Newsflash: Deflation may be next threat!

[doharra]

Got to wonder if this reporter has been lurking on iTulip....

Deflation May Be Next Threat as Commodities, Asset Markets Sink

Oct. 6 (Bloomberg) -- As Federal Reserve Chairman Ben S. Bernanke and his global colleagues fight the worst financial crisis since the 1930s, one danger is looming larger by the day: deflation.

With asset markets tumbling, commodity prices plunging the most in 50 years and banks keeping a tighter grip on credit, the ingredients for a sustained period of falling prices are coalescing. While inflation is still a concern for many policy makers only months after oil and food prices peaked, the risk is their patchwork of rescue and stimulus packages will fail, and prices will start to fall throughout the broader economy.

``The ghost of deflation could be dragged out of the closet again in coming months,'' says Joerg Kraemer, chief economist at Commerzbank AG in London.

[Jim Nickerson]

Re: Newsflash: Deflation may be next threat!

Got to wonder if this reporter has been lurking on iTulip....

Deflation May Be Next Threat as Commodities, Asset Markets Sink

Got to wonder if you've been lurking on iTulip, because all ready there are two links to this Bloomberg piece.

[GRG55]

Re: Newsflash: Deflation may be next threat!

Got to wonder if this reporter has been lurking on iTulip....

Deflation May Be Next Threat as Commodities, Asset Markets Sink

If this reporter has been lurking on iTulip he obviously suffers from a reading comprehension problem...

Still no deflation: Disinflation then lots of inflation

[tombat1913]

Re: Newsflash: Deflation may be next threat!

If this reporter has been lurking on iTulip he obviously suffers from a reading comprehension problem...

Still no deflation: Disinflation then lots of inflation

I guess that depends on which thread he's reading :confused:

BLS data confirm deflation in Aug. 2008.

A month of negative inflation at annual rates occurred in Aug.

There have been 15 months of deflation since 2000.

2000 01 3.613
2000 02 5.076
2000 03 7.292
2000 04 -0.700
2000 05 2.127
2000 06 7.239
2000 07 3.541
2000 08 0.000
2000 09 6.436
2000 10 2.094
2000 11 2.090
2000 12 2.791
2001 01 7.094
2001 02 2.768
2001 03 0.684
2001 04 2.064
2001 05 6.297
2001 06 2.741
2001 07 -2.007
2001 08 0.000
2001 09 4.839
2001 10 -3.317
2001 11 -0.674
2001 12 -0.674
2002 01 2.048
2002 02 2.045
2002 03 3.423
2002 04 5.513
2002 05 1.347
2002 06 0.671
2002 07 2.706
2002 08 3.385
2002 09 2.013
2002 10 2.687
2002 11 2.005
2002 12 2.002
2003 01 5.410
2003 02 6.773
2003 03 1.979
2003 04 -4.473
2003 05 -1.947
2003 06 1.320
2003 07 4.004
2003 08 5.353
2003 09 3.973
2003 10 -1.289
2003 11 0.651
2003 12 3.292
2004 01 4.623
2004 02 3.270
2004 03 2.601
2004 04 1.941
2004 05 5.245
2004 06 4.556
2004 07 1.278
2004 08 1.920
2004 09 2.564
2004 10 6.509
2004 11 5.149
2004 12 0.628
2005 01 0.000
2005 02 3.821
2005 03 3.809
2005 04 5.745
2005 05 -1.842
2005 06 0.622
2005 07 8.362
2005 08 8.304
2005 09 17.114
2005 10 2.441
2005 11 -5.289
2005 12 -0.603
2006 01 7.512
2006 02 -0.600
2006 03 1.821
2006 04 6.180
2006 05 4.269
2006 06 3.636
2006 07 6.108
2006 08 5.455
2006 09 -5.172
2006 10 -5.757
2006 11 1.195
2006 12 7.363
2007 01 1.486
2007 02 3.656
2007 03 5.667
2007 04 3.870
2007 05 5.684
2007 06 3.240
2007 07 2.696
2007 08 0.231
2007 09 4.479
2007 10 3.212
2007 11 11.278
2007 12 4.351
2008 01 4.867
2008 02 0.283
2008 03 4.200
2008 04 2.504
2008 05 8.089
2008 06 13.423
2008 07 10.280

2008 08 -1.630


Before 2000 you have to go all the way back to 1986 to find a month of deflation. In fact, three in a row.

1986 02 -2.162
1986 03 -6.369

1986 04 -4.312

[GRG55]

Re: Newsflash: Deflation may be next threat!

I guess that depends on which thread he's reading :confused:

Really? Did you change your core investment stance during any of the previous 14 monthly deflations since 2000? If so, how well did that work?

Nimble traders can make hay during times of volatility. But nimble traders are actually a rare breed, even among the readership of iTulip [and I suspect that we hear very little to nothing from some of the few that have consistently been able to profit from the market this decade].

The headline in the Bloomberg article is the same as the title of this thread. Now let's say the reporter was reading the article you reference, and looking at the chart. Based on that chart what do you think he should be expecting NEXT?

The problem with weeks like this one past is that the signal gets drowned out by the noise...

