Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Another Sign of Global Deflation
Old 01-29-2016, 07:32 AM   #1
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,070
Another Sign of Global Deflation

Quote:
The Bank of Japan surprised markets on Friday by pushing interest rates into negative territory for the first time ever. By doing so, the BOJ is essentially charging banks for parking excess funds.
Bank of Japan's negative rates are 'economic kamikaze': Boockvar

Another reason for the Fed to raise rates. If we raise rates a few more times, maybe we can have the strongest currency the world has ever seen, and the most expensive exports the world has ever produced. Perhaps companies can ship jobs overseas ever faster to generate more profits. [/sarc]

It's amazing how the Fed thinks the USA is in a vacuum... Plan on a low return environment for years to come unless we can get out of this deflation funk.
__________________

__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator 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 01-29-2016, 07:51 AM   #2
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Yes, we accuse the Fed of creating this mess and now we demand the Fed clean it up -- but not just yet. Brings to mind the words of St. Augustine of Hippo

Quote:
Da mihi castitatem et continentiam, sed noli modo
translated,
Quote:
Give me chasity and continence, but not just yet
__________________

__________________
MichaelB is offline   Reply With Quote
Another Sign of Global Deflation
Old 01-29-2016, 08:16 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,384
Another Sign of Global Deflation

About 2 years ago, it became readily apparent to me the world was in a "deflationary" mode. Low growth and addiction to low interest rates made my decision to buy higher yielding, but safe preferred stocks a no brainer for income. I won't be luckily enough a second time to know when the worm will turn. But certainly doesn't appear to be on the immediate horizon though.


Sent from my iPad using Tapatalk
__________________
Mulligan is online now   Reply With Quote
Old 01-29-2016, 09:43 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,711
Quote:
Originally Posted by Senator View Post
Bank of Japan's negative rates are 'economic kamikaze': Boockvar

Another reason for the Fed to raise rates. If we raise rates a few more times, maybe we can have the strongest currency the world has ever seen,
Wouldn't that be the time to buy my dream home in Aix en Provence?
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now   Reply With Quote
Old 01-29-2016, 10:17 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by marko View Post
Wouldn't that be the time to buy my dream home in Aix en Provence?
+1

Now if they'd just let me stay more than 180 days per year.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 01-29-2016, 10:29 AM   #6
Full time employment: Posting here.
NYEXPAT's Avatar
 
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 887
It is a boon for some of us expats. I just started SS last month and the 35k of two years ago is worth 47k today. Analysts are projecting another 7% increase before we are all said and done.
__________________
NYEXPAT is offline   Reply With Quote
Old 01-29-2016, 11:02 AM   #7
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 630
I think it will be stagnation more so than deflation, at least in the US.

I think the US will go through what Japan had endured the last few decades.
__________________
ESRwannabe is offline   Reply With Quote
Old 01-29-2016, 11:09 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
Whoa! And the ECB is already having negative interest rate for a while. Will the ECB go even deeper in the negative zone, and increase their QE? They are already buying government bonds at a rate of EUR 60B per month.

Quote:
Originally Posted by marko View Post
Wouldn't that be the time to buy my dream home in Aix en Provence?
Time to refresh your conversational French.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 01-29-2016, 11:22 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,711
Quote:
Originally Posted by Gone4Good View Post
+1

Now if they'd just let me stay more than 180 days per year.
Pretty sure all you have to do is leave the country for a few days and return. Italy is just a short drive away and the food is good!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now   Reply With Quote
Old 01-29-2016, 11:26 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
On a personal level, deflation has been reflected in goods (i.e., clothing, furniture, electronics, junk from Walmart, Amazon, etc.), but certainly not in most services (i.e., healthcare, education).
__________________
Options is offline   Reply With Quote
Old 01-29-2016, 11:39 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,328
It is an interesting world economy right now. Technological deflation is making many jobs obsolete, while one of our kids has been interviewing for tech jobs and is getting told the hours are 50 - 80 a week at some places. I guess asking if you would work 80 hours sounds a bit better than do you mind working for half price. So some workers are being replaced or making less because of disruptive technologies (Uber vs taxis drivers) and others being overworked due to a shortage of workers in the companies doing the disruption.

