Wednesday, May 09, 2007

Subflation

Subflation: Substandard growth. Sub Rosa inflation statistics. Subconcious subliterate populace. Subsequently; subsistence wages.

FOMC unchaged. IMO a lost opportunity. Not unexpected, just disappointed. M3 is out of control. Not just rising 11-13% but literally beyond out ability to manage the amount of money that spontaneously generates. M1 is actually down yet liquidity drowns us all. That said, we've got the makings of a percfect storm do we not? Subflation. Got a better word for what we are facing?

67 comments:

bohica said...

First?????

Don Imus' Colon said...

Hey hey! Ho ho!

Nappy haired hoez says what?

Aspeth said...

damndamndamndamndamn

Aspeth said...

This pic makes me think of Casey sucking his thumb, asking "why the blue ball go bye-bye?"

icup said...

"Got a better word for what we are facing"

shit-picnic?

king friday the 13th said...

the main difference between m1 and m3 is all of the DEBT being generated. m1 is a subset of m3, and only includes savings (broadly defined -- go look it up).

Consider:
- median home prices nationwide have declined y-o-y for the first time since 1930's.

- the US has had a negative savings rate for 24 consecutive months for the first time since the 1930's

- the DOW just completed the longest up streak since the 1920's.

- At over 300%, the total debt-to-GDP ratio for the United States is higher than the 250% it was in 1929.

- incomes and asset distributions in the US have not been this skewed since the 1930's. (i.e., the incomes and assets of the top 1% versus the other 99% is higher than any time since the 1930's).

Remember what event happened in the 1930's. Just keep voting Republican and as Casey would say "It's all good".

Benoit™ said...

@ Rob Dawg, headline a few months down the road: Subversive Serin Subpoenaed -- Subterfuge Subsides, Serin Submits

;-)

king friday the 13th said...

oh, and before you bash me as some left wing liberal nut-job, I have voted for Ron Paul in every presidental election.

But, sadly, it is too late. I used to think we would get by with a 70's style stagflation. But, now that we are in a global economy, wages will not keep up with the inflation coming down the pike...

Mozatta said...

Just a FYI for you peeps

via Snowflake... "There is nothing illegal about taking money out of a corporation as a “draw” or by borrowing from the corporation and paying it back (with proper documentation, etc). That’s what the lawyers told me. I just don’t want to be doing that too much ‘cuz the corp is not making much money yet. So it’s putting us deeper in the hole on a whole new level. The corp will be making money soon enough though."

So no fear, he is in the clear. The corp will be makin' money soon though. He's failed in every other venture, but this one is fool-proof

Bohica said...

So, how will this affect me?
I have money in the bank, little to no debt, and a fairly secure job for the foreseeable future.
Will the landscape become littered with Ruby Ridges?
Are we talking Mad Max?

P.S.
(I got one first in a row)

Rob Dawg said...

Subflation includes the true unemployment rate:

http://www.bls.gov/news.release/empsit.t12.htm

King XIII, do you really think party in power will make a difference? It didn't the last three times. Besides, what did Clinton w/Dem Congress, Clinton w/Rep Congress, Bush w/Rep Congress, Bush w/Dem Congress do differently?

As negative as we sometimes get this won't be the 1930s. Too many markets for our products. Too many economic friends that won't mind seeing us whipped but cannot afford to have us disabled.

The middle class is the target. We need to go back to the Rich/Merchantile/Working Poor model like it or not. We can't do it with inflation; people are too smart and mobile with their money. We can't do it with taxes, there's still enough democracy left to thwart the attempt. We will devalue and inflate.

Sweet Cashback said...

do differently?

They didn't spend, like KC, money they did not have. Can't lower taxes AND spend over your head. America will feel KC's financial pain soon enough....

Rob Dawg said...

Bohica,

The idea is to make that money in the bank worth less twice over. It won't buy as much and it won't be as liquid. While your job is too specific to speak to jobs in general will pay less over time. The govt may be able to restrict money flows but labor flows will always be beyond their control.

icup said...

so do we withdraw our retirement accounts to pay down our debts now, since it won't be able to buy as much in the future anyway?

or incur even more debt, and hope that our salaries get inflated to pay it all back and screw our creditors? assuming we get to keep our jobs...

or maybe we should all learn how to make sweaters and grow vegetables, so we have a marketable skill in the times ahead?

aaron said...

one word STEEL. as much as it seems overpriced right now....long term I think you can't go wrong. SID made me a right little profit these past few months. There are only so many natural resources. The fact that iron ore mines in Minnesota have opened back up to supply china with iron ore pellets for making steel speaks volumes.

jilly said...

