Credit deflation and the reflation cycle to come (part 9)

[geordie_lurch]

12 hours ago, sleepwello'nights said:

I've asked in the past the question "what is money" and never had a reply. 

Best explanation of money I've ever read inc all the stuff about Cyprus etc @sleepwello'nights is on a weird but very interesting site here: https://reevolution.earth/kb/money/

[sleepwello'nights]

1 hour ago, geordie_lurch said:

Best explanation of money I've ever read inc all the stuff about Cyprus etc @sleepwello'nights is on a weird but very interesting site here: https://reevolution.earth/kb/money/

Yes I agree, but there's the conundrum. As I understand it:

The first function of money is as a means of exchange. You exchange your asset, be it your labour or something you've made or acquired for something else you need or want. Economics 101.

Then it becomes a store of wealth you set aside a part of your labour by deferring consumption so that you can later exchange it for something you need or desire. 

Later it becomes a means of control and consequently power. You can use your money to pay someone to do something you want them to do for you. 

So far I understand it and its meaning for sums that an individual can generate.Its meaningful to me for sums that I can contemplate. When it comes to the vast sums available to individuals, organisations and governments then I lose sense of its meaning.

Imagine you're as wealthy as Bill Gates. You can get up in the morning buy everything you want and when you go to bed you have more money than you started the day with. What would that do to you. 

Reviewing what I've written looks to me as if I've answered my own question..

[Pip321]

4 hours ago, Mapper said:

I know people on here get it, but the average person does not, so I think it is always worth reminding ourselves of.

Doesn't matter how much "money" anybody has without the energy and natural resources to back it up.

It's tragic enough that most people think money grows on trees, but they think energy does too.

I absolutely take your point. But I just had to add…..technically some energy does grow on trees😆

Re money: it’s an interesting conversion of labour, real assets, services etc into a store of wealth for immediate exchange or future purchases. Once we think that that money is pounds/dollars and someone can just ‘make’ those pounds/dollars it begins to turn to shit.

All you can do in the normal run of things is play the game, keep up with the printing……and if a true currency crash comes then hopefully have another store of wealth as a hedge.

Of course the other option is to have the basics ie unencumbered house, food, heat, some stuff and a decent real skill/job and fuck all saved. 

Edited May 5 by Pip321

[DurhamBorn]

Money is the means to exchange all saved labour (real assets are also saved labour) ever produced in that Fiat currency at their preset value.As long as the supply of it goes up 1%pa but human effort and access to the earths resources increase 2% living standards improve.At the moment we are creating around 4% extra units a year in the UK ,but human effort and production is flat to slightly falling so living standards are falling by around  4%+a year as we consume past effort.However in the UK due to inflation protecting bennies and public sector pensions the whole loss of spending power is falling on a much smaller part of the population,and on my numbers the productive are falling around 6.8% a year behind the none productive.I call it a "distribution cycle" as government uses the printing to distribute others saved labour through inflation rather than direct tax.Many assets rise because they hold their value against the rising currency units ,gold of course the easy example,but to really be sure to keep ahead you need to hold assets that can leverage the extra currency units.Its why i like EM leaning asset managers,because even if wages are rising less than inflation contributions to pensions increase simply due to extra units and it leverages their profits.Turning from dis-inflation to inflation will slowly destroy lots of business models.Coffee shops a thread example this week.It also helps some areas.However the reverse is true once the inflation cycle ends,and then most of our holdings would suffer huge pain,and likely quickly.Its why spotting cycle turns makes such a huge difference to increasing net wealth.Luckily we got this huge cycle turn correct,when very very few did,so we made huge profits.The irony is i found that easy,the numbers were clear.This stage now is very dangerous,because the population are angry,and polos will look for direct theft,and more freezeing allowances inflation theft.

Edited May 5 by DurhamBorn

[Harley]

5 hours ago, Mapper said:

It's tragic enough that most people think money grows on trees, but they think energy does too.

My log stores wish to disagree! 

But I do agree! 

[Harley]

15 hours ago, PETR4 said:

I'll have a crack at this question 

At it's core it is just the accounting system of who owns what value* to whom. It only works because of legal tender laws; government demanding taxes in their own money and when you do work you get given money to account for the effort you put in for the person / organisation who gave you the cash.

*in terms of energy and resources.

The dictionary deffinition is "a current medium of exchange in the form of coins and banknotes; coins and banknotes" which for me is a description of what the medium of exchange is, not the explantion of what the medium of exchange is.