A world without work, or at least living wage work, is going to require new types of taxes, economic policy and social programs:

A World Without Work - The Atlantic

"What may be looming is something different: an era of technological unemployment, in which computer scientists and software engineers essentially invent us out of work, and the total number of jobs declines steadily and permanently."
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 01-29-2016, 02:48 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,711
Quote:
Originally Posted by NW-Bound View Post

Time to refresh your conversational French.
Lived in Paris for 9 years. Visited for over 30 years. Pas de probleme!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now   Reply With Quote
Old 01-29-2016, 03:11 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by marko View Post
Pretty sure all you have to do is leave the country for a few days and return. Italy is just a short drive away and the food is good!
Sadly it no longer works that way.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 01-29-2016, 03:58 PM   #14
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
Europe is so expensive, I don't intend to stay more than 60 days.


Sent from my iPad using Early Retirement Forum
__________________
When I post IIRC, that means going by memory. Google is your friend for facts. Stop being a lazy bum, I can't do all the googling for you. I'm lazy too. LOL
Fedup is offline   Reply With Quote
Old 01-29-2016, 04:05 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by Fedup View Post
Europe is so expensive, I don't intend to stay more than 60 days.
Costs in Europe vary widely. We found Greece and Spain to be quite inexpensive. Even France is cheaper to travel through than the U.S. The U.K. and especially Switzerland, meanwhile, are quite expensive by U.S. standards.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 01-29-2016, 04:39 PM   #16
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 894
Quote:
Originally Posted by Gone4Good View Post
Costs in Europe vary widely. We found Greece and Spain to be quite inexpensive. Even France is cheaper to travel through than the U.S. The U.K. and especially Switzerland, meanwhile, are quite expensive by U.S. standards.

This is the same as saying the US is expensive. If you live in NY or the Bay Area, then sure. But as there are lower COL locations in the US, the same is true for Europe. The real problem isn't cost, but integrating into a different culture.

I'm fortunate since I have citizenship in an EU country. I expect to spend a good amount of time living in the EU once I retire, but I'll most likely split my time between the US/EU (and possibly SE Asia), since each place offers something different.
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Old 01-29-2016, 05:15 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
Quote:
Originally Posted by marko View Post
Lived in Paris for 9 years. Visited for over 30 years. Pas de probleme!
Darn! I guess I am the one who will have to crack the book.

Oh wait! I do not know if I can yet afford a 2nd home in Provence.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 01-29-2016, 06:54 PM   #18
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 2,930
Quote:
Originally Posted by Gone4Good View Post
Costs in Europe vary widely. We found Greece and Spain to be quite inexpensive. Even France is cheaper to travel through than the U.S. The U.K. and especially Switzerland, meanwhile, are quite expensive by U.S. standards.

I was not looking at those countries. I've been to Paris, but not the whole of France. So far I'm only looking at hotels at several countries and they are not cheap.


Sent from my iPad using Early Retirement Forum
__________________
When I post IIRC, that means going by memory. Google is your friend for facts. Stop being a lazy bum, I can't do all the googling for you. I'm lazy too. LOL
Fedup is offline   Reply With Quote
Old 01-29-2016, 08:39 PM   #19
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 732
Quote:
Originally Posted by MichaelB View Post
Yes, we accuse the Fed of creating this mess and now we demand the Fed clean it up -- but not just yet.

translated,
The problem is that the FED has boxed themselves into a corner after QE 1,2,3 and ZIRP in response to the 2008 recession, and I don't think they (or anyone else) know how to clean this mess up, as we've never been through anything like this before. Raising interest rates right now was (and is) probably not a good idea, as the US economy is still obviously struggling, although we may be a bit ahead of the rest of the world. I predict that there will be no more interest rate increases in 2016, and if they do increase it again, it won't have the desired effect. 2016 is not going to be a good year to make money in the markets, as things are still overvalued in my opinion, and the weak economy is not going to help turn things around anytime soon.
__________________
RAE is offline   Reply With Quote
Old 01-29-2016, 09:42 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,449
So, perhaps the Bank of Japan's action will cause the US Fed to stop raising rate, and that causes both stock and bond markets to go up today.

I dunno what Monday will bring, but today my stocks go up 2.87%, and my MFs up 2.11%, compared to the S&P at 2.48%.
__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound 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
The Specter of Global Deflation IndependentlyPoor FIRE and Money 13 07-11-2010 01:50 PM
CAVS sign another piece to the puzzle...Jamison! thefed Other topics 5 02-19-2010 08:45 AM
Global Deflation Pandemic Begins to Brew Helena FIRE and Money 37 08-02-2009 10:53 PM
Campaign will raise awareness on Global Warming & Global Health Wags Other topics 13 04-03-2008 07:33 AM

 

 
All times are GMT -6. The time now is 09:03 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.