@aaron

Interesting. When you look up the inside trades on RS and other steel giants, everyone at the top of the company is dumping their shares like they can't get rid of their own stock fast enough.

When insiders are selling as fast as they can, it's a big red flag. Steel is long term strong, always, but what's going on now is nuts. Kind of like real estate in 06.

jilly said...

Just in case you need some help:

http://finance.yahoo.com/q/it?s=RS

Arthur Wankspittle said...

Bit of reading for you all:
http://en.wikipedia.org/wiki/Stagflation

aaron said...

possible. However many insiders do a good bit of selling this time of year to pay tax bills. the total amount of insider selling was 1.2%. institutional holdings were 72% as of December 2006 with 271 different holders. A whole lot of confidence if you ask me.

Rob Dawg said...

Now we are talking commodity bubbles. When it comes to commodities I always go back to the Washington Monument. Yes, that obelisk in the Distric of Columbia. So important that the builders decided to cap it with the most wonderou, expensive rarest of all the metals. Aluminum. 100 ounces. The single largest piece in existence at the time. Yep, a couple trash can bags worth of soda can recycling. Same with gold in the last 20 years when enhanced extraction methods were employed. Commodities are priced on the margain. Not what they cost but what the last person is willing to pay.

Rob Dawg said...

oh, I forgot. Subflation includes the Substitution of lesser goods in the BLS inflation index. The converse is known as hedonic adjustments.

har said...

Could someone plz post link to Aspeths site? cant seem to google it.

thanks

lurker said...

http://12yearsofbeingannoyedbychloesevigny.blogspot.com/

Peripheral Visionary said...

I'm split between inflation and deflation. Inflation comes from an oversupply of money, but massive amounts of debt can soak up money very, very quickly.

To simplify it in the extreme: China has massive amounts of U.S. debt. If China demands payment on all that debt, but refuses to recycle the dollars back into new securities, liquidity in the U.S. can disappear overnight. As debt is defaulted on, the underlying assets drop in price as they're liquidated to try and cover the debt. Classic debt deflation, with declining prices rather than increasing prices.

If, on the other hand, the Chinese dump dollars and U.S. debt into the worldwide market, the dollar gets massively devalued, and the price of all imports (and commodities) goes through the roof, resulting in raging, runaway inflation in the U.S. (except in wages, of course.)

Difficult to see which way it will go. What's not difficult to see is that the U.S.'s collective lenders (mostly in Asia and the Middle East) have more control over its monetary future than the local authorities do.

all things good staff said...

Ads are back at IAFF

Anonymous said...

Inflation/Deflation who gives a rat's azz!

We need Rob Dawg and Nigel in the ring to end this butt sniffing, I'm better than you schtick that goes on now. How about a boxing match and duke it out. We're tired of you two cackling hens moping about touched unhatched eggs!

May 26th, Vegas 6pm - Bring on the destruction rather than the sissy myspace blogging feud!!

Rob Dawg said...

We need Rob Dawg and Nigel in the ring...

Nigel wins paws down. We don't have the same value system. Champion Nigel will be left there the undisputed winner. Nigel is clearly less immoral than Robert. Nigel is clearly less amoral than Robert. Nigel has no end of enumerable measures of self worth. Robert foolishly thinks there exist standards of worth that may defy enumeration. Nigel thinks brute force subsumes quality effort.

Nigel wins. Move along. Nothing to see.

Anonymous said...

Awww Dawg,

Don't give up that easy! It's not about morals or class or dignity. It's about apply the smack when a bombastic azzwipe makes a check out that his azz can't cash!

Lou Minatti said...

I have voted for Ron Paul in every presidental election.

What IS it with the Ron Paul cult? RON PAUL RON PAUL RONPAULRONPAUL.

Anonymous said...

Why does Robert Cote despise Nigel Swaby?

Because Robert secretly fears that he was perceived in a similar light as Nigel when he first started blogging?

No.

A dilettante amongst real planning professionals?

No.

A pseudo-intellectual pontificating to an empty house?

No.

Robert Cote is simply a SoCal Asshole

Serin is as Serin does... said...

I'm getting a "403 Forbidden" message when I try to access IAFF. Anyone else getting the same thing?

Any interesting speculation, or is it just Snowflake's mad tech skillz at work again?

Anonymous said...

2:35, I'm getting the same message. How can he expect us to keep coming back to a site that is not functioning?

BJ said...

@PV
To simplify it in the extreme: China has massive amounts of U.S. debt. If China demands payment on all that debt, but refuses to recycle the dollars back into new securities, liquidity in the U.S. can disappear overnight.

