Anybody see global deflation looming here? How about an opinion from all you silent observers?

[Guest]

C'mon all of you silent iTulip hordes! Your multitude is growing like King Kong. Speak up on this question. Lots of us would like to get a glimpse of where the majority view is.

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[Chris]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Lukester, I don't know enough about macro-econ to give you an answer to your question (that's why I read here rather than write) but from collating opinion across sites, a lot of people are thinking that deflation is in the cards.

I know better because of iTulip

Rumour: ATM's in the UK are being emptied rather rapidly. Many are not giving cash at all in some places. People must be getting scared.

[sishya]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

I am not an expert. But I see Deflation in USA for the immediate horizon. Just like Rest of the World had more Inflation than USA in the last decade, Rest of the World will have more deflation in dollar terms. In countries where deflation is not very prominent, they will experience the corresponding currency depreciation with respect to US dollar.

Personally I am experiencing deflation.

[SpaceOptimist]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

The opinion of someone relatively new to all this? (Been paying attention for almost 2 years now.)

I'm going to stick with inflation, at least when measured in dollars. Maybe all currencies? Seems like everybody is in a hurry or about to be in a hurry to create more currency.

However it currently seems like there is a whole lot of deflation going on. I guess nothing is ever as it seems but lots of people seem to think that's the way we are going. Maybe that's a reason to take the other side of the trade?

[cbcc]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

K-Wave anyone?
I have been an ITuliper for 3 years and have vastly enjoyed reading comments.
I'm a Kondratief Theory advocate and see our current situation looking very much like what the cycle predicts. My only consternation is how to position myself for the bottom. Who will be the dominant economic power in the future. The American dynasty is over just like British after WWII.
Any thoughts?

[audrey_girl]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

again - no expert here; but outside of housing I see inflation everywhere in my personal experience (bread, milk, medical care, education, etc. etc.). As a student of and firm believer in peak oil, I also believe energy costs will continue to skyrocket in the future - greatly adding to the inflation. Finally adding in future trillion dollar deficits coming from Washington and I don't see how you can believe that we are about to embark on a deflationary future.

for what is is worth - my 2 cents

[mercerbear]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

I have such a hard time talking myself into deflation given all the economic dynamics that seem inflationary to me. That said, I can't explain what happened today with commodities (hard selling), the dollar (huge rally) and treasuries (negative yield??). Those three observations all point towards deflation, do they not? How is that possible when our government is creating so much money? I assume most of you have seen Bart's M3 projections. Is that not inflationary?

I used today as a buying opportunity to order more physical gold from my dealer and I even added shares of AUY which got absolutely slaughtered today. I still believe inflation will eventually rear it's head but I am awfully confused with what's going on in the market. I keep itulip open all day and scan threads hoping to gain insight.

I only have about 2% of my worth in traditional stocks. I have about 10% spread out between AUY, JJA and CEF, 20%-25% in gold and silver bullion and the remainder in cash (dollars and a considerable euro position).

I hope I'm positioned ok. I'm not sure if this helps any of the rest of you but there it is.

[Joy]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Deflation is always a policy choice. I think the FED would like to inflate but doesn't want to do it until inflation expectations have been squashed. The current deflation scare will continue until the last remaining Gold bug cries uncle. Lease rates tell me we are getting close to the end game. Best.

[we_are_toast]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

I have such a hard time talking myself into deflation given all the economic dynamics that seem inflationary to me. That said, I can't explain what happened today with commodities (hard selling), the dollar (huge rally) and treasuries (negative yield??). Those three observations all point towards deflation, do they not? How is that possible when our government is creating so much money? I assume most of you have seen Bart's M3 projections. Is that not inflationary?

I used today as a buying opportunity to order more physical gold from my dealer and I even added shares of AUY which got absolutely slaughtered today. I still believe inflation will eventually rear it's head but I am awfully confused with what's going on in the market. I keep itulip open all day and scan threads hoping to gain insight.

