The $ is getting K I L L E D

[metalman]

Re: The $ is getting K I L L E D

I don't understand what you disagree with. I now think it is a trend of declining real wages, and that's compatible with the view that this is cyclical bull, in an inflationary secular bear market.

the politics... how long do wage earners put up with it? that's your trade...

[nero3]

Re: The $ is getting K I L L E D

buffet's part of the deal. a child can figure that.

If I child could figure out that, then why did you disagree with that in the first reply to me here? You first thought I was wrong, then after it was so simple a child could understand it.

[nero3]

Re: The $ is getting K I L L E D

the politics... how long do wage earners put up with it? that's your trade...

I don't understand that. Put up with? Bigger wage demands won't increase real wages in the US as long as there in an inflationary trend going.

[metalman]

Re: The $ is getting K I L L E D

I don't understand that. Put up with? Bigger wage demands won't increase real wages in the US as long as there in an inflationary trend going.

travel back in time 2 yrs... take drugs... open your mind

Janszen: What is the greatest risk facing the Federal Reserve and the U.S. banking system today?
Mayer: The behavior of credit derivatives in a persistently inflationary environment. The Fed is going to have to keep raising interest rates longer than the markets currently expect. It's not the same kind of inflation Volcker was dealing with, not yet anyway. But it's very real.

Janszen: Where is this inflation coming from? Current economic orthodoxy asserts that wage inflation is the root cause.
Mayer: I'm not a believer in NAIRU. Greenspan told me he can't understand why I don't believe in NAIRU (Non-Accelerating Inflation Rate of Unemployment) as a valid economic principle but I think the problem is plain. NAIRU says that wages drive inflation. But my observation is that this is not the case. Higher prices never start with wage earners getting higher wages. Wage earners demand higher wages in response to higher prices. The cycle starts with the prices of things wage earners buy, such as gasoline. That's happening today and has been going on for a while, and that's why I believe there's more inflation risk than the markets perceive and why the Fed will keep raising rates.

[bdryer]

Re: The $ is getting K I L L E D

>>> Dollar down and Bond up, and Gold up ? What is Happening !!!

The treasury yields started dropping today because China is having difficulty keeping their dollar peg. The USD is on the verge of collapsing, so they are forced to buy massive amounts of Treasuries (and other USD-denominated assets) to keep the exchange rate stable. I think we are surprisingly close to the chaos point.

[ThePythonicCow]

Re: The $ is getting K I L L E D

The treasury yields started dropping today because China is having difficulty keeping their dollar peg.

Is this speculation or do you have evidence you can provide?

[metalman]

Re: The $ is getting K I L L E D

But Karl Denniger is a deflationist. He and I have many arguments over the years that he ended with his adamant assertion, made in a very rude and disrespectful way:

1) That the Fed will never, ever engage in quantitative easing, they'd sooner "put a gun to their heads and pull the trigger"
2) That the inflationary impact of a devalued dollar is irrelevant compared to downward pressures on prices caused by the collapse of the domestic money and credit supply

Since then I have not paid any attention to his forecasts.

empire of exaggerators...

[nero3]

Re: The $ is getting K I L L E D

travel back in time 2 yrs... take drugs... open your mind

I don't understand you. What I wrote is that real wages won't increase as long as there is an secular inflationary trend. And you come with some quotes that are just supporting my argument, similar to arguments guys like Friedman have made before, in the sense that wages will lag any inflation pressure, not create it to begin with. If wages are lagging, of course real wages won't increase, just like I am writing. If you think I am wrong, you must look for evidence real wages is increasing. Not articles and graphs that are just supporting my arguments that it is declining.

That guy EJ was arguing with had brought up something else, also important. The issue of raising rates. It seems that the accidents that happened with the investment banks was much more effective in lowering inflation than raising rates. The fed, with Bernanke's Princeton team on bubbles, lead by a german guy is pretty much of the view to let bubbles burn itself through. Instead of raising rates. That was a gamble that paid off big with the oil bubble, I think basically that guy EJ argued with was wrong on that matter, in the sense that this inflation was easier, not harder to deal with. At least for now. At some time in the future that will prove interesting, as new bubbles emerge again. Even a commodity bubble. I feel it's not quite over yet.

