tag:blogger.com,1999:blog-8515247115132134144.post4193516725929969572..comments2024-02-17T12:34:01.400-08:00Comments on Illusion of Prosperity: The Long-Term Death of Real YieldsStagflationary Markhttp://www.blogger.com/profile/04568993350246477976noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-8515247115132134144.post-11790800042284210092014-02-18T17:01:37.080-08:002014-02-18T17:01:37.080-08:00Jazzbumpa,
Basically, we're screwed.
Perhaps...Jazzbumpa,<br /><br /><i>Basically, we're screwed.</i><br /><br />Perhaps we're not screwing (keeping our birth rate high) because we know we're screwed. Oh, the irony.<br /><br />That's pretty much what the Japanese did once they fell into ZIRP after their housing bubble popped in the early 1990s. Few seem to think it can happen here though. (I think it can and will. Sigh.)Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-28031603180087222802014-02-18T13:43:58.472-08:002014-02-18T13:43:58.472-08:001) The economy is not physics.
2) There was birth...1) The economy is not physics.<br /><br />2) There was birth rate bump around 1970-72 as the baby boom echo [that's when my kids arrived] and again around 1990, but not much of one in the early 80's.<br /><br />See <a href="http://angrybearblog.com/2014/02/six-decades-of-u-s-population-growth.html" rel="nofollow">graph 2 here</a>.<br /><br />3) High inflation would wreak economic havoc. Not a good plan, and turning it off would also be its own version of hell.<br /><br />Basically, we're screwed.<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-87735543086318541642013-08-16T10:35:53.550-07:002013-08-16T10:35:53.550-07:00Mr Slippery,
I'm clearly not in that camp, at...Mr Slippery,<br /><br />I'm clearly not in that camp, at least not within my lifetime (or I would not have bought TIPS and I-Bonds).Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-55268605628908428432013-08-16T06:51:58.146-07:002013-08-16T06:51:58.146-07:00How would you propose that we purge the debt with ...<i>How would you propose that we purge the debt with 20% inflation if ZIRP can't seem to generate 20% inflation?</i><br /><br />I propose a currency and bond crisis in which interest rates and inflation spike to 20%. In that scenario, some jobs would get pay increases, say people working in the energy sector, but most would not.<br /><br />Debts would be purged through inflation for those with rising wages, default, and bankruptcy (including government debt).Mr Slipperynoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-16133821097851774512013-08-16T06:49:14.873-07:002013-08-16T06:49:14.873-07:00dearieme,
Your scenario certainly appeals to my p...dearieme,<br /><br />Your scenario certainly appeals to my physics nature. I would not rule it out.<br /><br />My name is Stagflationary but there's a deflationary part as well.<br /><br />There are demons wrestling for control within my head. They are both bearish. The angels left the building a long time ago (presumably after seeing the first exponential trend failure chart).Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-67231058176083144892013-08-16T04:46:36.183-07:002013-08-16T04:46:36.183-07:00It's the old analogy of pulling on an elastic ...It's the old analogy of pulling on an elastic band attached to a brick that sits on a table. You pull, and pull, and nothing happens. Then suddenly the brick budges, zooms across the table and smashes into you. That's how high inflation will arrive; rather unexpectedly, and because all attempts to generate mild inflation didn't work until suddenly they worked all too well.<br /><br />I wish our equivalent of TIPS yielded 0.57% real: I'd be buying if they did.deariemenoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-49703215144331810222013-08-15T22:23:19.078-07:002013-08-15T22:23:19.078-07:00Troy,
Demographically we've got the baby boom...Troy,<br /><br /><i>Demographically we've got the baby boom echo turning 30 now, and <b>they're going to want to be buying houses</b>, and until the bbers die off there will be housing supply-side weakness.</i><br /><br />And people in hell want ice water, or so they say. Just sayin'.<br /><br />In any event, my 89 year old mother will be freeing a house up for them shortly. She's downsizing to assisted living.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-14314333504234869172013-08-15T22:21:40.947-07:002013-08-15T22:21:40.947-07:00Troy,
Helicopter money, e.g. Fed printing the $2....Troy,<br /><br /><i>Helicopter money, e.g. Fed printing the $2.7T SSTF redemption instead of higher income taxes.</i><br /><br />$2.7 trillion? Is that all? Supposed net worth went up <a href="http://research.stlouisfed.org/fred2/graph/?g=lvz" rel="nofollow">$3 trillion</a> in just the last quarter alone. You're going to have to throw some bigger numbers at me than that! ;)Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-36277722845164771582013-08-15T21:29:21.952-07:002013-08-15T21:29:21.952-07:00if 4+ years of ZIRP can't generate much inflat...<i> if 4+ years of ZIRP can't generate much inflation then what can</i><br /><br />Helicopter money, e.g. Fed printing the $2.7T SSTF redemption instead of higher income taxes.<br /><br />Japanese borrowers completely fried the domestic credit system through their excesses of the 1980s.<br /><br />Bad debt in Japan is a lot more "stickier" than bad debt here.<br /><br />Demographically we've got the baby boom echo turning 30 now, and they're going to want to be buying houses, and until the bbers die off there will be housing supply-side weakness.<br /><br />Jaoan's currency doubled between 1990 and 2012, which I think was also deflationary via out pricing Japanese labor rates vis-a-vis E Asian and also putting downward price pressure on imported goods (literally deflationary).<br /><br /><br /><br />Troynoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-45171336558430719982013-08-15T20:40:51.681-07:002013-08-15T20:40:51.681-07:00Mr Slippery,
How would you propose that we purge ...Mr Slippery,<br /><br />How would you propose that we purge the debt with 20% inflation if ZIRP can't seem to generate 20% inflation?<br /><br />Serious question.<br /><br />Let's assume we could though. Would wages go up 20% per year too? Or would they continue to stagnate?<br /><br />Because if wages don't go up, we've got way too many cars on our highways. Sigh.<br />Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-80941009530830665612013-08-15T19:44:36.648-07:002013-08-15T19:44:36.648-07:00Japan has not found a way out, and while we have b...Japan has not found a way out, and while we have better demographics, we haven't found a way out either.<br /><br />Thought experiment: if we purged all debt with a good dose of 20% inflation for a couple of years, would that clear the decks for future growth, or are there bigger problems than the debt overhang?<br />Mr Slipperynoreply@blogger.com