Who buys the "Long term deflationary spiral"?

Discussion in 'Economics' started by scriabinop23, Dec 25, 2008.

  1. Come on... You can do better than that.

    The amount of quantitative easing and stimulation matters. ie, popular consensus is that Japan did everything they could, but if you look at actual Japanese money supply data, you will see from 1990 to present that the United States actually outprinted the Japanese.

    So my point stands. Give me some good data. Just because they did it doesn't mean they designed the program successfully. ie, if the Federal government did $100M of money printing and $100M of fiscal stimulus today, of course it wouldn't make a difference. The correct magnitude of stimulus is something the naysayers don't talk about (because I don't think it is in their interest to look at things quantitatively - they are too busy betting on cash and treasury bonds to argue such things).
     
    #11     Dec 25, 2008
  2. Quant easing = politically correct word for money printing.
     
    #12     Dec 25, 2008
  3. harkm

    harkm

    Here is a quote from Bananke's Deflation Speech in 2002

    Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.

    It appears Bernanke would rather have the alternative. He will print money until deflation is reversed.
     
    #13     Dec 25, 2008
  4. If I believe strongly in the deflationary path, and you do not, how is it in my financial interest to help you understand why? If anything, helping you get on the right side of this issue can only diminish the potential profits for me.

    So what's my payoff?

    Sorry to put it in such mercenary terms, but after all, we are all traders here...
     
    #14     Dec 25, 2008

  5. Why after five years of relentless inflation in every asset class on earth are people still obsessed with inflation? We had huge inflationary boom followed by a huge deflationary bust. Why would the bond market blow out now? It should have blown out years ago.
     
    #15     Dec 25, 2008
  6. What makes you think me being on the same side of the issue as you will have any effect on your profits? I'm a tiny guy in this market, maybe smaller than you.

    With that, I'm not convinced yet you can even support your argument if you tried.
     
    #16     Dec 25, 2008
  7. I'm quite ok with that. :)

    And BTW, best wishes for the holiday season.
     
    #17     Dec 25, 2008
  8. Happy holidays.
     
    #18     Dec 25, 2008
  9. 

the deflationary spiral is no longer an issue since the fed can print an arbitrary amount of money to offset deflation. Also, core consumer prices are very stubborn which is why the price of groceries has barley budged despite commodities and equities crashing.
     
    #20     Dec 25, 2008