extremely clever. i'm also gleaning what i can from the last few years, attempting to learn from what's been done. fool me once... how does it go? With the DXY so close to all time lows over the last 2 years, it will be very interesting to see where monetary expansion can go from here. i hate to cite wiki so frequently, but how many of these conditions does the US currently satisfy? from: http://en.wikipedia.org/wiki/Chronic_inflation To accommodate chronic inflation, normal economic activities are disrupted: Consumers buy goods and services to avoid even higher prices; property speculation increases; businesses concentrate on short-term investments; incentives to acquire savings, insurance policies, pensions, and long-term bonds are reduced because inflation erodes their future purchasing power; governments rapidly expand spending in anticipation of inflated revenues; exporting nations suffer competitive trade disadvantages forcing them to turn to protectionism and arbitrary currency controls. also from: http://en.wikipedia.org/wiki/Hyperinflation Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following: * Outright lying as to official statistics such as money supply, inflation or reserves. * Suppression of publication of money supply statistics, or inflation indices. * Price and wage controls. * Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or similar. * Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest.
The CME should make an M3 contract available. How do I get in on the steady decline of my purchasing power directly at the source? I don't want to speculate on volatile assets or distorted and understated risk premia, I simply want a liquid, stable medium to store value and conduct exchange
You remind me of caveman that is purchasing caves thinking that people will always need a place to live and your "hard assets" are golden investments. I'd rather "cast my lot" at human ingenuity
good points, i see where you're coming from. the DXY was at an index level of 120 when bush came to office, now we sit at 84ish. 120 was a relative extreme, having only been higher from '83 to '85 I just think that by dislocating inflation so profoundly from the risk free rate, the net effect has been unbalanced accross the population. since the vast majority of the nation's wealth is concentrated in the hands of a very small percent, the net effect of an 'ownership society' has been at the expense of most americans. in the end it has been a wealth stratification policy advantaging almost entirely those who were already wealthy. the other issue with asset growth during bush's tenure is that it has been largely notional, and not real growth. i'm all for the concept of rewarding risk on competetive assets, but this is more along the lines of coersion by artificial monetary policy. by investing, i'm not expressing belief in a company or asset's competetive advantage, i'm placing trust or seeking shelter in monetary debasement i just don't like coersion. never have.
Notice what stocks did in 86 and 87 as the dollar was breaking. There's nothing new under the sun AC........
so what's the plan for the dollar folks? despite the cheerleading today, i'm sure i'm not the only one who noticed how sharply it's falling. the euro is a few good days from an all time high and the dxy is a handful of bad days from at least a 30 year low..