I'm in the same boat. I've got to believe that the CB's and governments around the world are seeing the disinflation and are trying hard for a Poom. Just not sure they can succeed. The confidence factor isn't looking good. Hey Ben! How about an emergency 1/2 point cut?!

[Digidiver]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

I believe we will be seeing deflation coming as there will be far too many goods and services fighting for the cash that will be available. I also see the strain on the Euro being good news for the dollar and counteracting much of the negative aspects of this crises. My 2 cents…;)

[mercerbear]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Yes, it's odd that the spot rate of gold has declined recently while the premium I pay per ounce for physical delivery of bullion has more than doubled. My dealer (Tulving) has run out of most popular 1 oz coins and his inventory now changes daily. Premiums have become outrageous recently. $50/ 1 oz Gold Eagle/Buffalo, $45/ Kruggerand etc. And, like I said, that's when he can even get anything in stock. It seems the disconnect between the paper market and the physical market is rapidly increasing. I'm not sure what the implication here is.

[chrisk]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

I still believe inflation will eventually rear it's head but I am awfully confused with what's going on in the market.

Think of it as a war between forces of deflation and forces of inflation. Most investors are trying to deleverage (reduce debt/risk), which causes deflation-like effects. But governments want to offset these effects by ADDING leverage (printing money or the like), because the majority of people don't want an economic depression.

On any given day, or month, either side might appear to be winning the war. But the safest bets are long-term ones, and it's a very safe bet that the money-printers will defeat the money-hoarders eventually (at least with respect to U.S. dollars). Very simply, it is in the interest of the large majority of Americans to reduce debt levels via inflation rather than via saving -- especially given that the U.S. as a whole owes money. And that large majority ultimately determines monetary policy (money-printing), by whom they elect.

In other words, ignore the short-term fluctuations

[Guest]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Well said. Plus "peak oil" coming up fairly soon won't exactly make production cost inputs get cheaper.

Think of it as a war between forces of deflation and forces of inflation. Most investors are trying to deleverage (reduce debt/risk), which causes deflation-like effects. But governments want to offset these effects by ADDING leverage (printing money or the like), because the majority of people don't want an economic depression.

On any given day, or month, either side might appear to be winning the war. But the safest bets are long-term ones, and it's a very safe bet that the money-printers will defeat the money-hoarders eventually (at least with respect to U.S. dollars). Very simply, it is in the interest of the large majority of Americans to reduce debt levels via inflation rather than via saving. And that large majority ultimately determines monetary policy (money-printing), by whom they elect.

In other words, ignore the short-term fluctuations

[bill]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Think of it as a war between forces of deflation and forces of inflation. Most investors are trying to deleverage (reduce debt/risk), which causes deflation-like effects. But governments want to offset these effects by ADDING leverage (printing money or the like), because the majority of people don't want an economic depression.

On any given day, or month, either side might appear to be winning the war. But the safest bets are long-term ones, and it's a very safe bet that the money-printers will defeat the money-hoarders eventually (at least with respect to U.S. dollars). Very simply, it is in the interest of the large majority of Americans to reduce debt levels via inflation rather than via saving -- especially given that the U.S. as a whole owes money. And that large majority ultimately determines monetary policy (money-printing), by whom they elect.

In other words, ignore the short-term fluctuations

yes and..
Many commodity related companies are raising cash and cutting back speculative capital intensive expansions. Investment funds are unwinding investment trades raising cash in a liquidity tight environment. Thus creating a dollar shortage as dollar traded commodities are sold raising the demand for dollars. I see this continuing as leverage trades unwind (yen,dollar carry) ,cash is king in a liquidity tight market. This process will continue weeding out the overleveraged and set a new floor in pricing.
That said the new administration needs to get an economy ramped up within 6-12 months of taking office. Commodities related to infrastructure/low carbon AE next bubble will be first to recover and may see spike in demand due to the cut back in production we are experiencing now resulting in low inventories.

[Guest]

Re: Anybody see global deflation looming here? How about an opinion from all you silent observers?

Great inputs. Won't more of you silent majority please post a reply? C'mon, you guys can be silent the rest of the year if you insist, just for once make yourselves all heard!!