Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

[friendly_jacek]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

GRG55,
I was referring to your previous post:

1. I would imagine that the Fed and Treasury would prefer the more orderly, controlled and politically acceptable inflate-away-the-debt option. And what Ben and Hank want, they seem to be able to conveniently engineer these days, so I would be loathe to bet against them.
2. I don't believe a substantial or sustainable rise in the US$ is possible and therefore I'm in EJ's $ Ratchet camp.
3. Apparently the BoE and the ECB didn't hear that story this past week, as they both left rates unchanged, while the Swedes raised their rate. My guess is that if the US$ continues its romp, the Fed may use that as cover to cut the funds rate to goose the faltering stock market, and also to try to create some steepening of the [now flattening] yield curve, before the election.
4. And the idea that overburdened US consumers are in a position to dramatically increase their savings is a dubious proposition, and its a trend the Fed & Treasury will fight with all their considerable large-bore artillary, up to and including the confiscation of savings [such as pension plans] if necessary. Count on it.

[Slimprofits]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

Jack Crooks and Martin Weiss Deflation Survival Briefing - 12/23/08

Without directly referring to Treasuries (they refer only to currencies, dollar and yen), the reader is left to assume that Weiss and Crooks think individual investors and Central Banks will continue to pile into short-term T-Bills for the next two to four years, if not a couple more. ("for years.....")

Seems like a crazy gamble to me, on two fronts - Crooks is a young guy - is his reputation in this game not now staked on this call?

Barclays Bank along similar lines (publicly anyways):

Risk aversion is likely to remain the key driver of the us dollar in the short term. Although the us economy is in poor shape, other economies look worse. We expect the dollar to regain strength over the coming months.

[..]

When economic growth and risk appetite return, us current account fundamentals suggest that the currency will not fall to the lows seen this year.

I am 100% baffled as how they arrived at this (in bold) conclusion.

[FRED]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

Jack Crooks and Martin Weiss Deflation Survival Briefing - 12/23/08

Without directly referring to Treasuries (they refer only to currencies, dollar and yen), the reader is left to assume that Weiss and Crooks think individual investors and Central Banks will continue to pile into short-term T-Bills for the next two to four years, if not a couple more. ("for years.....")

Seems like a crazy gamble to me, on two fronts - Crooks is a young guy - is his reputation in this game not now staked on this call?

Barclays Bank along similar lines (publicly anyways):

I am 100% baffled as how they arrived at this (in bold) conclusion.

They really need to read The truth about deflation. The Fed will not let money languish for years in US Treasury bonds. That's what they did in the early 1930s. When the Fed says "It won't happen again" the hoarding of capital in government bonds for years on end is the "it" they are referring to.

I'd sooner bet against nightfall than against a central bank determined to create inflation.

[pwcmba]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

As an old friend of mine would say "all fiat currency is plumeting through space" sometimes one just goes faster than the other.

[kingcopper]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

well,

In two separate fields of retail consumption, prices since January 1st have increased in almost all associated inventories by approximately 25%. These fields being home improvement and the grocery stores. Also, fuel is moving up presently and swiftly at that. The deflation on the ground is over with; for now. I think the FDI will show this change soon enough.

As for my opinion on the home improvement side, I own apartments and buy certain "high margin" items several times a year. These items had been increasing since 2002 up until August 08'. They then slid back to 2005-2006 pricing abruptly. Now, two days into 09', these items have jumped back to a price that reflects August 08'+ 10%! Now, items like sticks of lumber are still 2005 priced, but, many items such as shingles are at all time highs. Heck, 20oz. sodas have increased from $.99 to $1.59 in the check out lines.

[GRG55]

Re: Jack Crooks Calls For Deflation And Long Term Bull Market USD. [wtf]

well,

In two separate fields of retail consumption, prices since January 1st have increased in almost all associated inventories by approximately 25%. These fields being home improvement and the grocery stores. Also, fuel is moving up presently and swiftly at that. The deflation on the ground is over with; for now. I think the FDI will show this change soon enough.

As for my opinion on the home improvement side, I own apartments and buy certain "high margin" items several times a year. These items had been increasing since 2002 up until August 08'. They then slid back to 2005-2006 pricing abruptly. Now, two days into 09', these items have jumped back to a price that reflects August 08'+ 10%! Now, items like sticks of lumber are still 2005 priced, but, many items such as shingles are at all time highs. Heck, 20oz. sodas have increased from $.99 to $1.59 in the check out lines.

Same basic observation. With the exception of copper wiring [which has finally seen a modest price decline] I have seen absolutely no reductions in any of the building materials inputs for the bunker since I started construction in August. The prices of shingles and siding materials have increased, at the same time as the inventories and selection of same has declined as less popular, lower-volume colours and finishes are aggressively discountinued. Inventory clearances of overstock household appliances are the only thing we have seen as bargains.