deflation cheapseats deflation
oil responds to the economy the economy doesn't respond to oil
if oil goes to "below 80-70" (at that point stock market will be much lower) and the global economy picks up (starts consuming more oil than recent past) than oil will go back up in response.....
deflation is so much worse than inflation....especially when you are sitting on gobs of bad debt......
anywho time will tell
oil responds to the economy the economy doesn't respond to oil
if oil goes to "below 80-70" (at that point stock market will be much lower) and the global economy picks up (starts consuming more oil than recent past) than oil will go back up in response.....
deflation is so much worse than inflation....especially when you are sitting on gobs of bad debt......
anywho time will tell
just look to recent past
did oil follow or lead the WORLD stock markets up? clearly the answer is follow
nobody was saying lower oil is good for the economy when the crack cocaine credit lines were flush did they?
now currently are the WORLD stock markets or oil leading the way?
the WORLD markets lead (fell first) and now oil is responding
and whenever the WORLD markets bottom and start moving up again
oil will be right on its coattails going up again
its quite clear taking a longer term view of things......
i use the term WORLD because oil consumption isn't just about the US anymore obviously
hno::cripwalk::cripwalk::cripwalk::cripwalk::cripwalk::toast:in the late 60's oil moved up and it shut things down until wages caught up to it, then by the early 70's ecomony was doing generally good. the oil embargo of 1979 or 1980 brought gas lines, limited supply, high prices and so-forth, economy went into the shitter with 21% interest rates, oil then fell and the economy took off in the 80's. j6p and all consumers are just that, consumers, and any discretionary income they have will be used for something other than savings, thats the demand side...profits of corporations will be seen as growing with cost of oil down, thats a positive need for more jobs, and more jobs....blah...blah...blah...and thats the supply side...
here is just one paragraph from a bloomberg article, argue with them...
`Reacting Favorably'
``The market is reacting favorably to the prospect of oil falling to a level that will not ignite inflation or crush global growth, nor force central banks to raise interest rates,'' said Brian Gendreau, investment strategist at ING Investment Management in New York. Gendreau is part of a group that makes asset-allocation decisions governing funds with a total of $18 billion
of course, unless you manage $20 billion...
`Reacting Favorably'
``The market is reacting favorably to the prospect of oil falling to a level that will not ignite inflation or crush global growth, nor force central banks to raise interest rates,'' said Brian Gendreau, investment strategist at ING Investment Management in New York. Gendreau is part of a group that makes asset-allocation decisions governing funds with a total of $18 billion
of course, unless you manage $20 billion...
of course the talking heads saying that on oil...that's the near term bullish thinking to keep bulls in the markets.....
they always find bullish excuses.....
this isn't your daddy's stagflation this is much different
we saw the biggest worldwide boom (every fucking stock market was WAY up from 2002-2007 US went nowhere compared to most) we've seen in a long time and it central core structure that allowed it to boom for way to long was our central banking system specially the easy credit of the US
now everybody including the china's, brazil, india's you name it will follow our lead and that's gonna hurt many a corporation regardless of how the lower oil helps their costs
the world needs us to consume more and more to continue the games....they don't have a strong middle class to suck up all the overcapacity that was created domestically......we are now slowly spilling over to them
they always find bullish excuses.....
this isn't your daddy's stagflation this is much different
we saw the biggest worldwide boom (every fucking stock market was WAY up from 2002-2007 US went nowhere compared to most) we've seen in a long time and it central core structure that allowed it to boom for way to long was our central banking system specially the easy credit of the US
now everybody including the china's, brazil, india's you name it will follow our lead and that's gonna hurt many a corporation regardless of how the lower oil helps their costs
the world needs us to consume more and more to continue the games....they don't have a strong middle class to suck up all the overcapacity that was created domestically......we are now slowly spilling over to them
of course the games aren't
i'm just saying the problem is to big to fight it aka the deflationary forces.......
you realize almost every country in the world has a housing bubble right? many of those are just in the beginning stages of folding
this whole gloom and doom thing is far bigger than just us and housing and banks....that's missing the big picture.........depressions (not saying we are heading for one just yet) when they come are world events not one country events.....entire world was in a depression last time it came.....
i don't need any excuses
if dow doesn't get to sub 10000 by 2009
i'll eat my words
i'm not gonna whine bitch or complain about it....
i'm just saying the problem is to big to fight it aka the deflationary forces.......
you realize almost every country in the world has a housing bubble right? many of those are just in the beginning stages of folding
this whole gloom and doom thing is far bigger than just us and housing and banks....that's missing the big picture.........depressions (not saying we are heading for one just yet) when they come are world events not one country events.....entire world was in a depression last time it came.....
i don't need any excuses
if dow doesn't get to sub 10000 by 2009
i'll eat my words
i'm not gonna whine bitch or complain about it....
but of course
honestly the big reason i do it is it helps me develop my economic understanding better as people give me counterpoints to my various arguments/rants.....
i'm a work in progress we all are...and i'll never be right on everything not even close to it.....
arguing and discussing allows you to understand things better
much better than introspective study can.....
honestly the big reason i do it is it helps me develop my economic understanding better as people give me counterpoints to my various arguments/rants.....
i'm a work in progress we all are...and i'll never be right on everything not even close to it.....
arguing and discussing allows you to understand things better
much better than introspective study can.....
and here is what the koreans have to say
Aug. 6 (Bloomberg) -- The Bank of Korea may keep interest rates unchanged tomorrow after the economy grew at the slowest pace in more than a year and oil prices fell from a record.
Governor Lee Seong Tae and his six colleagues will leave the seven-day repurchase rate at a seven-year high of 5 percent tomorrow, according to 13 of 19 economists surveyed by Bloomberg News. Six expect a quarter-point increase.
Lee must balance signs of a slowdown in domestic demand against his objective of controlling inflation that is running at the fastest pace in a decade. Ssangyong Motor Co. and Hyundai Motor Co. are among companies that have reported declining sales as Korean consumers rein in discretionary spending because of a surge in fuel and food costs.
``The central bank still faces a big dilemma between growth and inflation,'' said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. ``A rate hike seems unlikely this year as oil prices fall and domestic demand weakens.''
Faster inflation is damping confidence worldwide and weighing on demand by eating into household incomes and squeezing corporate profits
of course, they are just a small, insignificant country, so i imagine they don't count either...
Aug. 6 (Bloomberg) -- The Bank of Korea may keep interest rates unchanged tomorrow after the economy grew at the slowest pace in more than a year and oil prices fell from a record.
Governor Lee Seong Tae and his six colleagues will leave the seven-day repurchase rate at a seven-year high of 5 percent tomorrow, according to 13 of 19 economists surveyed by Bloomberg News. Six expect a quarter-point increase.
Lee must balance signs of a slowdown in domestic demand against his objective of controlling inflation that is running at the fastest pace in a decade. Ssangyong Motor Co. and Hyundai Motor Co. are among companies that have reported declining sales as Korean consumers rein in discretionary spending because of a surge in fuel and food costs.
``The central bank still faces a big dilemma between growth and inflation,'' said Lee Sang Jae, an economist at Hyundai Securities Co. in Seoul. ``A rate hike seems unlikely this year as oil prices fall and domestic demand weakens.''
Faster inflation is damping confidence worldwide and weighing on demand by eating into household incomes and squeezing corporate profits
of course, they are just a small, insignificant country, so i imagine they don't count either...
huh that backs up my deflationary tendencies
and my reasoning of why oil is falling its in response to slowing growth worldwide.....every emerging market is starting to see signs of this
in the booming emerging markets the worry is slowly shifting from inflation to growth now it takes time....its not a light switch you flip on and off
slowing growth is deflationary by nature
increasing growth is inflationary by nature
inflation is only a problem at turning points when its eating away at the growth at the end of a inflationary growth cycle
obviously this is a bit to simplistic with central banks manipulting interest rates vs. the free markets but....the overall theme is correct
and my reasoning of why oil is falling its in response to slowing growth worldwide.....every emerging market is starting to see signs of this
in the booming emerging markets the worry is slowly shifting from inflation to growth now it takes time....its not a light switch you flip on and off
slowing growth is deflationary by nature
increasing growth is inflationary by nature
inflation is only a problem at turning points when its eating away at the growth at the end of a inflationary growth cycle
obviously this is a bit to simplistic with central banks manipulting interest rates vs. the free markets but....the overall theme is correct
slowing growth is deflationary by nature
increasing growth is inflationary by nature
true, but until it reaches points of concern, where it really begins to hamper things, its just price movement relative to demand...noise...and right now and for the next few years deflation is not a concern to many beside yourself...every cb in the world is talking the need for concern of inflation, not deflation, deflation will only begin to hurt if demand picks up and prices do not, and that ain't about to happen anytime soon with the globalness of economy...anyway, i'll side with the big boys on this point...talking heads...however you wish to depict them....
increasing growth is inflationary by nature
true, but until it reaches points of concern, where it really begins to hamper things, its just price movement relative to demand...noise...and right now and for the next few years deflation is not a concern to many beside yourself...every cb in the world is talking the need for concern of inflation, not deflation, deflation will only begin to hurt if demand picks up and prices do not, and that ain't about to happen anytime soon with the globalness of economy...anyway, i'll side with the big boys on this point...talking heads...however you wish to depict them....
if demand picks up?
demand falling which is why prices will drop is the reason for deflation?
obviously deflation is no where near a problem yet overseas
i'm talking at home and its affect on corporate profits
is dollar getting stronger vs. other fiat or at least seem to be going sideways? are these central banks gonna continue to move towards more cutting while we stay stagnant helping that trend continue? is domestic demand going to continue to fall as we sitting on gobs of debt and our banks continue to struggle?
yes is my answer to them all
also the deflation i'm talking about is relative to currently high prices!!
i'm not saying prices gonna fall to that in the 1980s or something.....just fall relative to recent history last year....CPI/PPI....with many things like homes falling extremely hard....while things like food won't fall a ton if any.....i'm talking overall economy....from homes, to flat screen tvs, to dvd players, to furniture, to vacations, to airlines, to hotel stays, to subs at the sandwich shop....to whatever the fuck....all that shit added up.....CPI/PPI will go negative i'm guessing by 2009
deflation doesn't become a big problem until you cut to zero and there is still no demand....aka what happened in japan....
US now at 2% not as much room to that point of question....unlike the emerging markets that have yet to really cut
demand falling which is why prices will drop is the reason for deflation?
obviously deflation is no where near a problem yet overseas
i'm talking at home and its affect on corporate profits
is dollar getting stronger vs. other fiat or at least seem to be going sideways? are these central banks gonna continue to move towards more cutting while we stay stagnant helping that trend continue? is domestic demand going to continue to fall as we sitting on gobs of debt and our banks continue to struggle?
yes is my answer to them all
also the deflation i'm talking about is relative to currently high prices!!
i'm not saying prices gonna fall to that in the 1980s or something.....just fall relative to recent history last year....CPI/PPI....with many things like homes falling extremely hard....while things like food won't fall a ton if any.....i'm talking overall economy....from homes, to flat screen tvs, to dvd players, to furniture, to vacations, to airlines, to hotel stays, to subs at the sandwich shop....to whatever the fuck....all that shit added up.....CPI/PPI will go negative i'm guessing by 2009
deflation doesn't become a big problem until you cut to zero and there is still no demand....aka what happened in japan....
US now at 2% not as much room to that point of question....unlike the emerging markets that have yet to really cut
"i'm not saying prices gonna fall to that in the 1980s or something.....just fall relative to recent history last year....CPI/PPI"
then deflation is not to be worried about as its movement you describe is not nearly vast enough to cause a japanese-like spiral...and recent history was a quick bubble for all sorts of items, services and the like....
then deflation is not to be worried about as its movement you describe is not nearly vast enough to cause a japanese-like spiral...and recent history was a quick bubble for all sorts of items, services and the like....
