http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/ Investing and Trading News, with a Contrarian, Sarcastic Twist! Tue, 31 Jan 2012 08:31:57 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/comment-page-1/#comment-685 Gary Schilling’s August 2010 Outlook on Deflation, Unemployment, and Stocks — The Contrary Investing Report Sat, 14 Aug 2010 20:11:17 +0000 http://contraryinvesting.com/?p=1504#comment-685 [...] Also see Schilling (and us!) in Canada’s Globe and Mail talking some deflation investing strategy. [...] [...] Also see Schilling (and us!) in Canada’s Globe and Mail talking some deflation investing strategy. [...]

]]> http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/comment-page-1/#comment-662 The Fed, Bernanke on Deflation and Quantitative Easing: August 10, 2010 — The Contrary Investing Report Tue, 10 Aug 2010 19:36:14 +0000 http://contraryinvesting.com/?p=1504#comment-662 [...] consumer credit should continue to decline – which is deflationary.  As the unwinding of consumer credit continues, the Fed will likely need to decide whether [...] [...] consumer credit should continue to decline – which is deflationary.  As the unwinding of consumer credit continues, the Fed will likely need to decide whether [...]

]]> http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/comment-page-1/#comment-632 ETF DAILY NEWS » Why Aren’t Long Term Interest Rates Skyrocketing? (TBT) Thu, 05 Aug 2010 20:24:11 +0000 http://contraryinvesting.com/?p=1504#comment-632 [...] Globe and Mail: Deflation Requires New Strategy for Investors [...] [...] Globe and Mail: Deflation Requires New Strategy for Investors [...]

]]> http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/comment-page-1/#comment-544 Nlevis Wed, 28 Jul 2010 19:48:12 +0000 http://contraryinvesting.com/?p=1504#comment-544 I must say the deflation argument is a fallacy. Every day the US government prints more money. We create this money out of thin air. Those with leveraged balance sheets and fixed rates of interest on their debt such as a mortgage have no incentive to pay their loan off soon as they are aware that the value of the dollar compared to, say, food prices is only going to fall in the next five years. Demographics neccessitates this problem as baby boom generation retirees will be drawing on Social security and medicare benefits that the government has already spent.... We will simply have to print more money than ever as we have to pay the elderly and sick to NOT go to work in the morning. The US also has very few young people coming into the workforce which makes us a nation of speculators not real goods producers.... As the value of dollars falls relative to food, energy, metals, etc... foreign investors will need a higher interest rate to compensate. This will cause deflation yes, but only to stock and bond values relative to food and farmland prices. Once interest rates tick up, the companies looking to borrow to fund growth will become much more conservative. Also, the internet is killing jobs. Look at Amazon.com and think about how many jobs were lost from bookstores, CD stores, retail outlets, etc.... This transition to a 1984 type economy is most definitely deflationary, but that deflation is US centric. Prices and profit margins will come down, but commodity prices will go up as investors ditch our treasuries and buy things like food, rent, etc.... Anyways, I enjoyed this article and think its important to discuss these topics... Again, I feel we should put bounties on Osama Bin Laden and scrap the wars in other countries. We will go bust fighting wars all over the globe -- its just a matter of assets minus liabilities and right now our balance sheet is more like that of a Pfizer than a Berkshire -- sure earnings are strong and cash flow is good, but debt nevertheless in the form of unfunded liabilities is going to hamper growth and spur commodity price increases in the future.... Remember, we are having a jobless recovery due to emerging monopolies such as Amazon.com etc... as the world "flattens." This does mean that the Amazons and Mcdonalds will face pricing pressure, but it does not mean that Soybeans, Silver, Palladium, Corn, or Lumber prices will fall anytime soon........ Sugar for example is far cheaper than it was in the 1970's...... So the big names with no jobs are going to have some backlash and deflation as America increasingly becomes a country with no middle class... All my opinions.... long DBA short IWM I must say the deflation argument is a fallacy. Every day the US government prints more money. We create this money out of thin air. Those with leveraged balance sheets and fixed rates of interest on their debt such as a mortgage have no incentive to pay their loan off soon as they are aware that the value of the dollar compared to, say, food prices is only going to fall in the next five years. Demographics neccessitates this problem as baby boom generation retirees will be drawing on Social security and medicare benefits that the government has already spent…. We will simply have to print more money than ever as we have to pay the elderly and sick to NOT go to work in the morning. The US also has very few young people coming into the workforce which makes us a nation of speculators not real goods producers…. As the value of dollars falls relative to food, energy, metals, etc… foreign investors will need a higher interest rate to compensate. This will cause deflation yes, but only to stock and bond values relative to food and farmland prices. Once interest rates tick up, the companies looking to borrow to fund growth will become much more conservative. Also, the internet is killing jobs. Look at Amazon.com and think about how many jobs were lost from bookstores, CD stores, retail outlets, etc…. This transition to a 1984 type economy is most definitely deflationary, but that deflation is US centric. Prices and profit margins will come down, but commodity prices will go up as investors ditch our treasuries and buy things like food, rent, etc….
Anyways, I enjoyed this article and think its important to discuss these topics… Again, I feel we should put bounties on Osama Bin Laden and scrap the wars in other countries. We will go bust fighting wars all over the globe — its just a matter of assets minus liabilities and right now our balance sheet is more like that of a Pfizer than a Berkshire — sure earnings are strong and cash flow is good, but debt nevertheless in the form of unfunded liabilities is going to hamper growth and spur commodity price increases in the future…. Remember, we are having a jobless recovery due to emerging monopolies such as Amazon.com etc… as the world “flattens.” This does mean that the Amazons and Mcdonalds will face pricing pressure, but it does not mean that Soybeans, Silver, Palladium, Corn, or Lumber prices will fall anytime soon…….. Sugar for example is far cheaper than it was in the 1970’s…… So the big names with no jobs are going to have some backlash and deflation as America increasingly becomes a country with no middle class… All my opinions…. long DBA short IWM

]]> http://contraryinvesting.com/deflation/deflation-requires-new-strategy-for-investors-the-globe-and-mail/comment-page-1/#comment-498 Jeremy Grantham’s 2010 Q2 Newsletter: Deflation is Here — The Contrary Investing Report Tue, 20 Jul 2010 19:09:56 +0000 http://contraryinvesting.com/?p=1504#comment-498 [...] The Globe and Mail: Deflation requires new strategy for investors [...] [...] The Globe and Mail: Deflation requires new strategy for investors [...]

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