Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-23-2011, 07:00 PM   #41
Recycles dryer sheets
 
Join Date: Dec 2011
Posts: 388
Quote:
Originally Posted by Midpack View Post
Let's agree to disagree. You can find endless current articles, papers, books showing the correlation between money supply and inflation - though there are other factors certainly. I acknowledged it's not a foregone conclusion short term, we agree on that. In the long term, are you saying we can print money indefinitely and never be concerned about deficits and debt? That sure makes things easy, not only for us but the ECB. From the start, I referenced QE...
The people who predicted high inflation like Peter Schiff and others predicted that it would appear in 2010. He and they were flat wrong. You can keep moving the goal posts and say that it doesn't matter that inflation hasn't appeared yet, it certainly will sometime in the future. The inflationists had a theory, that the Fed expansion would create inflation, and it didn't happen. Doesn't that make you consider for just a moment that maybe that theory is wrong? Or do you not realize that what seems self-evident to you is just a theory?

In the long term yes, sure the central bank can create reserves without inflation. Look at Japan! The BOJ increased reserves by 30% of the money supply in 2001. No inflation resulted. Nada, zero, zip. Japan is back in deflation now.

The graph I posted shows not no relation between M1 and inflation. So, what is the basis for your theory that the Fed's "printing" of money will result in inflation? Why do you think that? Merely because you have heard it repeated endlessly by the likes of Peter Schiff.
__________________

__________________
Khufu is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-23-2011, 07:02 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,963
We disagree, end of story...
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 12-23-2011, 07:41 PM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
I love these sort of threads. The dogmatic approach I see put forth on ultimately unknowable macroeconomic cause and effect relationships reminds me of my boyhood indoctrination in the Catholic Church.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 12-23-2011, 11:09 PM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
The fear of inflation coming was a main reason I didnt lock up all my money on 5% CD's a couple of years ago because I just knew I would get a lot better rate by waiting! It seems if inflation really occurs to a level it jumps the bond market, then it will happen when its least expected. Then knowing my investment skills, the long bond will go to 10% then I will wait because I know it will then go to 15%, but it never does and drops shortly after and I will be kicking myself for not getting in when I should have. I finally realized a couple years ago that I am not a good prognosticator. I threw in the towel and became a boglehead asset allocator.
__________________
Mulligan is offline   Reply With Quote
Old 12-23-2011, 11:42 PM   #45
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,824
Quote:
Originally Posted by Mulligan View Post
The fear of inflation coming was a main reason I didnt lock up all my money on 5% CD's a couple of years ago because I just knew I would get a lot better rate by waiting! It seems if inflation really occurs to a level it jumps the bond market, then it will happen when its least expected. Then knowing my investment skills, the long bond will go to 10% then I will wait because I know it will then go to 15%, but it never does and drops shortly after and I will be kicking myself for not getting in when I should have. I finally realized a couple years ago that I am not a good prognosticator. I threw in the towel and became a boglehead asset allocator.
+1 The best investing moves I have made are when I am sure I am wrong, but still force myself to conform to my planned asset allocation.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 12-24-2011, 07:27 AM   #46
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,685
Whether there will be a large increase in inflation in the near future, intermediate term or deflation instead is incredibly hard to predict. That the government long term cannot long term continue with present monetary policies is undeniable.

The headwind force to inflation though is the aging population of the US. Already many individuals in their '50's are consuming their retirement savings from being laid off and reduced their demand for products. At the same time pension plans are being forced to reduce their payouts as returns are not sufficient to maintain payouts.

The industrial trends of the digital age also by it's very nature reduces the overall need for physical goods, their production and transportation (books, nagazines, newspapers, catalogues, movies, business meetings, the improved efficiencies of electricity usage as well as automotive mileage gains and teh availability of solar product all tend to reduce overall demands on production.

When you throw a growing percentage of individuals reaching their 60's with limited resources not as impacted by a need to own the latest products, the amount of consumption needed to maintain lifestyles will trend towards the shrinking of overall demand. And you need demand for inflation. This is why despite the cost of financing housing falling to all time lows there is not an offseting demand for the available housing stock. When governments are forced to begin to reduce their deficits to a reasonable percentage of GDP that will additionally be an incredible deflationary force.

And in a quirk I believe the exceptionally low interest rates are having the opposite effect overall intended as those with funds realize they must save more than they have if they are to have any chance of retiring. In June of 2007 before this mess the savings rate in the US was 2 percent and now is nearly 5 percent.

The structural design of the age curve of the population, with reduced amounts of currency available to the older and growing portion of the curve, as well as a reduction by the old geezer mentality to not need to own the latest and greatest goods are very strong reduction agents in the inflationary soup. Deflation over the long term is still very possible.
__________________
Running_Man is offline   Reply With Quote
Old 12-24-2011, 08:02 AM   #47
Recycles dryer sheets
 
Join Date: May 2010
Location: SW Ohio
Posts: 360
I am confident that most people on this forum will survive OK regardless of what the economy does or what the inflation rate is because of their financial knowledge and savy approach to life. They have the financial experience and education to adjust based on the current economic conditions, Fed policy, or market up and downs.

We are ones that funded the 401k, ira, and roths. We are the ones that change credit cards immediately when rewards go away. We are the ones that know where to put the next dollar based on current and future tax rates.

In others words we will do something vs the other 99% that will do nothing because of apathy or they just have no idea how to react. I predict most people on this forum will land on their feet and prosper relative to the other 99% no matter what the predicted or current inflation rate is.
__________________

__________________
jayc is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Need Comments on Current Bond Portfolio bamboo1947 FIRE and Money 5 09-02-2011 07:10 AM

 

 
All times are GMT -6. The time now is 01:25 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.