[flintlock]

Re: The $ is getting K I L L E D

I'm still expecting another big leg down in the Dow before the inflation kicks in next year, I'll be very suprised if March was actually the bottom.
So we could see the dollar rise against the Euro one more time as we get another "flight to safety".

I'm thinking you are correct about this. That last major crash last year really sticks in many people's minds. I can see a real kneejerk reaction this time around and another flight to safety as you mentioned. Lot of 401k money floating around the market that is owned by people with little or no understanding of markets. Safety to some may not be what it is to us.

[cobben]

Re: The $ is getting K I L L E D

"Is this speculation or do you have evidence you can provide?"

I have been wondering if this was a "real money" market movement ($USD down / US yields also down), or just GS & friends squeezing some overleveraged hedge funds stuck in a "sure thing" trade.

If the world was really dumping the US$, wouldn't US debt be dumped also?

Inquiring minds want to know . . .

[metalman]

Re: The $ is getting K I L L E D

I don't understand you. What I wrote is that real wages won't increase as long as there is an secular inflationary trend. And you come with some quotes that are just supporting my argument, similar to arguments guys like Friedman have made before, in the sense that wages will lag any inflation pressure, not create it to begin with. If wages are lagging, of course real wages won't increase, just like I am writing. If you think I am wrong, you must look for evidence real wages is increasing. Not articles and graphs that are just supporting my arguments that it is declining.

That guy EJ was arguing with had brought up something else, also important. The issue of raising rates. It seems that the accidents that happened with the investment banks was much more effective in lowering inflation than raising rates. The fed, with Bernanke's Princeton team on bubbles, lead by a german guy is pretty much of the view to let bubbles burn itself through. Instead of raising rates. That was a gamble that paid off big with the oil bubble, I think basically that guy EJ argued with was wrong on that matter, in the sense that this inflation was easier, not harder to deal with. At least for now. At some time in the future that will prove interesting, as new bubbles emerge again. Even a commodity bubble. I feel it's not quite over yet.

ok, so we're on the same page re wages & inflation. but bernanke & pals do not 'let the bubble burn thru.' remember tarp, 0% rates, begging congress to pass fiscal spending bills, etc.?

cbs make asset bubbles on purpose... asset inflation is not 'allowed'... it's policy. it's wage inflation they hate... and commodity price inflation comes first, wages lag.

commodity bubbles are poison to cbs... the opposite of asset bubbles. read mayer interview from 2008... the fed raised rates in 2007 to push commodity prices down. they kept rising half way into 2008 anyway... and crashed the economy!

really... sooner or later you'll have to break down & learn the diff between assets in the fire econ and goods/services in the p/c econ.... else you will remain 4ever confused.

[metalman]

Re: The $ is getting K I L L E D

I don't understand that. Put up with? Bigger wage demands won't increase real wages in the US as long as there in an inflationary trend going.

wrong... sustained high goods prices lead to higher wages through politics... unions, min wage laws, etc. the gov't 1st line of defense... lie about it.

[metalman]

Re: The $ is getting K I L L E D

I don't understand what you disagree with, I just think you are acting difficult, because it is me posting it. I now think it is a trend of declining real wages, and that's compatible with the view that this is cyclical bull, in an inflationary secular bear market.

debt is not expanding... debt deflation... ever been a secular bull market in a time of debt deflation? can you give me an example, pls?

[metalman]

Re: The $ is getting K I L L E D

wrong. stocks in the usa do well when wages are falling.

also, stocks do well in the early stages of inflation... the first year or so... then they fall back.

[c1ue]

Re: The $ is getting K I L L E D

The treasury yields started dropping today because China is having difficulty keeping their dollar peg. The USD is on the verge of collapsing, so they are forced to buy massive amounts of Treasuries (and other USD-denominated assets) to keep the exchange rate stable. I think we are surprisingly close to the chaos point.

This is an interesting assertion.

Do you have a link to some evidence of this or is this purely a personal opinion?