Mish predicts no inflation Poom

[strittmatter]

Re: Mish predicts no inflation Poom

last time the trade was to load up on 30 yr usa treasury bonds at 19% and wait for the recessions to bring down inflation and the cows to come home. this time it won't be that way. ej's pointed out that the treasury smartened up. all treasury securities are now callable.

yep.

http://www.dailymarkets.com/releases...percent-bonds/

[bnick20]

Re: Mish predicts no inflation Poom

last time the trade was to load up on 30 yr usa treasury bonds at 19% and wait for the recessions to bring down inflation and the cows to come home. this time it won't be that way. ej's pointed out that the treasury smartened up. all treasury securities are now callable.

Good point. Treasury securities are callable today, when there is still some appetite for the debt. I question whether that will be the case in the future if there is a substantial paradigm shift in demand for such securities. Interesting point, though.

[metalman]

Re: Mish predicts no inflation Poom

Good point. Treasury securities are callable today, when there is still some appetite for the debt. I question whether that will be the case in the future if there is a substantial paradigm shift in demand for such securities. Interesting point, though.

that's an even better point. they had to make them non-callable to sell 'em, even at 19%. imagine how shit everything has to get to make a usa bond look like bad bet at 19%?

let's start a pool... the treasury makes 30 yr bonds non-callable when they reach... what... 12%? 15%?

[bnick20]

Re: Mish predicts no inflation Poom

that's an even better point. they had to make them non-callable to sell 'em, even at 19%. imagine how shit everything has to get to make a usa bond look like bad bet at 19%?

let's start a pool... the treasury makes 30 yr bonds non-callable when they reach... what... 12%? 15%?

Have no clue, but I think it may happen sooner than we think--especially if Richard Russell's "bond vigilantes" react poorly to the trillion dollar deficits "as far as the eye can see".

I've wanted to get short treasuries in a big way for some time, but I'm worried about getting kicked in the teeth by our friends at the Fed...

[BadJuju]

Re: Mish predicts no inflation Poom

I've wanted to get short treasuries in a big way for some time, but I'm worried about getting kicked in the teeth by our friends at the Fed...

I am no good or great investor, but I see no reason to burden oneself with risks like the Fed when there are many other opportunities available.

[c1ue]

Re: Mish predicts no inflation Poom

Yes, the callable factor is one of the items on my checklist for when to start looking at an exit from a Treasury short.

Haven't completed any action items on the entrance checklist though.

[occdude]

Re: Mish predicts no inflation Poom

I think the one point where inflationists and deflationists agree is that the INDIVIDUAL PURCHASING POWER is gowing to go down. In other words the G7 people will witness a decreasing ability to aquire staple goods (which is poetic justice due to the fact they don't make many anymore), and this will affect their matierial wealth.

Whether its due to loss of employment and wages or hyperinflation the result will be the same, staples are going to be in short supply while demand will not slacken to take up the difference.

Now I think its a little naive to think that the person with their finger on the button which prints currency will not use that button as the square fills with hungry,angry, economically ignorant mobs holding pitchforks and torches. Inflation is the BEST way to keep the mobs thinking the government is doing something . Now as far as money velocity and credit activity goes. The government is going to try to be on both sides of the equation through montetizing the debt. They will be the Alpha and the Omega, the employee and the employer they will be so far ensconced in the national fabric you wont know where they stop and you start. So get ready for the treasury to Fed two step with the Treasury issuing debt and the Fed issuing money and both of them acting like this isn't rank theft. Don't worry about other countries buying our debt in this scenario because the government will be the buyer and sellers.

Already they're talking about the government creating a "bad bank" which buys all the "bad debt" from the "good banks" how is this "bad bank" getting capitalized again? Isn't this what got Enron into so much trouble? Typical "good enough for thee but not good enough for me" hypocrisy

The Government with their inflationary gains will likely provide bread and circuses (wonder why big screen tvs are falling in price? Could this be another dubious use of TARP?), plenty of bridges to no-where and maybe a money ladder to the moon, while they pat each other on the back and put palmed money into each others back pocket.

