phenomenon").

[ThoughtCriminal]

32 minutes ago, Mapper said:

QE is not money printing in the way many people think it is.

Central banks do not increase the money supply when they do QE.

What they do is create bank reserves and use them to "buy" securites from the commercial banks.

The commercial banks then have more bank reserves and so stronger balance sheets. The idea is that the commercial banks should then lend to the public more freely, and that is how the money supply increases in the real economy, by commercial banks making loans.

The thing is the commercial banks haven't been lending into the real economy much (according to Snider). And so the money supply has not increased, thus what we are seeing now is not inflation (in the Milton Freedman sense - "Inflation is always and everywhere a monetary phenomenon").

Looks like bollocks, sounds like bollocks, walks like bollocks.

 

It's bollocks.

 

 

[Castlevania]

56 minutes ago, Mapper said:

QE is not money printing in the way many people think it is.

Central banks do not increase the money supply when they do QE.

What they do is create bank reserves and use them to "buy" securites from the commercial banks.

The commercial banks then have more bank reserves and so stronger balance sheets. The idea is that the commercial banks should then lend to the public more freely, and that is how the money supply increases in the real economy, by commercial banks making loans.

The thing is the commercial banks haven't been lending into the real economy much (according to Snider). And so the money supply has not increased, thus what we are seeing now is not inflation (in the Milton Freedman sense - "Inflation is always and everywhere a monetary phenomenon").

However, if they then use those funds to directly fund the government (monetary financing in other words) then surely that increases the money supply?

[Mapper]

45 minutes ago, Castlevania said:

However, if they then use those funds to directly fund the government (monetary financing in other words) then surely that increases the money supply?

I think that is true. The commercial banks lend to government and expand their balance sheets through increased holdings of bonds.

But (all of? a lot of?) the money that the government receives from selling bonds to the commercial banks is already spent. Their liabilities in the form of pensions and healthcare etc are massive.

[Talking Monkey]

2 hours ago, MrXxxx said:

I don't know what would put me off the most, having to have a Vegan diet or having to wear the Speedos!

What's wrong with speedos are they not cool anymore😁

[Mapper]

31 minutes ago, ThoughtCriminal said:

Looks like bollocks, sounds like bollocks, walks like bollocks.

The part about the mechanism of QE is true. Central banks do not print money and distribute it in the real economy. They create bank reserves.

The commerical banks are the ones who create loans for real people and real businesses, and so increase the money circulating in the real economy.

The inflation part... I don't know, I am just trying to explain what Snider is saying.

But, it sounds plausible to me.

[ThoughtCriminal]

20 minutes ago, Mapper said:

The part about the mechanism of QE is true. Central banks do not print money and distribute it in the real economy. They create bank reserves.

The commerical banks are the ones who create loans for real people and real businesses, and so increase the money circulating in the real economy.

The inflation part... I don't know, I am just trying to explain what Snider is saying.

But, it sounds plausible to me.

I'm not criticising you, I just think he's demonstrably wrong.

 

M2 money supply has gone stratospheric. It isn't rocket science.

 

This is just part of the leftwing establishments Inflation counterfactual narrative of "Reasons Why We're Not Really All Utter Fuckwits".

[MrXxxx]

21 minutes ago, Talking Monkey said:

What's wrong with speedos are they not cool anymore😁

That all depends on whether you have the 'Lindford' or not...for those too young to understand this euphemism here a picture to aid in its interpretation: