tag:blogger.com,1999:blog-6677177981626392420.post890305667306829321..comments2012-07-15T20:27:07.350-07:00Comments on Will May's page: Why I wouldn't bet on a currency crisisWill Mayhttp://www.blogger.com/profile/11307726180310118947noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6677177981626392420.post-46094980557060745932012-05-24T05:29:02.331-07:002012-05-24T05:29:02.331-07:00May 2012, and it hasn't hit the fan yet.
I gi...May 2012, and it hasn't hit the fan yet.<br /><br />I give it another 12-24 months, tops.Denis Goddardhttps://www.blogger.com/profile/14456768099243698518noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-78819377166003400222011-05-08T23:34:22.190-07:002011-05-08T23:34:22.190-07:00@Denis
Its a good site. They have few good books w...@Denis<br />Its a good site. They have few good books worth checking out as well. Also, they are the creators of the documentary film and book of the same name, <a href="http://www.iousathemovie.com/" rel="nofollow">I.O.U.S.A.</a> starring former comptroller general, David Walker.<br /><br />@Skeptikos<br />Bonds:<br />Demand requires trust and even the biggest, long-time buyers are running out of faith, especially in paper assets. There are far more profitable investment opportunities available to them than interest-bearing IOU's that might never pay out.<br /><br />24 Months:<br />Well, I don't know what Denis had predicted but I'm being cautious -- perhaps even hopeful -- when I say 24 months. I want to say 12, however, the Fed has surprised me before at its ability to drag out the inevitable correction -- far longer than I'd imagined possible.<br /><br />But as they say, nothing lasts forever.The Grand Poobahhttps://www.blogger.com/profile/18353985766521366841noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-9508291430644646832011-05-08T22:18:40.202-07:002011-05-08T22:18:40.202-07:00Zeus:
In regards to the CPI, good for you.
In reg...Zeus:<br />In regards to the CPI, good for you.<br /><br />In regards to bonds, you're forgetting that the return changes in response to supply and demand. A prediction which doesn't take that into account is useless. And "over the next 24 months" is a pretty major step backwards from Denis' "immediately". Plus, the interest rates on bonds are pretty low (3.25%), which is really, really bizarre if investors think they're a worthless investment.<br /><br />Though I have a few disagreements with Butler's analysis, my big counterarguments have already been posted as the blog.Will Mayhttps://www.blogger.com/profile/11307726180310118947noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-39262213264606454202011-05-08T16:05:02.323-07:002011-05-08T16:05:02.323-07:00Thanks, Zeus, for the link to dailyreckoning. I ha...Thanks, Zeus, for the link to dailyreckoning. I had never seen that site before. I like it.Denis Goddardhttps://www.blogger.com/profile/14456768099243698518noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-78836318133818270972011-05-08T15:15:20.025-07:002011-05-08T15:15:20.025-07:00Well, just as you dimiss the Mises Institute out o...Well, just as you dimiss the Mises Institute out of hand as "not real economics" without rebutting their conclusions, I dismiss the veracity and reliability of the CPI as "not real numbers".<br /><br />And yes, with S&P's still fairly recent negative outlook on bonds combined with their worthlessness as an investment as compared to other, stronger investment opportunities, I expect their sales to decline exponentially over the next 24 months as the economy moves closer to tanking completely. <br /><br />http://is.gd/QRJLgk<br /><br />I invite you to read <a href="http://is.gd/HpmENA" rel="nofollow">It's the End of The Dollar As We Know It</a> by John Butler, Managing Director and Head of the Index Strategies Group at Deutsche Bank in London.The Grand Poobahhttps://www.blogger.com/profile/18353985766521366841noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-71319988245866616552011-05-08T14:06:51.398-07:002011-05-08T14:06:51.398-07:00[Mises.org, I should have said.]
Doesn't surp...[Mises.org, I should have said.]<br /><br />Doesn't surprise me that you disagree.<br /><br />1) I think we're at the highest CPI value about 95% of the time.<br /><br />2) They can always lower the price.<br /><br />3) Raising reserve requirement wouldn't bankrupt banks. Banks would raise the price of loans-- charge higher interest rates-- to make up for it.Will Mayhttps://www.blogger.com/profile/11307726180310118947noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-89363860263165588792011-05-08T12:45:25.918-07:002011-05-08T12:45:25.918-07:00Will, thank you so much for taking the time to pos...Will, thank you so much for taking the time to post this analysis. Of course, I respectfully disagree with the conclusion.<br />1) The charts you use to back up your position show the highest price inflation, and the lowest value of the US dollar, in the duration of the chart.<br />2) The assertion that "If inflation starts rising significantly, [the Fed] can sell some of its $2.7 trillion worth of assets for dollars"<br />I disagree. Most of those assets are "toxic" assets that the Fed bought precisely because they were *not* marketable.<br />3) "The Fed can also raise reserve requirements for banks"<br />Only if it wants to bankrupt them. The banks are making great profits now, but only via the effectively free money they get from the Fed.Denis Goddardhttps://www.blogger.com/profile/14456768099243698518noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-63091969192934575272011-05-08T02:21:16.649-07:002011-05-08T02:21:16.649-07:00The sad truth is that Mises.com is all fake econom...The sad truth is that Mises.com is all fake economics. No one there cares about reality, the conclusions are already known. All that's needed is a serious-sounding excuse to believe the Rothbard-given truth. (Rationalizing, not rationality.) It's not even real Austrian economics.<br /><br />About the CPI in real life:<br /><br />http://www.slate.com/id/2278623/<br />(Smaller packages can't hide from the CPI.)<br /><br />Are you predicting that people will stop buying bonds in the near future? How much do you want to bet?<br /><br />Are you predicting that the Euro will collapse in the near future? How much would you like to bet?Will Mayhttps://www.blogger.com/profile/11307726180310118947noreply@blogger.comtag:blogger.com,1999:blog-6677177981626392420.post-54658060512202469252011-05-07T22:52:31.443-07:002011-05-07T22:52:31.443-07:00The adjunct scholar of the Mises Institute, among ...The adjunct scholar of the Mises Institute, among others, begs to differ. Your reliance on the CPI (an imaginary number based on assumptions made by -- surprise, surprise! -- a government agency) is the fly in your ointment. <br /><br />http://is.gd/OBbK0z<br /><br />One place inflation is "hiding" is in groceries. The manufacturers have been reducing the amount of goods in their packages and keeping the prices relatively the same.<br /><br />http://is.gd/AYtv67<br /><br />As for the Fed's "assets", any such sales entirely depend on whether anyone is willing to buy.<br /><br />On the Euro issue, that scenario doesn't consider what happens if the Euro fails first.The Grand Poobahhttps://www.blogger.com/profile/18353985766521366841noreply@blogger.com