This statement is not accurate. The debt in question is not 'callable'. China can't demand immediate payment. Payment is scheduled as per the note (ie. type of treasury or investment article) involved. China can turn to the secondary markets to liquidate (convert to cash) their holdings in the notes though. This then can cause the underlying notes value to fluctuate, and therefore the derived yield.

ie. if I have a 5% yield 30 year note (with 30 years remaining) that is currently selling at a 50% discount, the actual yield on the note is now about 7.45%. (At the end of the term of the note, I end up receiving 5% accrued over the 30 years, AND the full face value of the note (2x LTCG on face value))

Anonymous said...

I was seeing the 404 error, but now it's "Your Website Has Been Suspended"

Joy.

BJ said...

@PV
( My last link went to profile not to posting, oops)

As per this that also means that the debt does not 'default'. The debt default actually works differently (see Russia).

Rob Dawg said...

Anon 2:35,
Try again. Not only cannot you link correctly but you violate all the rulez of being a competent troll. Let's all have a big "yawn" for today's pathetic RCS troll. "Yawn." Here's an idea. Take credit for your literary masterpiece(s) by identifying yourself. Better yet, please don't identify yourself but explain why you are posting anon. The twisted logic behind that post would spread great joy to so many. What? You don't want to amuse people when it is in your power? Selfish? Sick? A little of both at the very least. Come oh most venerable troll. Let us honor you. Reveal yourself so that you may reap the fruits of your efforts. What's that? You are ashamed of having done these deeds? No. Surely you are a cut above those you seek to lower. Surely there is another reason. Pray, sir tell us all who and why you make this effort.

BJ said...

@Anon 2:35

Smells like a Nigel post.. psychotic and completely off topic.. bleating/whining for attention... :yawn:

Humm, Rob Dawg.. can you look at the IP addr for the post? You can backtrace the IP addr to the locale/ISP.

Peripheral Visionary said...

@BJ: Of course the debt held by the Asian central banks is not "callable", but at present they are obligingly recycling it by buying new issues as the old ones expire. They get the dollars from the payment of principle at the expiration of the bonds, then turn around and send those dollars right back to the U.S. by buying the next issue.

All they have to do is stop buying the new issues. All those dollars paid for principal start piling up in the Asian banks (even faster than they're piling up now), draining cash out of the U.S. If the Federal government, and Fannie Mae/Freddie Mac, and Wall Street aren't able to sell bonds into Asia (and now the Middle East) because there is no appetite for them, the influx of dollars that the U.S. needs to stay afloat can dry up in a hurry.

If the buyers for new debt were to disappear, the U.S. would have a difficult time making the payments on the existing debt--because, after all, there's a very real Ponzi-scheme effect in play right now, where new debt is, in effect, being issued to make payments on existing debt. Let's just say that that dynamic should be familiar to the readers of this blog . . .

If payments aren't being made on current debt, then that debt defaults . . . whether or not it goes the Russian route or the Japanese route is the open question.

Rob Dawg said...

Chinese debt holdings are a good thing. They are neither massive nor do they have call features. At best they could unload at deep looses to our benefit. N.B. "deep losses" but then the joke was irresistable.

The US has an $11T economy with multiples of that in secondary impacts. The supermajority of that being justified by production, output, service provision, quality improvements, efficiency contributions. etc. Tradee deficits don't even cover the full spectrum of existing trade, only the old components of past models. The Japanese hold more and look what tat has gotten them these last 16 years.

Don't get me wrong. There is too much liquidity but luckily it is of an international nature. On those terms even our vastly diminished open economy stands head and shoulders above the rest. Germany just bumped their VAT to 19%. Why aren't they on the economic death row?

har said...

thnks 4 the link , lurker

Rob Dawg said...

Rob Dawg.. can you look at the IP addr for the post? You can backtrace the IP addr to the locale/ISP.

I could if I cared. The lawyers are after the criminal/slander/libel posts (I don't know which) parts of my recent fame. It is much easier to let these mayflies think they are stinging than to bother to swat. If they are the core perps they'll be addressed in Bristol Fashion.

Held Back By Marriage said...

Bohica--

If the Fed fails to curb inflation, your chunk of change in the bank will buy less than it can buy today. Potentially a lot less, depending on circumstances.

Some people think hyperinflation is around the corner but there's no way the US Government, no matter how f'd up we are regardless, will ever let the economy hyperinflate. No way.

In any case, a lot of people are saying that gold, silver, steel, etc., are worthwhile investments. I tend to think that's a load of crap-- the price of gold is only really based upon what people are willing to pay for it; the ultimate bubble magnet.