[Slimprofits]

Re: Mish predicts no inflation Poom

I followed the link to Mish's site and ended up reading his blog entry that comes to a conclusion that flies in the face of everything that I've learned from Bart's awesome charts.

I'm simple and try to remain objective. Bart who? I don't know Bart from a hole in the wall, but his charts on the subject of money/credit supply prove that Mish is either misinformed or lying. Hope to meet Mish someday, he must be one funny dude.

[Joy]

Re: Mish predicts no inflation Poom

Treasuries that are being issued right now are not callable. The last callable treasury was issued in the mid 1980s.

[metalman]

Re: Mish predicts no inflation Poom

Have no clue, but I think it may happen sooner than we think--especially if Richard Russell's "bond vigilantes" react poorly to the trillion dollar deficits "as far as the eye can see".

I've wanted to get short treasuries in a big way for some time, but I'm worried about getting kicked in the teeth by our friends at the Fed...

i'm waiting for itulip's 'time to short usa treasuries'.

[metalman]

Re: Mish predicts no inflation Poom

I followed the link to Mish's site and ended up reading his blog entry that comes to a conclusion that flies in the face of everything that I've learned from Bart's awesome charts.

I'm simple and try to remain objective. Bart who? I don't know Bart from a hole in the wall, but his charts on the subject of money/credit supply prove that Mish is either misinformed or lying. Hope to meet Mish someday, he must be one funny dude.

mish is a sloppy analyst but makes it up in volume.

[metalman]

Re: Mish predicts no inflation Poom

Treasuries that are being issued right now are not callable. The last callable treasury was issued in the mid 1980s.

joy appears to be correct on this point...

[bart]

Re: Mish predicts no inflation Poom

I followed the link to Mish's site and ended up reading his blog entry that comes to a conclusion that flies in the face of everything that I've learned from Bart's awesome charts.

I'm simple and try to remain objective. Bart who? I don't know Bart from a hole in the wall, but his charts on the subject of money/credit supply prove that Mish is either misinformed or lying. Hope to meet Mish someday, he must be one funny dude.

Bart at least likes to think he's sometimes a funny dude... :eek: ... but more seriously, Mish & I have spoken many times over the years, especially when I was helping him to put together his M Prime series of money supply charts (they're similar to the Austrian money supply concepts of TMS or AMS). I was even the one that came up with the name M Prime. I'm no longer helping him in any way since the blowup about my ESF charts and the dollar intervention issues last August.

As can be seen by reading between the lines on many of his posts, I became aware that his command of many of the actual facts about the components of money supply in both the US & Japan was lacking.

The bottom line - I believe it's wise to be as objective as one possibly can.
I'm fallible and may have missing data myself and goodness knows I've made my share of mistakes over the decades, but I remain very far from comfortable with Mish's approach and also his lack of attention to and knowledge of various facts and economic basics... and my lack of comfort preceded the blowup about the ESF charts by years.

[GRG55]

Re: Mish predicts no inflation Poom

I think the one point where inflationists and deflationists agree is that the INDIVIDUAL PURCHASING POWER is gowing to go down. In other words the G7 people will witness a decreasing ability to aquire staple goods (which is poetic justice due to the fact they don't make many anymore), and this will affect their matierial wealth...

Any "deflationist" that believes this is not a deflationist [and apparently doesn't know it :rolleyes: ]...

[Spartacus]

Re: Mish predicts no inflation Poom

Any "deflationist" that believes this is not a deflationist [and apparently doesn't know it :rolleyes: ]...

In a deflation, purchasing power of a dollar rises, but only for things that remain available. People are a different matter.

those with jobs and a large amount of capital gain purchasing power (if and only if salaries are not decreased).

So individuals who keep their job & the salary's not clawed back gain purchasing power. But since deflations in the past have been accompanied by lots of job losses, all others (those who lose their jobs or get salaries clawed back) lose.

and purchasing power increases only for whatever's still available - many goods and services may go off the market if there's no profit in them. I would count this as decreased purchasing power.

IMHO it's a tossup whether overall purchasing power rises or falls. Since GDP falls, It may be that overall, aggregate "purchasing power" declines.

This is just my analysis on reading you, though ... I don't know if this is what the deflationists in question meant.