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Hi greetings from Singapore & finally someone started a thread on HSI. 😗 -
I am not so advanced like Mercury here but I could at least understand half of what he is talking about. Yes it did trigger me to consider the possibility of the bullish trend pushing price to 30000 levels. -
Ah! The $64 million (billion, trillion) question! Where's the inflation? I'm afraid I can only offer my own thoughts on that....there are far better qualified people to be had elsewhere. Here are my personal thoughts/threads however.. QE was used (expanded the Fed balance sheet) to purchase US Treasury debt. Elsewhere same reason. It was intended that it would be rolled over as it matured and sold back to the market. Now there's doubt about that or at least some of it. It could just disappear. You're effectively buying your own debt...nice game, nice game....and if you can do that (with one hand on the money press) then you want it as cheaply as possible. If you're effectively the only buyer, you own the market and that itself drives yields lower. Wash,rinse,spin. Throw in some safe haven moments and you get to where we are today. Throughout the whole of the experiment, and that's what it is because no-one knows how this ends (although I expect badly) it became clear that the elites are getting richer...they were the ones with the assets after all. For assets include everything...stocks, property, antiques, paintings, wine etc. Everything Trump has in other words!. Their pay (board level) also got a huge boost in my opinion from performance related share prices due to unprecedented share buy backs - this is on going because credit has never been so cheap. Your pay almost certainly didn't increase. In fact in real terms it went backwards. Lots of studies support that thesis both in US/UK/Europe. The policy is now driving rates well below zero. Just when you thought rates can only go up from here (2016 low) they actually went lower and bonds were and still are the place to be! Wish I had bought Reagan's long term debt. I think this will continue and it links in with my thoughts about Japan the past two decades. Keeping rates below inflation (and they all do) effectively forces you to do your consumer bit and that was the justification/hope/smoke screen, take your pick!. We'll grow our way out of it - scenario 2 a few posts back. The wealth divide is a real concern now and they know it. In consumer led economies, if the consumer had access to that increased money supply and provides it with some velocity (i.e. gets it moving around the economy) THEN you get inflation. You don't have access to it.........yet. Assets are being held up by funny money. Any whiff the central banks (i.e who now ARE the market) will dial back causes immediate stock market roll overs. Draw your own conclusions. The other thought is simply this. Think of deflation as air leaving your tyre. You're pumping like mad to get it back in but however hard you try the tyre is getting flatter! The hole's too big. Deflation wins.....or if you manage to stabilise the pressure then stagnant growth at best. Possibly stagflation 70s style. Get the plaster on and whey, hey! Hyperinflation here we come. Hold gold. Just my penny worth!...and apologies for the length.
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