Deflation: It's time to call a spade a spade.

[friendly_jacek]

Re: Deflation: It's time to call a spade a spade.

It could be worse: we could all still be in stocks.

For the record, I lost way more on my inflation hedges than I would have lost if I rode equity mutual funds down.

The problem with itulip thesis was that itulip modeled the meltdown on Argentina and did not understand that that model would not apply with a reserve currency. In retrospect, the current $ behavior is analogous to what happened 1997-2001. Only after 2001 the printing presses overshot. Sounds like a long way to go before Poo happens?

[phirang]

Re: Deflation: It's time to call a spade a spade.

Nope. Same old iTulip, but not like anyone else.

Same old Ka-Poom Theory.

Disinflation followed by currency depreciation and inflation.

No matter how many times we warned about the disinflationary "Ka" phase looks like lots of folks got caught up in the previous dollar depreciation rally in gold and forgot how unpleasant the disinflationary corrections are.

See Gold Update: The small trade within the big trade

Again, it's time for EJ to battle Roubini. Anything less is a cop-out.

[phirang]

Re: Deflation: It's time to call a spade a spade.

For the record, I lost way more on my inflation hedges than I would have lost if I rode equity mutual funds down.

The problem with itulip thesis was that itulip modeled the meltdown on Argentina and did not understand that that model would not apply with a reserve currency. In retrospect, the current $ behavior is analogous to what happened 1997-2001. Only after 2001 the printing presses overshot. Sounds like a long way to go before Poo happens?

I had some disasterous trades, and the whole inflation-hedge mentality was the source of all of them.

I have made back a lot of my money doing very, very aggressive short-term option trading.

I think EJ better put some serious thought into ka-poom, or else everyone is going to defect to RGE monitor...

[marvenger]

Re: Deflation: It's time to call a spade a spade.

Fred, by currency depreciation do you mean lowering rates and adding more debt. To me it seems the economy can sustain no more debt, I think I agree with Hudson on this. Therefore I see a need to actually outright print the cash Does the POOM in ka-poom involve actual printing of cash in the predicted next POOM. I'm unsure of iTulip's position here.

[phirang]

Re: Deflation: It's time to call a spade a spade.

Holy Shit! You just do this for fun, right?

Regardless, I admit that your "prove it" mentality does add to the clarity of the discussion, or at least it should, but tact might elicit more interaction.

Roubini has not repudiated anything, as there is no repudiation without final proof, and I suspect that is going to be a long time coming. So EJ doesn't have to bow down to anyone until such time as he is unltimately proven wrong, if anyone could even nail down such a truth.

The world is not nearly so black and white as you seem to fear. That will be a source of pain as the landscape changes under your feet. Or not.

That's true, but then there's no value to his insights nor buying his books.

[FRED]

Re: Deflation: It's time to call a spade a spade.

That's true, but then there's no value to his insights nor buying his books.

phirang,

Question: Below are charts that compare the starting position of the US with respect to all available economic reflation tools comparing 2001 to 2008 and then estimating a 2010 position.

Does this look long term deflationary to you?

[phirang]

Re: Deflation: It's time to call a spade a spade.

phirang,

Question: Below are charts that compare the starting position of the US with respect to all available economic reflation tools comparing 2001 to 2008 and then estimating a 2010 position.

Does this look long term deflationary to you?

Sure, if I can export it.

[metalman]

Re: Deflation: It's time to call a spade a spade.

Sure, if I can export it.

see your point re euro lap doggies of the us but not china. they will not sit around and let the us export deflation.

[drumminj]

Re: Deflation: It's time to call a spade a spade.

For the record, I lost way more on my inflation hedges than I would have lost if I rode equity mutual funds down.

The problem with itulip thesis was that itulip modeled the meltdown on Argentina and did not understand that that model would not apply with a reserve currency. In retrospect, the current $ behavior is analogous to what happened 1997-2001. Only after 2001 the printing presses overshot. Sounds like a long way to go before Poo happens?

Wow, a lot of EJ bashing in this thread. No one forced you to take the positions you did. EJ put forward his thesis and his reasoning behind it. Either you agreed with it of your own accord and placed your bets, or you didn't and went some other direction. Which is "right" long-term? It's too early to tell - we're still in the early innings of this thing.

The notion of being able to "trade" Ka-Poom has been discussed many times on this board. Assuming we are currently in "Ka", from the looks of things at this point, it likely is tradeable, but we'll have to see how fast "Poom" kicks in. At the moment I think y'all are being a bit too critical with the gift of hindsight. Maybe "Ka-Poom" theory will hold. Maybe it won't. It's a scientific theory - an explanation given the data points we have available, which can be tested and modified to accommodate new data points as they come in.

