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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 03:58 PM   #41
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by Laurence
The last period of true deflation was the great depression, no?* And at the point it kicked in, things already really stunk...
Well, that was the last period in the US, and it was one of the main reasons we got off the gold standard. Having a gold-backed currency meant that we had no flexibility in monetary policy, and money got too tight.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 04:28 PM   #42
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Re: Volker, Greenspan and Donner, Too

I am generally not a doom and gloom type WRT investing. However, I will note that galloping commodities prices, steadily rising short term interest rates, foreign wars, and a tapped out gummint look an awful lot like a possible case of stagflation or recession. If we have a short term blip in energy and other prices, it won't manke much of a difference. A prolonged commodity shortage coupled with Fed rate raising to try to keep a lid on inflation could be pretty painful.

Based on what I have heard from a long time observer of the oil and gas industry, this winter is unlikely to show no let up in energy prices. This and the nearly inverted yield curve have me a bit worried. I sold off my most premium priicced equity position, and I am strongly considering either further trimming my exposure or putting a hedge in place.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 04:30 PM   #43
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by wabmester
Could somebody explain the argument for deflation to me?
http://globaleconomicanalysis.blogsp...-heats-up.html

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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 06:21 PM   #44
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Re: Volker, Greenspan and Donner, Too

I'm digging through my closet to find my old WIN Button from the days of Jimmy Carter (WHIP INFLATION NOW). I remember mile long lines at gas stations, hostages in IRAN, mortgage rates of 15%, and a prime of 21%. Anybody remember who was chair of the FED then?
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 06:39 PM   #45
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Re: Volker, Greenspan and Donner, Too

WIN was from the Ford admin, an idea attributed to non other than Alan Greenspan, chairman of the Council of Economic Advisors. Also, I believe Arthur Burns was Fed chairman (70-78), followed by Paul Volcker (79-87), then Alan Greenspan.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 06:53 PM   #46
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by Have Funds, Will Retire
WIN was from the Ford admin, an idea attributed to non other than Alan Greenspan, chairman of the Council of Economic Advisors. Also, I believe Arthur Burns was Fed chairman (70-78), followed by Paul Volcker (79-87), then Alan Greenspan.
Arthur F. Burns (February 1, 1970 January 31, 1978)
G. William Miller (March 8, 1978 August 6, 1979)
Paul A. Volcker (August 6, 1979 August 11, 1987)

(I looked it up, yea)
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:01 PM   #47
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by SteveL
I'm digging through my closet to find my old WIN Button from the days of Jimmy Carter (WHIP INFLATION NOW).* I remember mile long lines at gas stations, hostages in IRAN, mortgage rates of 15%, and a prime of 21%.* Anybody remember who was chair of the FED then?
SteveL: *Those are times I'd like to forget.

I believe Burns was Fed Chairmen early on in those days, but "Big Paul Volker", in 1979 took over the reins, and allowed the interest rates to
rise to the above heights in an effort to kill inflation. *He was successful, after a helluva lot of pain.

The rest is history. *We started the amazing bull run in both stocks and bonds, (1982) until present.

To go through that once in a lifetime is more than enough, but I am personally a little concerned that I may get "seconds on the chow line".
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:05 PM   #48
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by ex-Jarhead
To go through that once in a lifetime is more than enough, but I am personally a little concerned that I may get "seconds on the chow line".
And the only thing on the menu is SOS... :P

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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:10 PM   #49
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Re: Volker, Greenspan and Donner, Too

My Econ 1A text, many years ago, was by P. Samuelson, and what I remember was the part about Guns and Butter that we had such a hard lesson on during the Vietnam War. I no longer hear the daily reports on the money supply that used to be a part of the news. I used to think that the Commerce Dept overstated inflation, but now, I think it is understated. These problems seem to keep coming around but the lessons of the past are not remembered.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:11 PM   #50
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Re: Volker, Greenspan and Donner, Too

Today, I went shopping for winter gear. *The shops along Michigan Ave were deserted at 2 PM. *

Bloomingdales is 5-6 floors and each floor could not have had more than 4-5 shoppers.

Marshall Fields 8 floors of no shoppers.

Wow, this looks bad to me. *Maybe I don't shop enough to know but how does a multi-million dollar store survive with that level of traffic? *Bad economy ahead.

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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:24 PM   #51
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by REWahoo!
And the only thing on the menu is SOS... :P

REW
REW: Believe it or not, that became (eventually my favorite breakfast). Which may explain a lot about mom's cooking.

But just any old SOS wouldn't do. Had to be the Marine Corps. style. I had the Army's and the Navys. No comparison.

Ours was so thick that the KP guy had to take a full swing to get it off his spoon and onto your toast. Um Um Good.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:30 PM   #52
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by DanTien
I'm on the Boca burger diet... :P
Try Gardenburger instead--"flame-grilled" tastes best to me.

(Disclosure: *I own 1000 shares of this stock valued at about a whopping $70, with a cost of $150. *I liked how the burger tasted so I splurged* and bought stock in it. *Silly, I know.)
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:31 PM   #53
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by ex-Jarhead
But just any old SOS wouldn't do. Had to be the Marine Corps. style. I had the Army's and the Navys. No comparison.
Hmmm. The USAF style wasn't quite that heavy. Guess the chow hall was just doing their part to help insure we could get airborne.

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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:43 PM   #54
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Re: Volker, Greenspan and Donner, Too

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Originally Posted by flipstress
Try Gardenburger instead--"flame-grilled" tastes best to me.