The real play is in the Euro or Yuan. These have value, even as fiat currencies, because of their sheer size. Also, inflation of the Euro or Yuan should be rare, at least more rare than the current inflating dollar.

Take some of your cash-- not all, probably not even half-- but some-- and buy FXE. This will guard you against dollar inflation, since as the dollar inflates it will be worth less Euro, and the price of FXE will naturally rise (as will the dividends).

Nigel, while holding his tiny wiener said...

None of you have any conception of verisimilitude. I do, however. I’m far more intelligible and articulate than the residuum of IAFF that populates EN, and it’s not at all because I have a Roget’s hunkering in the lee of my keyboard. No, I’m an erudite, and the rest of you are simpletons, and due to my superincumbent intelligence, I have an award-winning blog, and insolent, inferior ignoramuses have nothing. I have a resplendent pool, a luxuriant spa and an upscale car you could never afford, and you hippies just drive VW buses and idle by your computers gorging on Geritol because you’re all ancient and porcine.

Signed,

Nigel, the Tiniest, Smelliest, Baldest, Shortest, Sweatiest Prick of the Universe in Pleather.

(who wants to rim Casey something fierce)

Rob Dawg said...

Aspeth's sweet blog is worth a look. I'm not interested in delving into Caseyworld™ beyond whipping out my spray can and declaring the the area a dead zone. Aspeth does a great job going back and showing what we have long known; Casey is not the bumbling stooge of his IAFF persona.

You go Aspeth!

Rob Dawg said...

"Held Back" is right. National Hyperinflation is no longer possible in a modern international economy. There might be a case of universal hyperinflation but I can't imagine how it benefits anyone so I discount it. No one wants the Yen because of demographics. No one wants the Yuan because of politics. No one wants the USD because of economics. No one wants the EUD because of socialism. Pick your poison? There are too many variables. I know in my heart that universal healthcare is a bad thing but it may not be worse than what we have now. I know that a National VAT is a bad thing but it may not be worse than what we have now. I know that we need to raise fuel excise taxes but I suspect the diversions may do more harm than the additional revenues do good. Etc.

Tough to be da king.

Legion said...

@Ron and Aspeth

I agree about Aspeth's site. It's kind of like being a profiler and being able to delve into the inner mind of snowflake, with no editorials, bullshit or spin. Seeing the sites he visited, man what a desperate colossal asshole.

I think that is the reason he doesn't want a job...it would eat into his time for spending time on the internet pursuing ways to make money without having to work.

By the way, if he starts researching guns I would stay FAR FAR AWAY from any real estate get rich quick seminars.

Legion said...

@Aspeth

That last line of yours was hilarious.

Casey Serin also shows an interest in the “extreme sport” of Parkour. This is defined as “a physical art of French origin, the aim of which is to move from point A to point B as efficiently and quickly as possible, using principally the abilities of the human body. It is meant to help one overcome obstacles, which can be anything in the surrounding environment — from branches and rocks to rails and concrete walls.”

Hmmm...sounds like fancy talk for “walking.” I wonder if Casey was asking himself, as I was, what if *you* are the concrete wall in question?



By the way, you wouldn't have a link to your source of info would you? I had seen it in the past, and laughed at the bookmarked tie instructions, but forgot where.

Anonymous said...

IAFF down again:

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Anonymous said...

IAFF down again:

Your website has been suspended!

The web hosting account that hosts this website has been blocked due to server overload!

If you are the owner of this website, please contact the support team to resolve this issue.

If you are a visitor to this website, please access this page later.

Sprezzatura said...

I'm seeing IAFF just fine..... odd.

Held back by Marriage said...

Casey's bookmarks?

If so: holy crap. You can watch his thought process. The Save Karyn links are especially notable.

lawnmower man said...

@Legion: del.icio.us/sercasey. Old news, but Aspeth's taken a much deeper dive into its murky depths than anyone else managed before.

The overwhelming sense I'm left with from Aspeth's series is: wow, how astonishingly, unquestioningly, credulous Casey is. He's a natural mark for every guru and kook in town.

(FWIW, I see the IAFF front page OK, but get 404s on all the post pages. Just normal flakiness I think; Casey's mad IT skillz at work yet again.)

Legion said...