OMG, people other than me have started to talk about value!!!!!  

I'm developing a Sage complex! 

[Harley]

59 minutes ago, DurhamBorn said:

Money is the means to exchange all saved labour (real assets are also saved labour) ever produced in that Fiat currency at their preset value.As long as the supply of it goes up 1%pa but human effort and access to the earths resources increase 2% living standards improve.At the moment we are creating around 4% extra units a year in the UK ,but human effort and production is flat to slightly falling so living standards are falling by around  4%+a year as we consume past effort.However in the UK due to inflation protecting bennies and public sector pensions the whole loss of spending power is falling on a much smaller part of the population,and on my numbers the productive are falling around 6.8% a year behind the none productive.I call it a "distribution cycle" as government uses the printing to distribute others saved labour through inflation rather than direct tax.Many assets rise because they hold their value against the rising currency units ,gold of course the easy example,but to really be sure to keep ahead you need to hold assets that can leverage the extra currency units.Its why i like EM leaning asset managers,because even if wages are rising less than inflation contributions to pensions increase simply due to extra units and it leverages their profits.Turning from dis-inflation to inflation will slowly destroy lots of business models.Coffee shops a thread example this week.It also helps some areas.However the reverse is true once the inflation cycle ends,and then most of our holdings would suffer huge pain,and likely quickly.Its why spotting cycle turns makes such a huge difference to increasing net wealth.Luckily we got this huge cycle turn correct,when very very few did,so we made huge profits.The irony is i found that easy,the numbers were clear.This stage now is very dangerous,because the population are angry,and polos will look for direct theft,and more freezeing allowances inflation theft.

Morning!  Lovely day ahead!

Agreed, as far as it goes.  This, allied as it is with "value", is a massively broad and deep topic.  Most commentators are working at a superficial level and therefore don't do it justice. 

You have to go back to the original thinkers behind economics like Smith, Locke, and co.  This is the root of true economics, not the technobabble that passes as economics these days which causes so much harm by detaching the dialogue from these roots.

IMO the most productive path is to keep asking "so what" as you primarily think about value (money only being one sub topic/derivative).  That enlightened dialogue takes you to some very interesting and (this is key) practical places.

To repeat myself, the last lot of original thinkers like Smith were a product of a period of great change.  A redefinition of the "as-is" world.  Arguably we're at another such point. 

MMT and the like are a stab, but a pathetic one as we have come to expect from our current lot.

PS:  Your long held premise that "money" can be in part saved labour is beautiful and a lovely starting point to dig down from.  A moment's attention should stimulate much thought and practical focus, rather than just an academic exercise.  That is, its debasement fecking pysses me off to do something!

PPS:  By "money" I mean the current proxy (i.e. our debt based fiat) as "money" is a comparative standard (yardstick) which gets expropriated to give unfounded authenticity to the "current thing".  A somewhat subtle but important distinction.

Edited May 5 by Harley

[M S E Refugee]

I've just pointed out to the sycophantic Gary's Economics fans, that he has benefitted greatly from wealth inequality, because he should've been out of a job instead of making tons of cash as his employer, Citigroup were bailed out by the tax payer in 2009.

[baffledbyzirp]

1 hour ago, sleepwello'nights said:

Yes I agree, but there's the conundrum. As I understand it:

The first function of money is as a means of exchange. You exchange your asset, be it your labour or something you've made or acquired for something else you need or want. Economics 101.

Then it becomes a store of wealth you set aside a part of your labour by deferring consumption so that you can later exchange it for something you need or desire. 

Later it becomes a means of control and consequently power. You can use your money to pay someone to do something you want them to do for you. 

So far I understand it and its meaning for sums that an individual can generate.Its meaningful to me for sums that I can contemplate. When it comes to the vast sums available to individuals, organisations and governments then I lose sense of its meaning.

Imagine you're as wealthy as Bill Gates. You can get up in the morning buy everything you want and when you go to bed you have more money than you started the day with. What would that do to you. 

Reviewing what I've written looks to me as if I've answered my own question..

The subject is confusing and far easier to view from a micro perspective.

