where are the gold threads?

[NW-Bound]

Most electronic things are getting cheaper and cheaper. But on the other hand, we had no need for many of these things before. I still remember when pay TV, over the air using an unscrambler box and not cable, came to Phoenix. It was a single channel, yet was a luxury, and not too many people subscribed. Now, we all have cable or satellite TV with 100 channels, and cell phones, and Netflix, and Internet services, etc... Together, the monthly charges add up to a fair amount of expenses that we did not have 30 years ago.

 

[haha]

Rob Arnott Doesn't Buy Positive Outlook on Inflation

I can't seem to get the url for this video, but it is at the botton of this page.

http://www.morningstar.com/#hideAd

 

[Gone4Good]

I can't seem to get the url for this video, but it is at the botton of this page.

Morningstar Stock, Mutual Fund, Hedge Fund, ETF Investment Research

The only video I saw from Arnott was against cap weight indexing bonds . . . didn't hear him say much about inflation.

But its true, opinions differ on this, as in all things. I'll only ask one question of Arnott . . . what did he say last year and the year before? He'll have a lot more credibility in my mind if he called for low inflation the past two years and is coming to the table with reasons why things are changing for the years or months ahead. If instead he's going to roll out the same old arguments that have been wrong for two years running then it really isn't worth our time to listen.

 

[FIREd]

Perhaps that's it:

Arnott: Not the Time to Be Greedy

Note that Arnott's PASDX fund is currently invested in long term bonds and that he thinks that now is not a good time to load up on inflation hedges (they are too expensive). As I do, he thinks that the biggest risk in the short to intermediate term is another recession (double dip) and that the inflation risk is still several years away. His investment ideas for fighting inflation in the future are predictable: TIPS, real estate, commodities, emerging market debts.

 

[haha]

If one uses a fine enough screen not much will get through. A more coarse sieve may be a better plan. I have never seen any valid method that not only shows what, but exactly when. Good luck!

Ha

 

[Gone4Good]

Note that Arnott's PASDX fund is currently invested in long term bonds and that he thinks that now is not a good time to load up on inflation hedges (they are too expensive). As I do, he thinks that the biggest risk in the short to intermediate term is another recession (double dip) and that the inflation risk is still several years away.

So own long-term bonds today?

That doesn't sound like a strong inflation call. It sounds like a deflation call in the near-term (which is the period where forecasts should be most accurate).

Several years from now, might we have significant inflation? Yup. Lots can happen in several years. But apparently we have to worry about near-term deflation before we have to worry about longer-term inflation.

Looks like Arnott and I agree.

 

[samclem]

But how much of it got "trickled down" to the Joe Blows, and how much got stuck with the bankers?

Dang. If only the federal government could figure out some way they could take action to directly increase the amount of money individuals have to spend and to invest. I wonder if we could maybe think of some method . . . nahh. It's probably impossible.

 

[Gone4Good]

All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.

 

[FinanceDude]

All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.

Hang around Spanky......this ain't over yet....

 

[samclem]

All I can say is good thing government did most of the very unpopular things it did . . . TARP, emergency Fed lending, "quantitative easing" and a zero Feds Funds rate in the face of persistent cries of ever looming hyperinflation.

One can only imagine the wreckage we'd be living through had the critics of these policies prevailed. But don't expect anybody to ever admit they were wrong.

Don't leave out the wisdom of the continued hemorrhaging of taxpayer money through Freddie and Fannie. These entities no longer even maintain a pretense of eventually becoming solvent, they are now pass-throughs for government money with a lifetime charter.

I guess we'll just have to keep imagining the unimaginable. I think we'll have help--apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided. We'd be eating our dogs and living in caves right now if not for the brilliance and benevolence of our government rulers (of both parties). It only looks like waste, patronage, and statism.

These fables of a terrible fate avoided by huge government intervention will become more important as the public starts to experience the real pain of these ill-advised actions. They'll grow uncomfortable, and restless. Counter this with "Sure, taxes are high, we spent our kids into a lifetime of debt, we gave irresponsible industries proof that the government would bail them out, and our economic growth rate is now the same as that of Malawi. But let me tell you how bad it could have been . . ." Maybe it will work, apparently it is worth a try.

 

[FinanceDude]

Don't leave out the wisdom of the continued hemorrhaging of taxpayer money through Freddie and Fannie. These entities no longer even maintain a pretense of eventually becoming solvent, they are now pass-throughs for government money with a lifetime charter.

I guess we'll just to keep imagining the unimaginable. I think we'll have help--apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided. We'd be eating our dogs and living in caves right now if not for the brilliance and benevolence of our government rulers (of both parties). It only looks like waste, patronage, and statism.

These fables of a terrible fate avoided by huge government intervention will become more important as the public starts to experience the real pain of these ill-advised actions. They'll grow uncomfortable, and restless. Counter this with "Sure, taxes are high, we spent our kids into a lifetime of debt, we gave irresponsible industries proof that the government would bail them out, and our economic growth rate is now the same as that of Malawi. But let me tell you how bad it could have been . . ." Maybe it will work, apparently it is worth a try.

Agree 1000%. If the future of America is government running everything, we are screwed. It appears we are well on our way in just a year and a half.......

 

[calmloki]

Agree 1000%. If the future of America is government running everything, we are screwed. It appears we are well on our way in just a year and a half.......

ah shoot - we've been going downhill a lot longer than a year and a half.

 

[angelbaby]

We're also forgetting about hedonics. The way the government calculates it...

Say the price of a new fridge goes up 100% but the newer fridge is twice as energy efficient as the old, then the price increase in dollar terms is never counted in the CPI. I can see many instances where this kind of fuzzy math can pose as problematic.