My inflation hedge positions are hemorrhaging as well. It sucks. But I read iTulip as well as other sites to get different perspectives in order to piece together what I think the likely outcome of this mess is, and in the end I make my own decision on how I place my bets. I have no one to blame but myself (and Bernanke, Paulson, US Congress, etc

Phirang - as far as I can tell, nothing has occurred which discredits Ka-Poom theory at this point. What we're experience clearly falls under the umbrella of "Ka". The only nit I can see one might have grounds to pick would be "deflation" vs "disinflation", but even if what we are experiencing now is "deflation" (first we should agree on a definition, since posters on this site keep using the same word to mean different things - contraction of money supply, reduction of asset prices, etc), that doesn't appear to invalidate EJ's theory as far as I can tell.

I think it's good that people here aren't afraid to challenge EJ's ideas. One of the reasons I keep coming to iTulip is for the different backgrounds and viewpoints that generally are rationally argued and backed with facts and data. In this case, I don't see you bringing much to the table other than saying that you've lost money, and as such EJ should somehow atone for that.

"Symbols" (as Lukester calls him) disagrees with EJ's theory as well, but at least has made an attempt to throw an alternate theory out there, rather than simply attack EJ. If you disagree with Ka-Poom theory, what do you have to offer up instead?

[kingcopper]

Re: Deflation: It's time to call a spade a spade.

The dollar won't start dropping for some months as there is alot of frickin dumping to be done by hedge funds. I still believe that we'll unfortunately need our insurance because of "Boom" and within the next year. The fact of the matter is that Bernacke has been very smart in the way he's been injecting "liquidity" without printing dollars but by this time next year, the "tarp" will have overpaid for billions of dollars of crap that will be resold for a loss. The reseller will create the inflation and Bernacke won't be able to scoop up the excess liquidity and inflation will overcome the world markets. Take this time as an opportunity to wait for a bottom in the PHYSICAL pms and then stock up! Try deflation in this country of 200 million pistols and see where we end up!

[phirang]

Re: Deflation: It's time to call a spade a spade.

[quote=drumminj;56991]Wow, a lot of EJ bashing in this thread. No one forced you to take the positions you did. EJ put forward his thesis and his reasoning behind it. Either you agreed with it of your own accord and placed your bets, or you didn't and went some other direction. Which is "right" long-term? It's too early to tell - we're still in the early innings of this thing.

The notion of being able to "trade" Ka-Poom has been discussed many times on this board. Assuming we are currently in "Ka", from the looks of things at this point, it likely is tradeable, but we'll have to see how fast "Poom" kicks in. At the moment I think y'all are being a bit too critical with the gift of hindsight. Maybe "Ka-Poom" theory will hold. Maybe it won't. It's a scientific theory - an explanation given the data points we have available, which can be tested and modified to accommodate new data points as they come in.

My inflation hedge positions are hemorrhaging as well. It sucks. But I read iTulip as well as other sites to get different perspectives in order to piece together what I think the likely outcome of this mess is, and in the end I make my own decision on how I place my bets. I have no one to blame but myself (and Bernanke, Paulson, US Congress, etc

Phirang - as far as I can tell, nothing has occurred which discredits Ka-Poom theory at this point. What we're experience clearly falls under the umbrella of "Ka". The only nit I can see one might have grounds to pick would be "deflation" vs "disinflation", but even if what we are experiencing now is "deflation" (first we should agree on a definition, since posters on this site keep using the same word to mean different things - contraction of money supply, reduction of asset prices, etc), that doesn't appear to invalidate EJ's theory as far as I can tell.

I think it's good that people here aren't afraid to challenge EJ's ideas. One of the reasons I keep coming to iTulip is for the different backgrounds and viewpoints that generally are rationally argued and backed with facts and data. In this case, I don't see you bringing much to the table other than saying that you've lost money, and as such EJ should somehow atone for that.

"Symbols" (as Lukester calls him) disagrees with EJ's theory as well, but at least has made an attempt to throw an alternate theory out there, rather than simply attack EJ. If you disagree with Ka-Poom theory, what do you have to offer up instead?[/quote]

I'm not the one charging a fee for the site or selling books. That's EJ's job to offer theories, and it's his duty to rebut Roubini's argument, ideally in real-time.

He can ignore Roubini, but that only proves that he's diffident about ka-poom, and his adherents will find themselves led astray as they were with the dollar-ratchet.

[metalman]

Re: Deflation: It's time to call a spade a spade.

The dollar won't start dropping for some months as there is alot of frickin dumping to be done by hedge funds. I still believe that we'll unfortunately need our insurance because of "Boom" and within the next year. The fact of the matter is that Bernacke has been very smart in the way he's been injecting "liquidity" without printing dollars but by this time next year, the "tarp" will have overpaid for billions of dollars of crap that will be resold for a loss. The reseller will create the inflation and Bernacke won't be able to scoop up the excess liquidity and inflation will overcome the world markets. Take this time as an opportunity to wait for a bottom in the PHYSICAL pms and then stock up! Try deflation in this country of 200 million pistols and see where we end up!

one and only one way the dollar drops... the usa decides it's time. a weak dollar was keeping the usa economy alive for years. how long will the usa allow funds in europe and brazil and india to drive the dollar up? who knows. maybe a month or a few, but no matter... i'd rather be on this side of the trade, thx.