[Chris]

Re: Newsflash: Deflation may be next threat!

Got to wonder if you've been lurking on iTulip, because all ready there are two links to this Bloomberg piece.

Jim, you crack me up sometimes...

[tombat1913]

Re: Newsflash: Deflation may be next threat!

Really? Did you change your core investment stance during any of the previous 14 monthly deflations since 2000? If so, how well did that work?

Nimble traders can make hay during times of volatility. But nimble traders are actually a rare breed, even among the readership of iTulip [and I suspect that we hear very little to nothing from some of the few that have consistently been able to profit from the market this decade].

The headline in the Bloomberg article is the same as the title of this thread. Now let's say the reporter was reading the article you reference, and looking at the chart. Based on that chart what do you think he should be expecting NEXT?

The problem with weeks like this one past is that the signal gets drowned out by the noise...

Point taken.

I was (and still am) merely confused about the two following statements.

EJ:
I leave you with the following history of inflations and deflations since 1900. Note that since every central bank abandoned the gold standard globally there have been two slight periods of deflation. These occurred before 1930. Since the international gold standard was abrogated by the US in 1971, ushering in the second era of floating exchange rates in 100 years – the last one ended badly as well – no deflation has occurred.

FRED:
There have been 15 months of deflation since 2000.

[metalman]

Re: Newsflash: Deflation may be next threat!

Point taken.

I was (and still am) merely confused about the two following statements.

EJ:
I leave you with the following history of inflations and deflations since 1900. Note that since every central bank abandoned the gold standard globally there have been two slight periods of deflation. These occurred before 1930. Since the international gold standard was abrogated by the US in 1971, ushering in the second era of floating exchange rates in 100 years – the last one ended badly as well – no deflation has occurred.

FRED:
There have been 15 months of deflation since 2000.

15 months... OFF and ON

no deflation cycle!

deflation = sticking a toe in the quicksand

deflation cycle = standing in quicksand

inflation = wet

inflation cycle = underwater

the distinctions that everyone is groping for are re self-reinforcement or not.

a fire, whether deflation or inflation, is no big deal. a firestorm is.

ej has proved a deflation CYCLE is impossible for a net debtor. it can't for the obvious reason that at some point the currency crashes and cuts off the process. deflation is self-limiting for debtors. grossly. totally.

POOM!

[phirang]

Re: Newsflash: Deflation may be next threat!

15 months... OFF and ON

no deflation cycle!

deflation = sticking a toe in the quicksand

deflation cycle = standing in quicksand

inflation = wet

inflation cycle = underwater

the distinctions that everyone is groping for are re self-reinforcement or not.

a fire, whether deflation or inflation, is no big deal. a firestorm is.

ej has proved a deflation CYCLE is impossible for a net debtor. it can't for the obvious reason that at some point the currency crashes and cuts off the process. deflation is self-limiting for debtors. grossly. totally.

POOM!

But what if your net-debtor issues the currency that the global banking systems uses to trade its debt in?

i.e. the net-debtor has the world by the balls, as recently demonstrated?

[Guest]

Re: Newsflash: Deflation may be next threat!

Lasts for a while. Until it doesn't. That conclusion should be obvious.

But what if your net-debtor issues the currency that the global banking systems uses to trade its debt in?

i.e. the net-debtor has the world by the balls, as recently demonstrated?

[phirang]

Re: Newsflash: Deflation may be next threat!

Lasts for a while. Until it doesn't. That conclusion should be obvious.

Agree, but that isn't now.

The EU is clearly the biggest loser in all of this... something most didn't expect 6 mths ago.

It's actually nice that Russia is taking Iceland... time to scare the shit out of the EU and bring them back into the Greenback Cult.

muahahah!

Baguette and German trade surpluses will finance our next war of domination... muhaha!

[sadsack]

Re: Newsflash: Deflation may be next threat!

ej has proved a deflation CYCLE is impossible for a net debtor. it can't for the obvious reason that at some point the currency crashes and cuts off the process. deflation is self-limiting for debtors. grossly. totally.

POOM!

For better or worse, this concept speaks to me, and thus:

PM - as long as the centripetal forces of this macroeconomic rollercoaster prove insufficient to overcome my grip thereon . . .

[Supercilious]

Re: Newsflash: Deflation may be next threat!

ej has proved a deflation CYCLE is impossible for a net debtor.

Metalman can you please provide a link for that theorem? I don't like to take anything as an article of faith. Maybe you wanted to say that EJ believes that a deflation cycle is impossible for a net debtor ... that is something different.;)

[phirang]

Re: Newsflash: Deflation may be next threat!

Metalman can you please provide a link for that theorem? I don't like to take anything as an article of faith. Maybe you wanted to say that EJ believes that a deflation cycle is impossible for a net debtor ... that is something different.;)

It's a proof by finite induction.

[metalman]

Re: Newsflash: Deflation may be next threat!

Metalman can you please provide a link for that theorem? I don't like to take anything as an article of faith. Maybe you wanted to say that EJ believes that a deflation cycle is impossible for a net debtor ... that is something different.;)

don't take my word for it. find an example of a debtor that defaulted and experienced an appreciation of its currency.

no hurry. i'll wait here.