tag:blogger.com,1999:blog-8515247115132134144.post5642541849718119708..comments2024-02-17T12:34:01.400-08:00Comments on Illusion of Prosperity: 5% Interest Rates and $500 Gold! Hahaha!Stagflationary Markhttp://www.blogger.com/profile/04568993350246477976noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8515247115132134144.post-58510955999117506642014-01-24T12:15:42.319-08:002014-01-24T12:15:42.319-08:00mab,
Hahaha!
I really thought I had you there wi...mab,<br /><br />Hahaha!<br /><br />I really thought I had you there with a "great ones" theme but you homed right in on #1! ;)Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-25859591724735996672014-01-24T10:35:42.933-08:002014-01-24T10:35:42.933-08:00Well, all I can say is that Lenny Dykstra had as m...Well, all I can say is that Lenny Dykstra had as much chance of making money on Wall St. as <a href="http://www.youtube.com/watch?v=7fho9iwLS3s" rel="nofollow">Carl THE TRUTH Williams</a> did against Mike Tyson. mabnoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-6041290239335533052014-01-24T09:28:25.105-08:002014-01-24T09:28:25.105-08:00Hey, here's one back at you.
Which of the fol...Hey, here's one back at you.<br /><br />Which of the following doesn't belong:<br /><br />1)Lenny Dykstra vs. Eddie Lampert<br />2)George Foreman vs Muhammad Ali<br />3)Kareem Abdul-Jabbar vs. Larry BirdStagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-56900781893331824102014-01-24T09:23:49.253-08:002014-01-24T09:23:49.253-08:00mab,
All the answers are false beliefs.
That'...mab,<br /><br /><i>All the answers are false beliefs.</i><br /><br />That's what I was going with so I decided that it was a trick question.<br /><br />There were actually 7 things. You only numbered 6 of them.<br /><br />The 7th one was the date and time stamp of your comment (as seen on my computer, PST).<br /><br />I also agree with your answer to the puzzle. It's subtle but important!<br /><br />I should have figured it out but I was caught up on the bond vigilantes. They are so mysterious and elusive! ;)Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-74541035872304012472014-01-24T09:03:12.080-08:002014-01-24T09:03:12.080-08:00Obviously an obtuse question. Answer 5 doesn'...Obviously an obtuse question. Answer 5 doesn't belong. <br /><br />Here's my thinking (and it could be faulty). <br /><br />All the answers are false beliefs. Answers 1,2,3,4 & 6 are <b>widely held</b> false beliefs. Answer 5 on the other hand isn't a widely held false belief. <br /><br />I think gold bugs derive a degree of comfort in not being part of the majority. <br /><br />wv = theology!!! How fitting!mabnoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-24258168938623959162014-01-23T14:29:25.220-08:002014-01-23T14:29:25.220-08:00mab,
January 23, 2014 at 2:14 PM?mab,<br /><br />January 23, 2014 at 2:14 PM?Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-76256848251729358772014-01-23T14:14:26.130-08:002014-01-23T14:14:26.130-08:00Which of the following doesn't belong:
1)unsu...Which of the following doesn't belong:<br /><br />1)unsustainable Gov't debt<br />2)Rising interest rates<br />3)QE = printing money<br />4)Bond Market Vigilantes<br />5)Gold is true money<br />6)Jim Cramer is a stock genius<br /> mabnoreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-37960066320610256012014-01-23T07:35:40.014-08:002014-01-23T07:35:40.014-08:00Nathan,
Hrm, my impression is that gold more clos...Nathan,<br /><br /><i>Hrm, my impression is that gold more closely tracks real interest rates, not nominal rates.</i><br /><br />Yeah, that's certainly my take on it too. I think it is silly to compare gold's price to nominal treasury yields.<br /><br />You might find one of the first posts on my blog interesting.<br /><br /><b>September 5, 2007</b><br /><a href="http://illusionofprosperity.blogspot.com/2007/09/fed-funds-rate-vs-commodities.html" rel="nofollow">Fed Funds Rate vs. Commodities</a><br /><br /><i>This is a chart of the annual Fed Funds Rate (adjusted by the CPI-U) vs. the return on various physical commodities (also adjusted by the CPI-U). At first glance, it just looks like a shotgun blast. However, there is clearly at least some order within the chaos when you add in linear regression trend lines.<br /><br />Even though there is a tremendous amount of noise, these five different commodities all say almost exactly the same thing. If the real Fed Funds rate is low, it is time to own hard assets. If the real Fed Funds rate is high, it is time to sell hard assets. This lends truth to the saying that you should not fight the Fed.</i><br /><br />I'm also of the belief that the inflation adjusted price of gold matters too. Put another way, there's a point at which gold could become too expensive relative to toilet paper. So when I say I'm not that excited about gold, I mean in relation to the price of toilet paper.<br /><br />I owned gold and silver from 2004 to 2006. I thought they were a bargain both in inflation adjusted terms and in real interest rate terms. Now I'm just not so sure. Gold seems expensive in inflation adjusted terms but that price could be justified if real interest rates continue to fall. They might not though (if Japan is an indicator after their housing bust).<br /><br />In any event, I bought with the intent to only sell once. I sold for a fairly hefty profit (50%). I am therefore done.<br /><br /><i>Have you ever analyzed the historical trend in household size [1]?</i><br /><br /><i>My thinking is that all the noise about "pent up demand" for housing caused by new household formation may be completely wrong.</i><br /><br />Yes. Like you, I am not encouraged.<br /><br /><b>January 14, 2010</b><br /><a href="http://illusionofprosperity.blogspot.com/2010/01/long-term-household-formation-trends.html" rel="nofollow">Long-term Household Formation Trends</a><br /><br /><i>Note that the long-term trend is no longer declining at a rapid pace. The Census Bureau's 1987 target for the year 2000 was not reached.<br /><br />There's a risk that the long-term trend is forming a bottom. There's an additional risk that it won't just bottom, but that it will actually begin to reverse. The stock market's been stagnant for a decade. Unemployment is now extremely high.<br /><br />The population will most likely continue to grow, but if more and more people live together in the same household ("for economic reasons" as seen above) then that's just one more headwind for the housing market.<br /><br />One could argue that the household size might continue to shrink if people stopped having children for economic reasons though. Of course, in that case our population wouldn't grow. That would really hurt the ponzi scheme nature of our economy. How could we continue to borrow prosperity from our children and grandchildren if we don't produce any?</i><br /><br />It would seem that we're very much on the same page here, when it comes to things to think about long-term.Stagflationary Markhttps://www.blogger.com/profile/04568993350246477976noreply@blogger.comtag:blogger.com,1999:blog-8515247115132134144.post-28271944044762142362014-01-23T07:21:35.710-08:002014-01-23T07:21:35.710-08:00Hrm, my impression is that gold more closely track...Hrm, my impression is that gold more closely tracks real interest rates, not nominal rates. As you say, some inflation context is needed.<br /><br />Off topic:<br />Have you ever analyzed the historical trend in household size [1]? The great recession seems to have arrested the multi-decade decline in people/household and even caused a small uptick lately.<br /><br />My thinking is that all the noise about "pent up demand" for housing caused by new household formation may be completely wrong. If we suppose that even a small fraction of households decide to "double up" (say 5%) that would create *millions* of excess houses. Furthermore, since newer houses are fairly large [2], doubling up doesn't necessarily mean cramped living.<br /><br />[1] http://www.census.gov/population/socdemo/hh-fam/hh6.xls<br />[2] http://mjperry.blogspot.com/2011/08/another-chart-of-day-average-home-size.htmlNathannoreply@blogger.com