According to classical economic theory, trade took place originally by way of barter which was inefficient since the transaction required 'a coincidence of wants' i.e. if I had eggs and you had milk both parties to the trade would need what the other was offering to do a deal. Money is supposed to have emerged as a means to facilitate trade. In the past cattle, pelts, salt, wampum seeds, exotic feathers and sea shells, human beings, skulls, gem stones, tulip bulbs, tea, camels and in the case of the Yap people, huge limestone disks, have all served as money. There is no mechanism for establishing the original value of money so economists assume a benevolent overlord and fudge the explanation of origination.

According to Aristotle money has key characteristics; portability, fungibility/ rarity, divisibility, durability. Hey presto money is a proxy by which other goods can be acquired. It allows individuals to accumulate their wealth and provide for the future from historic endeavour.

In theory all vey good but in practice anthropological studies have never discovered any civilisations that used the barter system exclusively. Credit has always been employed. Thus all exchange has relied on trust between transacting parties. Crucially there is no need to acquire more than you or your family could feasibly consume because excessive wealth would encourage others to dispossess you in primitive contexts.

The problem arises when we move from an absolute physical ledger to paper money authorised and controlled by the state. In his book The Ascent of Money, Niall Fergusson described paper money introduced in China on tree bark and used for paying taxes. The value of notes was inflated away over time because of forgery even though possession of forged notes was punishable by death. The trust element is subject to fraud and misrepresentation. 

The forgers today are central banks who decoupled paper currency from real assets in 1971 and have subsequently debauched the petrodollar by spending what they don't have on pointless self-defeating wars. Aristotle's second criterion has been abandoned. The only restraint now on liquidity is the margin requirements stipulated by government of the banks. The Basel rules were an attempt to control excessive credit creation, but given the size of derivatives market and the paucity of oversight and enforcement the risks have not been managed effectively.

What we call money is now just fantasy dollars issued by bankrupt governments and rehypothecated endlessly by financial institutions working tirelessly for their own inevitable destruction. There is no longer a kill switch. 

Doctor Faustus is a play about generating paper money whose value is derived not from the gold held at the treasury but under ground. There is nothing new to what we are experiencing today other than the global scale of the impending default as per the French experience with Consuls and Mississippi land courtesy of John Law. The strength of official denial is positively correlated to the weakness of the system. One goes we all go. Cameron's pledges are meaningless agitprop.

[Axeman123]

What is money? Money is a useful fiction that only works as long as people beleive a complex web of contradictory things about it - and in that way it is like the nation state. When both maintain confidence they can motivate millions to cooperative efforts and raise living standards to an incredible degree, and yet both always fall when the elite they create get greedy.

[Harley]

You get taught about the characteristics/properties of "money" in about the first week of economics. 

Interesting to take time out and use these to evaluate the progress of the current proxy.

For example:

. "Store of value" = "Declining store of value".

. "Transferability" = "Transferability if we like you".

....and so on.

Not a good report card.  Act accordingly?

Edited May 5 by Harley

[sleepwello'nights]

13 minutes ago, baffledbyzirp said:

The subject is confusing and far easier to view from a micro perspective.

 

A very neat exposition.

Also money gives an insight into a persons personality. The givers, the takers, the greedy, the spendthrift, the frugal, the miserly. 

Again the real problem is people with their emotions and tempraments.

[onlyme]

29 minutes ago, M S E Refugee said:

I've just pointed out to the sycophantic Gary's Economics fans, that he has benefitted greatly from wealth inequality, because he should've been out of a job instead of making tons of cash as his employer, Citigroup were bailed out by the tax payer in 2009.

If we had let the reckless banks go bust they would have much less power and influence to get governments to push crap and benefit from things likes carbon credits.  I think there are much wider questions in regards the malign influence of the banking sector in general in regards what they will do to make money, tilt the tables and generally now not benefit the overall economy.

https://www.bloomberg.com/news/articles/2023-12-10/wall-street-banks-look-to-carbon-offsets-for-new-profits

[Harley]

15 minutes ago, baffledbyzirp said:

The subject is confusing and far easier to view from a micro perspective.

According to classical economic theory, trade took place originally by way of barter which was inefficient since the transaction required 'a coincidence of wants' i.e. if I had eggs and you had milk both parties to the trade would need what the other was offering to do a deal. Money is supposed to have emerged as a means to facilitate trade. In the past cattle, pelts, salt, wampum seeds, exotic feathers and sea shells, human beings, skulls, gem stones, tulip bulbs, tea, camels and in the case of the Yap people, huge limestone disks, have all served as money. There is no mechanism for establishing the original value of money so economists assume a benevolent overlord and fudge the explanation of origination.