From his earth mission blog April 25 2006


I also talk to some different people today - friends David Ga. and Brad catching up on stuff, Sherry about land development syndication in Texas, RV sellers trying to get a descent cheap one to drive around Texas, and other investors. (Planning on driving around texas eh? Not as flashy as Crisp with his corporate jet, but I guess a winnebago to shuttle potential investors to and fro evaluating properties has some class...NOT)


One phone call in particular was not so pleasant. I talk to Tennis who is an investor/loan officer I met through Whitney courses. I call him to catchup and he complains that I don’t use him for loans. He is upset that he has been giving me free information and referrals and I’m not returning the favor. (Did you get this from the reading people for profit book?)I guess that info came with strings attached, heh? He got pretty upset and hung up on me. I couldn’t believe it. So unreasonable. Now for sure I’m not going to use him. (I'm sure Tennis is thanking his lucky stars that he managed to miss THIS bullet, being pulled into court as a co conspirator in mortgage fraud doesn't look too good in his line of work)I got kind of worked up by it at first and wanted to call him and tell him how I felt but then decided to let it slide and move on.(C'mon Casey, like everything else you do, you PLANNED on doing it but just never got around to it)

lawnmower man said...

Ah, held back beat me to it.

But anyway: who'd ever have thought that the comments at DHC would be busier and more active than those at IAFF? What kind of bizarro world is this? Cats lying down with dogs, rains of frogs: is it the end of days?

Legion said...

Thanks Lawn.

Yeah I saw it in the past but after reading Aspeth's work, I'd like to look more at the dates to try to determine a few things

1) When he went crazy
2) The timeline of his desperation
3) How much bullshit he has been spewing regarding his blog and what he is looking up at the time

Legion said...

Oh and thanks to you too Held back:-)

Legion said...

Hey

Casey moved into Yulia's house in April 21 2006? Did he move out then move back in or has he been there all this time?

Held back by Marriage said...

No problem.

1) When he went crazy

Christmas, 2005. Check his links before that time (mostly marketing get rich quick bs) and after that time.

He went absolutely bat-shit, precious-bodily-fluids crazy right around then. He was thinking about living out of an RV on December 27, 2005.

Stephanie J. said...

Legion,

Sum it up like so:

1. Went nuts as soon as the cash from his condo sale hit his clammy little hand. He's been chasing that 'win-win' ever since.

2. Blog appeared when he began to get desperate; it was a ditch effort to get someone to come in and save him or to buy his houses.

3. Casey only spews bullshit 24/7 because he's convincing himself of it as much as he is others.

Held back by Marriage said...

I spoke too soon. He was researching yeast infection treatment on December 11, and he also saved Alex Chiu's site.

W. T. F. indeed.

Legion said...

Maybe he can buy one of Chiu's wrist rings and put it around his neck.

Cluelessness said...

Stagflation, inflation, one trend should be obvious, the dollar, frn variety has lost value my entire life.

I was born in 1955, I had nothing to do with Scumbag Roosevelts social security scam or Johnsons medicare scam, grandma was sure excited about mediscam, my parents were clueless and I thought it was
bizarre. Who the hell wants to go to a doctor, let alone have the govt pay for it?

But I digress, our govt is so corrupt, that it's difficult to know what to do. I am not in the stock market save for 20k in gold stocks, I have maybe 50k in cash in various banks, the rest of my "savings" are in gold but mostly silver, thinking of trading my pound of gold for silver.

Good luck to all you astute investors

Cluelessness said...

I should add, my pi payment on my custom home is a whopping 437 a month.

Beat that niggy nigel!

My home is custom built, bought in 1986, gee no problems, then again I do not have an indoor swimming pool
my home is only 2560 sq ft, no outdoor fish pond, and no AXE spray

c said...

If any of you have the least bit of capacity for reasoning and thinking for yourself, check out silver.

Ted Butler, Jason Hommel or Edgar Steele

R-Boy said...

Im of the opinion that, our economy is going to not be going to be growing like it used to, but we should be okay if you don't overextend yourself stupidily

Aspeth said...

@Rob Dawg...Thanks a mil. Can you imagine what a total nimrod Nigel must feel like after stopping by the Twelve Years blog today? After all, what we sensed from reading between the very wide lines turned out to be correct. And yet he actually *met* with the little fuck, *dined* with him, and was ready to sign a fucking *business partnership agreement* with him. Could he be a bigger fool?

@Legion...go for a run; have a drink; you're sounding like I did while I was writing that. And even then, I only put myself through it because I knew I was skipping the country for a week of sweet diving.

I had that link in a saved file from a few months ago. When I came across it again and sat down to write it, there were just so many rabbit trails, so many clues.

I think I kept the timeframe pretty accurate, but at the end of the day, it just made more sense to group them into topics. Sorry if I've turned you into a crazy person.

Aspeth said...

Held back by Marriage and lawnmower man...thank you for posting that while I was IRL :)