Higgenbotham wrote: Mon Nov 07, 2022 5:09 pm
The 3 phases of a bull market. So far as I know, the credit for this concept goes to the late, great Richard Russell.
Good description, thanks for posting. I have seen similar descriptions with more that 3 phases.
One of the more common post bubble completed crash indicators is ordinary people saying"I will never invest in that market again"
Cool Breeze wrote: Mon Nov 07, 2022 1:46 pm
I did, I'm not sure you have, or at least understand the clear fact that he was wrong, proven at this point (regarding deflation). He himself has admitted as much.
John made an error when he said that he made an error. I told him so in a post.
Deflation is on its way
Based on extreme government spending post-GFC and just plain silly government spending re:Covid, I argued with John that inflation was coming. He implied I was non compos mentis. So far I have been right (especially so far this decade).
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
Tom Mazanec wrote: Tue Nov 08, 2022 7:39 am
Based on extreme government spending post-GFC and just plain silly government spending re:Covid, I argued with John that inflation was coming. He implied I was non compos mentis. So far I have been right (especially so far this decade).
Yes, you were right that inflation did come. Since economic depression causes deflation, this will also come, its just a matter of time
Historically gold has been an inflation hedge and a safe haven, and therefore generally rises with increasing inflation.
Deflation would therefore also deflate the gold price in theory. Cash would be the best investment in these circumstances. But I suspect we will be entering unchartered waters so what happens to gold is a guess.
If we have hyperinflation as Vince predicts and gold forms part of the global monetary base then I can only imagine that the price of gold goes through the roof.
Does anyone have any predictions?
vincecate wrote: Mon Nov 07, 2022 11:09 am
If you imagine the dollar getting hyperinflation and over some period becoming worthless, then the only remaining reserves many central banks will have will be gold. At that point the world currencies have gold backing. There will be some huge value changes before things stabilize but a dollar failure could send the world back to gold backed money.
I think that this is where our opinions differ. I recognise the possibility of dollar hyperinflation but believe that a solution will be found prior to hyperinflation. There is nothing of sufficient size to replace it, not even a basket of assets or currencies. Can you imagine the global economic devastation, the debt crisis, wars and human starvation with hyperinflation on the worlds reserve currency?
Hyperinflation is a death spiral. Once started countries almost never find the solution. If Bitcoin's price went up by a factor of 100 it would be of sufficient size. For Bitcoin that is just a normal 5 to 8 year type change. Yes, dollar hyperinflation is a huge crisis for the world. A kind of generational crisis, you might say.
Cool Breeze wrote: Mon Nov 07, 2022 1:46 pm
I did, I'm not sure you have, or at least understand the clear fact that he was wrong, proven at this point (regarding deflation). He himself has admitted as much.
John made an error when he said that he made an error. I told him so in a post.
Deflation is on its way
Ok. So that I can understand, what does this mean, "Deflation is on its way"? Or rather, what do we see from now through 2023 or 2024? That might be the better question.
Tom Mazanec wrote: Tue Nov 08, 2022 7:39 am
Based on extreme government spending post-GFC and just plain silly government spending re:Covid, I argued with John that inflation was coming. He implied I was non compos mentis. So far I have been right (especially so far this decade).
Yes, you were right that inflation did come. Since economic depression causes deflation, this will also come, its just a matter of time
This could be the case, but again, time frame is crucial. That's why what Tom, Vince and I have described should rightly be lauded.
Economic depression also causes lack of productivity. It is equally likely that we have sustained inflation due to the lack of production of all sorts of goods, or energy (inputs). That is what we believe will happen, and if they pivot, the deflationistas will be wrong once again - the cherry on top. So I'm curious, when will they learn? Or, how many times do they have to be wrong before they learn? It's almost like talking to bish
