I agree here, but I meant monetary deflation, reduced money supply/ higher interest rates = stronger dollar with which consume more at cheaper prices as far as imports. Lower consumer prices, the robotic assembly lines and things like that increase profit margins because the savings are not passed down, which would be if anything more nominally inflationary, would it not?
Simple example, Ford has a 100 person factory, new technology allows them to replace 40 workers with machines and increase their profit margin 10%, as the savings aren't passed down to the consumer, they are kept as an increased margin, the raw material suppliers to Ford see this and raise their prices to Ford, who is then forced to raise consumer price to maintain the new margin. Ad infinitum.
Too many complex relationships here to simplify into basic if / then statements. The global economy is already on a deflationary trend. Europe is falling into recession, China likely as well, U.S. best of the bunch but barely head above water. The central banks are terrified that tight monetary policies could tip the whole thing into death spiral. Friendly advice: If you are early in your market journey, don't overfocus on the complicated nuances of macro. This is like looking for muscle definition in the gym before the basic foundation of fitness and strength is built. Focus on the basic movements, and trading opportunities born of flexibility and awareness, rather than trying to suss out the complicated stuff. If your goal is to be a trader and make money, that is.
That essay came in my Aug 17 email. Here is a public outlet: http://www.businessinsider.com/mauldin-how-change-happens-2012-8 John Mauldin's essays are long, but well worth the time: ... easy to read, exceptionally meaningful, definitely educational and hugely constructive in gaining perspective and balance in your outlook on things. You can't come away without being proud of yourself for being so much more damn smarter. You get to know HIM overtime, too. Personable, not some wonk in an ivory tower. A family man who clearly wants you to be in the know to become better informed, a better, more knowing citizen making better voting decisions and securing your family's future. His website attracts varied investors, too.
Ya must have missed my comment, kjones. You were probably composing your "mock" comment while I was posting mine ! LOL !
No worries. I want to encourage you, not discourage you. Your spirit and willingness to engage are assets. We are looking to hire future analysts and traders -- very selectively -- and it is hard to find up and comers with passion, drive and talent. These things are more important than knowledge, as knowledge can always be learned / taught. Shuttleworth nails it: http://www.markshuttleworth.com/archives/28
I've been unintentionally taking it from a sort of outside-in (time wise) approach if this makes any sense, meaning initially I did probably what everyone does and say "How did Buffet get so rich?" (before learning that he all but inherited GEICO) so I learned about value investing. I read Buffetology, The Art of Stock Arbitrage, I then read The Intelligent Investor by Graham, I've read Ron Chernow's (not market related) biographies of John D. Rockefeller and the biography of the house of JP Morgan, I've read Jim Cramer's Real Money which seems more geared towards position and swing trading, next I guess is day trading. I've been fascinated by business since I was a (younger) kid, granddad owned an HVAC company, dad owned a carpet sales/installation company from 1982-2009, uncle owns a drafting firm, aunt owns a landscaping company. I grew up in it, I love every second of it, and I want to learn all I can. That's my story. I'll be getting the Origin of Wealth pretty soon, we can talk about that after I read it.