Shalom Hamou

Early Look: Missing the Reflation Trade

Read this article: "Ron Paul vs. Bernanke". It is well documented. illustrated with fun picture and video and accompanied with relevant quotes:

<i>"I will argue here that, to the contrary, there is much that the Bank of Japan, in cooperation with other government agencies, could do to help promote economic recovery in Japan.

Most of my arguments will not be new to the policy board and staff of the BOJ, which of course has discussed these questions extensively.

However, their responses, when not confused or inconsistent, have generally relied on various technical or legal objections—- objections which, I will argue, could be overcome if the will to do so existed."</i>

Prof. Benjamin Shalom Bernanke
<b>Japanese Monetary Policy: A Case of Self-Induced Paralysis?</b>
For presentation at the ASSA meetings, Boston MA,
January 9, 2000.

Read: Prepare for the Crash, The Age of Turbulence.

"Plea for a New World Economic Order."

Expect the Unemployment Rate to Increase

The most dangerous for employement us still the upcoming Liquidity Trap:

See:

Are We in the Keynes' Liquidity Trap, Yet?
blog.yield-curve.net/2...

The Risk in Long-Term Interest Rates and Stagflation.

You are probably right


On Jun 15 02:53 AM Fighting Yoda wrote:

> "So the risk in long-term interest rate is the dreaded Keynes' Liquidity
> Trap." - The answer to the inflation/deflation money printing conundrum
> is in the liquidity trap. Fed can print all the money but if they
> don't come to get it – its’ all a waste. Fed is lowering its lending
> standards - to simply give money away - but few takers. The few takers
> are all in the business if speculation - that is where the money
> is going - commodity speculation.

The Risk in Long-Term Interest Rates and Stagflation.

In an economy the debt is what some participants owe others, gloabally it is a wash. An economy is not a household it doesn't have to be thrifty.

The problem in a liquidity trap is that there is too much thrift.

The real problem of credit is the explosion of income/wealth disparity it causes and the instability of the system it generates.


On Jun 14 08:19 PM dawkins wrote:

>
> Total credit market debt as a percentage of GDP has risen from 130%
> of GDP in 1952 to 350% of GDP today. The various bailout and stimulus
> schemes enacted in the last year will drive this percentage above
> 400% in the near future. When a country allows this much debt to
> accumulate versus its GDP, they have done something seriously wrong.
> The country’s politicians, business leaders, and citizens have all
> contributed to this disaster.
>
> good articles... starturl.com/cgemr

The Risk in Long-Term Interest Rates and Stagflation.

In case of a normal or steep yield curve the competition drive the price to its marginal cost of production the cost of the most expensive unit that is consumed.

When the yield curve is inverted thhe producer prefers to keep his mineral in the ground as a short term asset rather than extract it and invest the money in long term assets.

Pleas read my article: Commodity Conundrum Solved: The Hidden Parameter in Interest Rates:

seekingalpha.com/artic...

So when the yield curve becomes normal or steep " it's only a matter of time until producers get greedy and start pushing consumption-eager to be the first out of the gate and to profit from increased fuel prices. Once that happens, fuel prices-the current prime driver of increased consumer costs-will come down significantly. "

Not before


On Jun 14 08:18 PM LilBob wrote:

> With consumption down, and prices up because

It's the Bond Market, Stupid

Never mind innflation: the only factor in long-term interest rates are:

-Short Term Rates.

-Volatility of Interest Rate.

See my articles:

Credit Free Economy: A Plausible Alternative, Part I

seekingalpha.com/artic...

The Risk in Long-Term Interest Rates and Stagflation.

seekingalpha.com/insta...