According to Aristotle money has key characteristics; portability, fungibility/ rarity, divisibility, durability. Hey presto money is a proxy by which other goods can be acquired. It allows individuals to accumulate their wealth and provide for the future from historic endeavour.

In theory all vey good but in practice anthropological studies have never discovered any civilisations that used the barter system exclusively. Credit has always been employed. Thus all exchange has relied on trust between transacting parties. Crucially there is no need to acquire more than you or your family could feasibly consume because excessive wealth would encourage others to dispossess you in primitive contexts.

The problem arises when we move from an absolute physical ledger to paper money authorised and controlled by the state. In his book The Ascent of Money, Niall Fergusson described paper money introduced in China on tree bark and used for paying taxes. The value of notes was inflated away over time because of forgery even though possession of forged notes was punishable by death. The trust element is subject to fraud and misrepresentation. 

The forgers today are central banks who decoupled paper currency from real assets in 1971 and have subsequently debauched the petrodollar by spending what they don't have on pointless self-defeating wars. Aristotle's second criterion has been abandoned. The only restraint now on liquidity is the margin requirements stipulated by government of the banks. The Basel rules were an attempt to control excessive credit creation, but given the size of derivatives market and the paucity of oversight and enforcement the risks have not been managed effectively.

What we call money is now just fantasy dollars issued by bankrupt governments and rehypothecated endlessly by financial institutions working tirelessly for their own inevitable destruction. There is no longer a kill switch. 

Doctor Faustus is a play about generating paper money whose value is derived not from the gold held at the treasury but under ground. There is nothing new to what we are experiencing today other than the global scale of the impending default as per the French experience with Consuls and Mississippi land courtesy of John Law. The strength of official denial is positively correlated to the weakness of the system. One goes we all go. Cameron's pledges are meaningless agitprop.

One of the best things you've posted!  Lovely.   

Reminds me how much I enjoy engaging with the likes of Napier.  Proper economists with a respect for the lessons of history, etc rather than the current technobabble.

Library of Mistakes......!

[Harley]

29 minutes ago, baffledbyzirp said:

It allows individuals to accumulate their wealth and provide for the future from historic endeavour.

 

29 minutes ago, baffledbyzirp said:

Thus all exchange has relied on trust between transacting parties. Crucially there is no need to acquire more than you or your family could feasibly consume because excessive wealth would encourage others to dispossess you in primitive contexts.

 

Concepts which underpin the thoughts/debates of Locke and many co on the evolution and basis of society such as "mutual self interest", the Social Contract, Property Rights, etc.  

These "justify" the rule of law for some and hence, as "money" is a standard against which to asses the "current thing" (ie. fiat as a proxy), so could these be a standard for societal governance against which we can see the egregious over-reach of that particular "current thing".

Edited May 5 by Harley

[Harley]

Here's a comparative thought experiment on value and money.

What "value' does your spouse bring to you?

Maybe:

. Makes life easier in that the chores are shared (division of labour)

. Provides emotional support when you need it

. Brings in extra income to deploy elsewhere 

. Provides sexual fulfillment from and maybe fufillment in the giving

. Provides companionship and/or a means to express yourself

. Provides apparent (not yet realised) future security (e.g. look after you)

. Provides additional information on things and a more productive pov

. You like or have a perceived duty to confirm to societal, cohort, etc norms

. Provides you with a means to satisfy judged undesired urges like control 

. How incomplete is such an analysis, what things are missed?

. Etc

Now how much have you given up to attain that value (you have traded freedom/rights for a greater benefit)? Aka a social contract.

Now permeant is the construct?  And is your spouse not just a form of "money" in that you have made a particular investment/commitment but could equally, better, or worse get this combined value from another?  

"Combined value" so what sort of implicit trade offs are taking place between values and do they change?

But you stick, sometimes too long, with the "current thing".  Why?  What apparent value or other thing (uncertainty) is holding you back from change?

And so on.

Now think about your relationship with money.

Me, I love my spouse more than money.  So what.........?  Will I ever find out or will the mere pursuit itself add value to me?

Is all of it ultimately relationships to extract personalised value with the relationship being the key to study to better comprehend the nature of the value?

Technobabblist would now seek to contruct a optimised (ideally finite) utility function!

Edited May 5 by Harley

[Mapper]

2 hours ago, Harley said:

My log stores wish to disagree! 

But I do agree! 

