What's so bad about deflation?

Discussion in 'Economics' started by The Kin, Nov 10, 2005.

  1. You've added the multiplying effect of reserves ...the original sin.

    But it ain't monopoly money, as long as I can buy 2 years from now a Trojan for $3, which is worth $3 today, I'm OK and the banks too, for somewhat different reasons though...
     
    #21     Nov 15, 2005
  2. The People's bank of China, their CB, has a special charter, --to assure the employment of the 800 million Chinese waiting in the sidelines.

    So, local mortgage loans, are converted into Mortgage Backed Securities, which is now one of the PBoC prefered investments, in 2 seconds flat.

    Local banks are very happy with their cut, to collect their fees from servicing the loan --and they have nothing to lose if the loan goes sour.

    The bank executives are indeed not only happier, but have no worries at all...

    Of course, the PBoC has a solid guarantee, your house and mine...
     
    #22     Nov 15, 2005
  3. Well how much does it cost to buy a Coke out of the machine now, compared with 10 years ago... I don't have a reliable source for backtesting a trojan, otherwise I bet we are paying more for the same product than we used to. :D :D

    Bottom line, Jamie Dimon is going to make a lot of money at JPM!
     
    #23     Nov 15, 2005