 

[Gone4Good]

apparently there will be no shortage of folks reminding us of the (notional, postulated, horriffic) future we narrowly avoided.

Or those whose political leanings prevent them from even acknowledging the history they just lived through. It's astounding, really.

 

[Gone4Good]

If the future of America is government running everything, we are screwed

. . . and those whose eyes are kept tightly sealed against the present as it unfolds . . .

TARP Repayments (including warrants sold)
US Hires Adviser for GM IPO
US to Sell Citigroup equity

etc, etc . . .

 

[Gone4Good]

Or those whose political leanings prevent them from even acknowledging the history they just lived through. It's astounding, really.

So I guess what I'm hearing is that the crisis that nearly bankrupted our largest banks, that sent unemployment from ~5% to 10% in near record time, that sent credit spreads in both HG and HY markets to levels implying defaults greater than those of the great depression, that sent the stock market down 55%, that started a run on short-term lending off all kinds (from money market funds to repos), wasn't really that bad and the unprecedented government intervention didn't really help.

But rather than all of those things that are part of the historic record, what we really need to be worried about is a debt-monitization driven hyperinflation, notwithstanding years of decelerating inflation. Or perhaps a run on the dollar, which also isn't anywhere in evidence. Or perhaps we need to worry about spiking interest rates because of U.S. credit deterioration, even as 10 year rates decline to 3.25%. Or maybe we need to worry about all three simultaneously.

So the message is ignore and downplay the stuff that actually happened, what we really need to worry about is the stuff that hasn't happened and for which there is no evidence of.

I'm with you!

 

[REWahoo]

Hmmm....

Three consecutive posts on the thread, the last quoting and responding to yourself.

Recently retired, so whaddya DO all day? Asked and answered.

 

[Gone4Good]

Hmmm....

Three consecutive posts on the thread, the last quoting and responding to yourself.

Recently retired, so whaddya DO all day? Asked and answered.

Actually just got back from a tour of Val Kill (Eleanor Roosevelt's house) and a nearby winery. Just some downtime before I fire up the grill.

 

[Leonidas]

It's one thing to talk to yourself, but I think you might be going off into the weeds a tad when the conversation gets to be two-sided.

 

[Texas Proud]

So I guess what I'm hearing is that the crisis that nearly bankrupted our largest banks, that sent unemployment from ~5% to 10% in near record time, that sent credit spreads in both HG and HY markets to levels implying defaults greater than those of the great depression, that sent the stock market down 55%, that started a run on short-term lending off all kinds (from money market funds to repos), wasn't really that bad and the unprecedented government intervention didn't really help.

But rather than all of those things that are part of the historic record, what we really need to be worried about is a debt-monitization driven hyperinflation, notwithstanding years of decelerating inflation. Or perhaps a run on the dollar, which also isn't anywhere in evidence. Or perhaps we need to worry about spiking interest rates because of U.S. credit deterioration, even as 10 year rates decline to 3.25%. Or maybe we need to worry about all three simultaneously.

So the message is ignore and downplay the stuff that actually happened, what we really need to worry about is the stuff that hasn't happened and for which there is no evidence of.

I'm with you!

Since I work with a few of the people who have some of the beliefs you are talking down... I will put a post on their side....

The one that I think has more credibility is the guy who move 100% of his 401(k) to cash in Sept 2007 before the crash.. he said the way things were going it could not be sustained.... he has not changed his mind much... in fact, he is more worried now with all the spending by the gvmt...


Take a look at the PROJECTED DEFECITS going forward... and the percent of GDP... ours make Greece look like a saver... if something is not done, there will be a day of recogning (sp?)....

So, taking a look at today and not factoring in all the proposed spending, tax hikes etc. is a fools game...

At least that is what they would say....

 

[audreyh1]

Not for me. Gone4Good provides appreciated balance.

Audrey

 

[Gone4Good]

Not for me. Gone4Good provides appreciated balance.

Audrey

Gracias.

 

[Gone4Good]

So, taking a look at today and not factoring in all the proposed spending, tax hikes etc. is a fools game....

Agreed. Nobody disputes that monetary policy needs to be normalized and deficits need to be reduced. Nobody. The question is over timing.

The folks who have been forecasting a run on the dollar, hyperinflation, and a federal debt crisis have been advocating fiscal and monetary tightening for two years. But history has not borne out their apocalyptic forecasts. Instead of all the dread outcomes we've been promised, we see modest growth amid decelerating inflation. Against that backdrop it's hard to see how higher interest rates and fiscal austerity would have achieved anything but a deeper crisis. Someone please explain how this isn't true?

 

[brewer12345]

Agreed. Nobody disputes that monetary policy needs to be normalized and deficits need to be reduced. Nobody. The question is over timing.

The folks who have been forecasting a run on the dollar, hyperinflation, and a federal debt crisis have been advocating fiscal and monetary tightening for two years. But history has not borne out their apocalyptic forecasts. Instead of all the dread outcomes we've been promised, we see modest growth amid decelerating inflation. Against that backdrop it's hard to see how higher interest rates and fiscal austerity would have achieved anything but a deeper crisis. Someone please explain how this isn't true?

Aha! "They" have gotten to you! Just put this tinfoil helmet on and let me replace your amalgam fillings with gold ones (I have a screwdriver and some vodka) and you will start to really understand!!!

 

[Tigger]

For the record: as one of the designated sourpusses of the forum, I own some gold.

Well, so far it's done better than my euro's... (I'm European)

I don't believe that I have much talent for market timing, but for now the lack of gold threads is reassuring me. I realise that I'm taking a risk, but it may help limit damage from currency problems and bank failures. I hope I'll be able to get out in time and switch to a buy and hold approach after stocks and real estate have been thoroughly thrashed overhere. A man can dream...