 

3 hours ago, Pip321 said:

I absolutely take your point. But I just had to add…..technically some energy does grow on trees😆

 

I should have thought about the metaphor a little more!

[Axeman123]

1 hour ago, baffledbyzirp said:

According to classical economic theory, trade took place originally by way of barter which was inefficient since the transaction required 'a coincidence of wants' i.e. if I had eggs and you had milk both parties to the trade would need what the other was offering to do a deal. Money is supposed to have emerged as a means to facilitate trade. In the past cattle, pelts, salt, wampum seeds, exotic feathers and sea shells, human beings, skulls, gem stones, tulip bulbs, tea, camels and in the case of the Yap people, huge limestone disks, have all served as money. There is no mechanism for establishing the original value of money so economists assume a benevolent overlord and fudge the explanation of origination.

I would argue before even that the unit of account/trade was obligation. A farmer would store his excess food production "in" his children during his best producing years, so that they would feed him their excess production from their best producing years etc. Farmers having a good year would be expected to help out those having a bad one via alms or whatever, and would probably be related anyway. The fuedal obligations to a lord etc were and extension of this. They key thing however is that this all rested on personal relationships, and the verifiable balance of individuals putting in vs taking out even if there wasn't a formal accounting etc. That set a hard limit on scaling up, and money became an alternative mental model.

[Long time lurking]

 

[AWW]

16 hours ago, Mapper said:

I know people on here get it, but the average person does not, so I think it is always worth reminding ourselves of.

Doesn't matter how much "money" anybody has without the energy and natural resources to back it up.

It's tragic enough that most people think money grows on trees, but they think energy does too.

Umm... energy does grow on trees though. Or at least is captured by them

 

Edited May 5 by AWW
Double post

[Calcutta]

Well that was quite a Sunday catch-up. Sorry professors, too pissed to understand a word of it.

PS thankfully did not squash a testicle this Sunday on my ride home so it should be a productive week.

Edited May 5 by Calcutta
PS

[CannonFodder]

On 04/05/2024 at 12:00, ThoughtCriminal said:

 

I also learned recently that China builds it's merchant and fishing fleet for dual purpose. So their fishing vessels and cargo ships can be quickly fitted with missile launchers and guns. They also have reinforced decks so they can become troop carriers and assault ships. So their navy isn't 370 ships, it's around 38000.

 

38000? - Those are rookie numbers .....

They are also developing helicopter drones that can be launched from any ship deck including civilian. They will detect submarines and drop their own weapon or call in a heavier torpedo dropping aircraft if the sub is deeper.

But it's ok, the west will have 8 new Aukus submarines against 100,000 submarine hunters.

Let's have a closer look.

 

But wait there's more, from the institutional failure that is AUKUS.

https://michaelwest.com.au/correction-paul-keating-aukus-worse-than-just-the-worst-deal-in-all-history/

What's even more worrying is the US has a pull out clause that they will only support AUKUS if they have submarine capacity to spare as they are selling from active inventory and they dont.

So Aus will pay 300 billion for no Virginia class subs and some new British subs that will be late, probably leaving them with no subs for a period of time.

Similar to HS2, defence is now a basket case, can't build anything and everything is overcosted and late.

 

Ajax is a disaster.

And the yanks just cancelled their latest and third attempt for an artillery replacement to the M109 which is a Vietnam era weapon.

Of course no one will be sacked and Def contractors will make out like bandits.

But what are the warships we do build, surely they are quality you mat say.

Let's compare the commissioning and disposal dates of this fine warship below

[sancho panza]

Intersting last sentence

'The gold market is simply not large enough to absorb all of the capital that China has parked overseas.'

well not at $2400 per ounce............

 

https://uk.news.yahoo.com/china-gold-buying-spree-could-150000524.html

China’s gold-buying spree could be the straw that breaks the dollar’s back

Historically, the dollar has been the reserve currency of choice because of some clear advantages over potential alternatives.

It helps too that so much of global trade still takes place in dollars. The prices of key commodities are priced in the US currency, including oil, metals and grains, and the dollar is welcomed as a means of payment almost anywhere in the world.

And yet, cracks are starting to appear.

One that has been growing for some time is the gradual diversification by central banks, which have been reducing the share of foreign currency reserves they hold in US assets (mainly Treasury bonds).

IMF data suggest that this proportion fell to a 25-year low of 59pc at the end of 2020, compared to 71pc in 1999.

