Deflationary Spiral CALL...by NathansEcoEdge

[bpr]

Re: Deflationary Spiral CALL...by NathansEcoEdge

bpr mentions that there may simply be a time horizon issue between the (short term) deflationist calls and the (long term) inflationist calls. Although he argues that point persuasively, I think he inadvertently belittles the incredible iTulip record as to both accuracy of prediction AND TIMING. In my experience, they not only get it right, they have an uncanny knack of increasing the strength of their language and the confidence of their convictions with amazing timing. If my understanding of recent posts is correct, they have recently reached one such point of conviction regarding the virtual impossibility of a deflationary spiral, the imminent end of disinflation, and the beginning of inflation anew.

It wasn't my intention to challenge the iTulip record as far as timing and trading, only to point out that there are two types of discussions happening here: what's going to happen and how to trade it.

When iTulip makes a trading call (e.g. Time to Short Commercial Real Estate; Time to Short the S&P 500; or, more recently, consider taking a small short position on China equities), the timing has an impeccable record.

When iTulip makes a thesis statement, or a macroeconomic call, the timing is hazier: the dollar will be devalued, and inflation is coming, but it may take years, barring a geopolitical event, causing a sudden stop.

Sometimes short-term traders want to reconcile short-term opportunities with long-term macro calls, which is not going to work.

A five-mile detour will not change the direction of a 5,000 mile journey.