[ajerimez2]

Re: Deflation: It's time to call a spade a spade.

All of my inflation hedges are also dramatically in the red. My purchase of yen is the only winner I've got at this point.

But before you defect to RGE monitor, be aware that I was similarly burned listening to Roubini a couple of years ago. Back in mid-2006 all the signs of an impending recession and stock market crash were firmly in place. In May and June, the markets were down 10% and selling off dramatically, and it seemed that another 10% drop was in the cards. Roubini, at that time, was calling for a market plunge and imminent recession. Based on all those factors, I was heavily short, and was making tremendous profits.

Well, it turns out that the markets double-bottomed and began one of their most powerful rallies in years, rocketing from 11,000 to 14,000 almost without pause. I was decimated on all my trades, and even though everything Roubini said made sense, I stopped following his economic forecasts, jumping on the iTulip / Schiff inflation bandwagon instead. For the rest of 2006 and 2007, Roubini looked like a hopeless doom-and-gloomer, while Schiff and EJ came to be seen as prophets as the dollar and gold did exactly what they expected. How quickly fortunes change!

The point is that, given a long enough timeline, Roubini was right. My hope is that, given a year for credit destruction to work its way through the financial system, EJ will be similarly right, and we will be rewarded for holding fast to our inflation hedges.

All I ask of iTulip (and especially you, Fred) is this: drop the defensive posture. Admit that your prognostications were inaccurate, and that nobody can predict the time or place at which the inevitable will occur. History will likely still prove you right, but for now, a little humility will do wonders to assuage the frustration of your loyal readers.

[metalman]

Re: Deflation: It's time to call a spade a spade.

All of my inflation hedges are also dramatically in the red. My purchase of yen is the only winner I've got at this point.

But before you defect to RGE monitor, be aware that I was similarly burned listening to Roubini a couple of years ago. Back in mid-2006 all the signs of an impending recession and stock market crash were firmly in place. In May and June, the markets were down 10% and selling off dramatically, and it seemed that another 10% drop was in the cards. Roubini, at that time, was calling for a market plunge and imminent recession. Based on all those factors, I was heavily short, and was making tremendous profits.

Well, it turns out that the markets double-bottomed and began one of their most powerful rallies in years, rocketing from 11,000 to 14,000 almost without pause. I was decimated on all my trades, and even though everything Roubini said made sense, I stopped following his economic forecasts, jumping on the iTulip / Schiff inflation bandwagon instead. For the rest of 2006 and 2007, Roubini looked like a hopeless doom-and-gloomer, while Schiff and EJ came to be seen as prophets as the dollar and gold did exactly what they expected. How quickly fortunes change!

The point is that, given a long enough timeline, Roubini was right. My hope is that, given a year for credit destruction to work its way through the financial system, EJ will be similarly right, and we will be rewarded for holding fast to our inflation hedges.

All I ask of iTulip (and especially you, Fred) is this: drop the defensive posture. Admit that your prognostications were inaccurate, and that nobody can predict the time or place at which the inevitable will occur. History will likely still prove you right, but for now, a little humility will do wonders to assuage the frustration of your loyal readers.

i've been following the tullip since 2001. it has been 100% consistent. disinflation followed by inflation. disinflation from debt deflation, inflation caused by dollar depreciation as gov't reflates.

now we are in the disinflation. currency devaluations come later.

what part of that don't you understand?

[phirang]

Re: Deflation: It's time to call a spade a spade.

All of my inflation hedges are also dramatically in the red. My purchase of yen is the only winner I've got at this point.

But before you defect to RGE monitor, be aware that I was similarly burned listening to Roubini a couple of years ago. Back in mid-2006 all the signs of an impending recession and stock market crash were firmly in place. In May and June, the markets were down 10% and selling off dramatically, and it seemed that another 10% drop was in the cards. Roubini, at that time, was calling for a market plunge and imminent recession. Based on all those factors, I was heavily short, and was making tremendous profits.

Well, it turns out that the markets double-bottomed and began one of their most powerful rallies in years, rocketing from 11,000 to 14,000 almost without pause. I was decimated on all my trades, and even though everything Roubini said made sense, I stopped following his economic forecasts, jumping on the iTulip / Schiff inflation bandwagon instead. For the rest of 2006 and 2007, Roubini looked like a hopeless doom-and-gloomer, while Schiff and EJ came to be seen as prophets as the dollar and gold did exactly what they expected. How quickly fortunes change!

The point is that, given a long enough timeline, Roubini was right. My hope is that, given a year for credit destruction to work its way through the financial system, EJ will be similarly right, and we will be rewarded for holding fast to our inflation hedges.

All I ask of iTulip (and especially you, Fred) is this: drop the defensive posture. Admit that your prognostications were inaccurate, and that nobody can predict the time or place at which the inevitable will occur. History will likely still prove you right, but for now, a little humility will do wonders to assuage the frustration of your loyal readers.

Well, an even better reason for Roubini and Jenzen to have a tete a tete!