In turn, this has depressed the dollar value of reserves held in other currencies. Beneath the surface, though, the diversification out of US assets has continued.

As part of this trend, central banks have been adding to their holdings of gold. The People’s Bank of China (PBOC) has been at the forefront here, with official data showing that March was the 17th successive month of net purchases. Industry insiders suspect there has been a large amount of covert buying by the authorities too.

This is not necessarily anything sinister. It could simply be that the PBOC is a shrewd investor, capitalising on gold’s traditional appeal as a safe haven, a hedge against inflation and a means to diversify risk.

The Chinese authorities may just have been playing a rising market extremely well.

It is worth noting too that private Chinese citizens have also been enthusiastic buyers of gold as a way to get around the country’s strict capital controls, and at a time when domestic equity and property markets have been performing poorly.

Nor is China alone. According to the latest official data, Turkey actually bought more gold in the first three months of this year (about 30 metric tonnes) than China (27 tonnes), with India (18.5 tonnes) not that far behind.

But there may still be a lot more to this story. There are clear strategic advantages to China diversifying out of US assets, largely given rising geopolitical tensions over Taiwan and Beijing’s growing assertiveness in the South China Sea.

China’s stockpiling of gold could also be a warning that the country could use its large holdings of US government bonds as a weapon.

Any threat to dump these bonds could drive up the cost of borrowing, not just in the US but also in the rest of the Western world.

The gold market is simply not large enough to absorb all of the capital that China has parked overseas.'

 

---

[Errol]

13 minutes ago, sancho panza said:

Intersting last sentence

'The gold market is simply not large enough to absorb all of the capital that China has parked overseas.'

well not at $2400 per ounce............

 

https://uk.news.yahoo.com/china-gold-buying-spree-could-150000524.html

China’s gold-buying spree could be the straw that breaks the dollar’s back

Historically, the dollar has been the reserve currency of choice because of some clear advantages over potential alternatives.

It helps too that so much of global trade still takes place in dollars. The prices of key commodities are priced in the US currency, including oil, metals and grains, and the dollar is welcomed as a means of payment almost anywhere in the world.

And yet, cracks are starting to appear.

One that has been growing for some time is the gradual diversification by central banks, which have been reducing the share of foreign currency reserves they hold in US assets (mainly Treasury bonds).

IMF data suggest that this proportion fell to a 25-year low of 59pc at the end of 2020, compared to 71pc in 1999.

In turn, this has depressed the dollar value of reserves held in other currencies. Beneath the surface, though, the diversification out of US assets has continued.

As part of this trend, central banks have been adding to their holdings of gold. The People’s Bank of China (PBOC) has been at the forefront here, with official data showing that March was the 17th successive month of net purchases. Industry insiders suspect there has been a large amount of covert buying by the authorities too.

This is not necessarily anything sinister. It could simply be that the PBOC is a shrewd investor, capitalising on gold’s traditional appeal as a safe haven, a hedge against inflation and a means to diversify risk.

The Chinese authorities may just have been playing a rising market extremely well.

It is worth noting too that private Chinese citizens have also been enthusiastic buyers of gold as a way to get around the country’s strict capital controls, and at a time when domestic equity and property markets have been performing poorly.

Nor is China alone. According to the latest official data, Turkey actually bought more gold in the first three months of this year (about 30 metric tonnes) than China (27 tonnes), with India (18.5 tonnes) not that far behind.

But there may still be a lot more to this story. There are clear strategic advantages to China diversifying out of US assets, largely given rising geopolitical tensions over Taiwan and Beijing’s growing assertiveness in the South China Sea.

China’s stockpiling of gold could also be a warning that the country could use its large holdings of US government bonds as a weapon.

Any threat to dump these bonds could drive up the cost of borrowing, not just in the US but also in the rest of the Western world.

The gold market is simply not large enough to absorb all of the capital that China has parked overseas.'

 

---

Gold at $20,000 would be a start.

[tank]

15 hours ago, M S E Refugee said:

I've just pointed out to the sycophantic Gary's Economics fans, that he has benefitted greatly from wealth inequality, because he should've been out of a job instead of making tons of cash as his employer, Citigroup were bailed out by the tax payer in 2009.

His views won't go down well with many on here or the other site but he's been bang on in his assessment of asset prices in recent years.

My general view is similar to his in the sense that I believe asset prices will keep increasing as money is devalued by systemic inflation.

Edited May 6 by tank