Inflation not Deflation?

Quote from TraderD:

Well, I was not trying to guess the bottom. I wondered how RE would do relative to commodities in the next 10 years.
If scenario develops according to Jim Rogers - we will see inflation and commodities boom in next 10 years. Say we use current time as departing point (US RE has corrected a bit, depending on location). Would RE rise as much as a basket of commodities? Or it is tapped out and is not a real inflationary hedge anymore? Not clear to me. Trying to put picture together.
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thats a tough tough question. imo gold is the commodity of choice. silver should do well at such low levels. alternative energy like nuclear/coal related investments (along the lines of bucy for example) might shine over the next 3 years.

i expect another round of deleveraging in 2009 that could give a bottom in real estate and many other hard asset classes as well. stay liquid, stay nimble...
 
Quote from ShoeshineBoy:

I kind of agree with you. Nowadays, it appears that much of the extra "printed money" ends up in assets and not necessarily in commodities or wages, a la the Greenspan Housing Bubble. If interest rates stay low, which is very likely, where do you think the money will go? In Japan it went into the market and real estate. Where will it go the next time? That's the question.

But what I was getting at is that Greenspan Housing Bubble was an inflation even though it was sector specific and not the typical wage-price spectacle that we're used to.

I would arge that the bottom line is that all that extra money has to go somewhere and whereever it goes will create some kind of inflation...
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hmm asset hyperinflation? sounds like an extra chapter for economics textbooks...
 
Quote from flyingiguana:

hmm asset hyperinflation? sounds like an extra chapter for economics textbooks...
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The (funny) money has to go somewhere. With low interest rates, it's going to have a tendency to go into real estate...
 
Quote from ShoeshineBoy:

The (funny) money has to go somewhere. With low interest rates, it's going to have a tendency to go into real estate...
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yes but at what point? there's still a glut of unsold homes and housing prices are still out of whack compared to rents and incomes.

lower interest rates haven't lowered mortgage rates...
 
Dumb people are dime-a-dozen...The treasury is/has been issuing bonds for every dollar they hand over to the FRB. Why do you think the markets aren't rebounding? The common equity is the lowest tier of the capital structure and is feeding the tiers above it. Anyone talking about inflation today should be promptly slapped.

The inflation thesis is and has always been INCORRECT!

PS - The Fed Funds rate is at 1% because there is no demand for debt... Apply that argument to the treasury market as well, why are yields so low compared to corporates? What is that screaming?

:D
 
Quote from ShoeshineBoy:

I would argue that that is becomingly increasingly difficult to predict. Think about this: they pumped so much into the system that we had an almost unbroken bull market throughout the 90's. Of course, there was hell to pay later first in 2000 and now with the Subprime Crisis. But the bottom line is that noone believed in a ten year bull before the 90's. (Somebody can correct me if I'm wrong, but I don't think we had anything like that before...)

In other words, business cycles ain't what they used to be...

And think of Japan: ten years in the toilet.
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All the interventions accomplish is to accentuate the volatility... and I'm for more intervention because for me volatiltiy =income :)
 
Quote from Enfinity:

Dumb people are dime-a-dozen...The treasury is/has been issuing bonds for every dollar they hand over to the FRB. Why do you think the markets aren't rebounding? The common equity is the lowest tier of the capital structure and is feeding the tiers above it. Anyone talking about inflation today should be promptly slapped.

The inflation thesis is and has always been INCORRECT!

PS - The Fed Funds rate is at 1% because there is no demand for debt... Apply that argument to the treasury market as well, why are yields so low compared to corporates? What is that screaming?

:D
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"The treasury is/has been issuing bonds for every dollar they hand over to the FRB. "
But by issuing new debit obligations are not they diluting existing money pool? For new bonds issued, how much real tangible wealth is expected to be created in US?

Can you elaborate on the above as well as answer your own questions? Thanks!

Also, what time horizons do you (and all) are referring to? 1, 2, 10 years?
 
Quote from flyingiguana:

i expect another round of deleveraging in 2009 that could give a bottom in real estate and many other hard asset classes as well. stay liquid, stay nimble...
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Agreed.

It gives the cash crowd a head start at say 50% devaluation of hard assets before inflation sets in.

All the cash crowd ever ask for is an uneven edge in life.
 
Quote from jjf:

Agreed.

It gives the cash crowd a head start at say 50% devaluation of hard assets before inflation sets in.

All the cash crowd ever ask for is an uneven edge in life.
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Suspect this is now becoming the most likely scenario as well. With President elect Obama's victory, oil as an asset class is the most perplexing area.

Bad for oil: Alt energy, conservation, mandated efficiency standards for cars, hybrid vehicles, gas guzzler taxes,

Good for oil: Currency devaluation, geopolitical risk (oil states relationship to dems?), "rise of the rest", willingness of OPEC to cut production, rumors of b.o.'s hostility towards coal technology.

Path for other hard assets is more clear. Farmland still looks good!
 
Quote from drsteph:

Suspect this is now becoming the most likely scenario as well. With President elect Obama's victory, oil as an asset class is the most perplexing area.
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Path for other hard assets is more clear. Farmland still looks good!
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You need to buy productive farmland at the bottom of it's production cycle.
 
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