(Disclosure: I own 1000 shares of this stock valued at about a whopping $70, with a cost of $150. I liked how the burger tasted so I splurged and bought stock in it. Silly, I know.)
flipstress - I'll help out and buy a couple boxes I wonder who owns BOCA...Right now I really lay on the condiments...I'm able to eat their All-American Flame-Grilled meatless burgers..."We make BOCA Meatless Burgers with nutritious soy...today's smart choice for protein that has all the taste(of soy) you love, without the fat and cholesterol of a ground beef hamburger."
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 07:53 PM   #55
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Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by ex-Jarhead
SteveL: *Those are times I'd like to forget.

I believe Burns was Fed Chairmen early on in those days, but "Big Paul Volker", in 1979 took over the reins, and allowed the interest rates to
rise to the above heights in an effort to kill inflation. *He was successful, after a helluva lot of pain.

The rest is history. *We started the amazing bull run in both stocks and bonds, (1982) until present.

To go through that once in a lifetime is more than enough, but I am personally a little concerned that I may get "seconds on the chow line".
Jar head--

* * * * You have said a mouthfull in your own straightrforward way. *It was a helluva lot of pain, indeed.
Younger members on the board simply can't remember or relate to that pain. *I don't ever want to experience those stagflation days again. *Talk about a retirement killer!

* * * * Volker was a classic Keynesian. *He believed that the way to deal with inflation was from the demand side.
If inflation is defined as too much money chasing too few goods then the answer is to cut demand. *How do you cut demand? *You sacrifice employment, drive up unemployment and cut demand. *Supply and demand come back into balanceand inflation is licked. *His tool for makinig it happen? *Dry up the money supply. *Unlike
Greenspan he didn't focus on interest rates. *He targetted money supply. * As the supply of money, the fuel of inflation dried up interest rates went through the roof and in to the cloud cover. *Volker watched it happen cool as a cucmber. *Unemployment, high interest rates broke the back of inflation. *A helluva lot of pain, indeed.

* * * * Along came Reagan with his group of economic advisers who took a different tack at the problem of inflation -- the supply siders. *If inflation is defined as too much money chasing too few goods then the answer is to produce more goods. *More supply and supply and demand come in to balance and inflation is licked. *Their tool for making it happen? *Tax cuts and incentives for business to produce more. *Supply side has been the dominant theory for managing the economy since. *But I believe the supply siders have run out of room. *Our problem is not undercapacity. *Manufacturing capacity is being shuttered all over the globe, not jsut in the U.S. *

* * * * *If inflation re-ignites, which I kinda doubt, supply side solutions won't be the answer. *They are going to have to roll out Big Paul or his clone to dust off the demand side solution of strangling the economy by cutting the money supply, driving interest rates through the roof, jacking unemployment and wielding a mean monetary ax.
A helluva lot of pain, indeed. *But it will be retirees who will need that kind of medicine worst of all. *I vote for Paul Volker for next Fed Chairman. *I KNOW he will not dilly, dally with inflationary psychology. *He will kill it in the cradle.
The hard way. *To save us all a helluva lot of pain, indeed.

Donner


* * * * *
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 08:58 PM   #56
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Re: Volker, Greenspan and Donner, Too

I think the tough medicine approach was right, but the 82 recovery might be more the result of the aftermath of the last big spike in oil prices. When the price went way up, there turned out to be a lot more supply, price of oil fell, and we had very low oil prices until the last three or four years. I wonder if the boom of 82 wasn't more due to the low cost energy than anything else.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 09:31 PM   #57
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Re: Volker, Greenspan and Donner, Too

We may need some Volker but I have a feeling we going to get some Snow in January.


Dan
Veggie burgers are 9.00 a box here. We use half meat, half (heavy) tofu, and an egg to make semi-veggie burgers. Not too bad.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 09:35 PM   #58
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Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by flipstress
Try Gardenburger instead--"flame-grilled" tastes best to me.
morningstar farms for me
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 09:52 PM   #59
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Re: Volker, Greenspan and Donner, Too

Make mine beef!!

Fresh hs grad in 1972, and ne'er do well for much of the 70s, I remember the first oil crisis in 73-73, followed by 10+ years of recession in so. Indiana, aka the Rust Belt. Things got ugly...

I remember buying a 10% 1-yr CD as late as 1987 or so.

Still doing the slice/dice/julienne, including 20% bond funds (TIP, short-term), *10% GLD/VGPMX/PCL/FRO, 10% RE (RWR/IGR), 10% LCB, 10% SCB, 10% MCSI/EAFE, 10% VEIEX, 5% SCV, 5% putz, and have 10% cash, and new money and divs to cash for now, to build cash reserve for more value/div purchases when stocks go on sale. *8)

Accumulation for 5-10 yrs still... *Not really RE, but should be adequately FI by then!!?? *I feel good for sideways or up trend, but may adjust if "things get ugly" again.
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Re: Volker, Greenspan and Donner, Too
Old 08-30-2005, 10:12 PM   #60
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Re: Volker, Greenspan and Donner, Too

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Dan
Veggie burgers are 9.00 a box here. We use half meat, half (heavy) tofu, and an egg to make semi-veggie burgers. Not too bad.
I didn't realize how good I had it...SuperTarget - around $2.50 for 4 of my precious beauties....why don't you invite me over for dinner soon..I'll sneek out tell the wife I'm going out for more soy milk and burgers and I'll hop on over to your place...ah, eggs....
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