Gold is not money (but it might be a good investment)

Bullfighter

I fear monetary inflation is the end game.

I personally see that we are in a period of cost biflation, with credit based assets falling (houses, cars etc) due to credit restriction and inflation of non-credit based items (food, energy etc).

There will be a massive over-swing, since our monetary system is fundamentally based on inflation I fear it is you who hasn't understood the nature of our monetary system.

So yes, at the moment we see biflation, and a contraction in the broad money supply. 6-9 months or maybe a year hence I believe the pendulum will swing back.. violently. I wouldn't want to try to catch that falling knife.

Bullfighter

Generali wrote: »

UK M4

By the way, before you start cutting and pasting charts, you may want to review them first.

We are already seeing the upswing here, it is the 0 line that represents equilibrium in the money supply, all measures have bounced off the lows despite the near 0% base rates.. what does that signify to you Generali??

Generali

Bullfighter wrote: »

By the way, before you start cutting and pasting charts, you may want to review them first.

We are already seeing the upswing here, it is the 0 line that represents equilibrium in the money supply, all measures have bounced off the lows despite the near 0% base rates.. what does that signify to you Generali??

I'm looking at the blue line, the line that shows M4 growth in the UK which shows the rate of growth continues to fall and will probably be negative before the end of 2010.

US and Euro M3 is already negative.

What is going to drive your inflation? What do you mean by 'biflation' please? Which falling knife do you wish to avoid catching?

BTW, near 0% interest rates should, in inflationary times, lead to rising inflation because of not as you assert, "despite".

Generali

Bullfighter wrote: »

By the way, before you start cutting and pasting charts, you may want to review them first.

We are already seeing the upswing here, it is the 0 line that represents equilibrium in the money supply, all measures have bounced off the lows despite the near 0% base rates.. what does that signify to you Generali??

PS 'Equilibrium' in the money market is where supply = demand, the same as in any other market if money supply is flat and demand is falling the market is not in equilibrium.

The 0 line represents 0 growth in the money supply.

Before you start criticising charts you might decide to take the time to understand them.

Stone me.

Bullfighter

Generali wrote: »

I'm looking at the blue line, the line that shows M4 growth in the UK which shows the rate of growth continues to fall and will probably be negative before the end of 2010.

US and Euro M3 is already negative.

What is going to drive your inflation? What do you mean by 'biflation' please? Which falling knife do you wish to avoid catching?

BTW, near 0% interest rates should, in inflationary times, lead to rising inflation because of not as you assert, "despite".

From Wikipedia

Biflation is a state of the economy where the processes of inflation and deflation occur simultaneously.[1] The term was first introduced by Dr. F. Osborne Brown, a Senior Financial Analyst for the Phoenix Investment Group.[2] During Biflation, there's a rise in the price of commodity/earnings-based assets (inflation) and a simultaneous fall in the price of debt-based assets (deflation).[3]
The price of all assets are based on the demand for them versus the volume of money in circulation to buy them.

The 'knife' I am trying to avoid catching is trying to time the markets between inflation & deflation.

Generali

Bullfighter wrote: »

From Wikipedia

Biflation is a state of the economy where the processes of inflation and deflation occur simultaneously.[1] The term was first introduced by Dr. F. Osborne Brown, a Senior Financial Analyst for the Phoenix Investment Group.[2] During Biflation, there's a rise in the price of commodity/earnings-based assets (inflation) and a simultaneous fall in the price of debt-based assets (deflation).[3]
The price of all assets are based on the demand for them versus the volume of money in circulation to buy them.

Asset prices are basically flat. Money supply is falling. Biflation is a myth, invented by investment bank analysts in 2008 to cover all options where Governments were printing money in a deflationary world.

Bullfighter wrote: »

The 'knife' I am trying to avoid catching is trying to time the markets between inflation & deflation.

The purchase of which asset are you trying to time?

Housebear51

After those trillions were added to the world currency supply last few years of course the M3 supply will fall a little. But not much before the next leg up. But M3 isnt a full picture you need to look at revolving credit.

The point is, fiat currencies are unstable. No one can decide if we will see deflation or inflation or even hyper inflation. Its all looking very unstable.

Also most people dont know Gold and silver do very well in deflation, even better in inflation. Even better performance when experts dont know if we are heading for deflation or inflation.

Generali

Housebear51 wrote: »

After those trillions were added to the world currency supply last few years of course the M3 supply will fall a little. But not much before the next leg up. But M3 isnt a full picture you need to look at revolving credit.

The point is, fiat currencies are unstable. No one can decide if we will see deflation or inflation or even hyper inflation. Its all looking very unstable.

Also most people dont know Gold and silver do very well in deflation, even better in inflation. Even better performance when experts dont know if we are heading for deflation or inflation.

I'd really like to discuss these points with you but the fairest way I can put this is that you don't have a clue what you are talking about.

First the money supply is increasing and now "of course the M3 money supply is falling".

I ask you 3 questions:

1. Is the supply of money falling or rising (you seem unsure)?
2. What is the impact of a change in the money supply?
3. Why do you seem to think I'm an idiot?

I hope you're not studying economics. If you are you are clearly struggling and I would be happy to help if you PM me.

HAMISH_MCTAVISH

Generali wrote: »

I'd really like to discuss these points with you but the fairest way I can put this is that you don't have a clue what you are talking about.

First the money supply is increasing and now "of course the M3 money supply is falling".

I ask you 3 questions:

1. Is the supply of money falling or rising (you seem unsure)?
2. What is the impact of a change in the money supply?
3. Why do you seem to think I'm an idiot?

I hope you're not studying economics. If you are you are clearly struggling and I would be happy to help if you PM me.

Ouch.... :rotfl:

That's just beautiful.

StevieJ

Generali wrote: »

I hope you're not studying economics. If you are you are clearly struggling and I would be happy to help if you PM me.

Up late Gen