hmmm... exactly the southeast asian crises of 98.
Indonesian rupiah went from like 2500 -> 16800 and is still 10000 to a dollar. All because of US dollar loans gone bad and unpayable.
Nassim Taleb on Charlie Rose: "Massive Deflation Nightmare, Roubini Too Bullish"
- Thread starter Daal
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hmmm... exactly the southeast asian crises of 98.
Indonesian rupiah went from like 2500 -> 16800 and is still 10000 to a dollar. All because of US dollar loans gone bad and unpayable.
Which is exactly why gold and other commodities are such a good bet. Everyone is printing so much money, its tough to know whose will be worth the most when this story is all played out.
The markets have liked gold lately... look at it against euro/etc... Its nearly at all time highs.
Could be, but I don't expect inflation any time soon, since money velocity has gone south. We'll be lucky if we have inflation.
Printing money does not equal inflation, if there is no velocity caused by manic consumer spending. In time, it may come, but gold may underperform equities over the next couple of years. If the Feds start deleveraging, once inflation starts picking up again, it will be tough on gold. But who knows what will happen?
Taleb scenario of massive deflation is a true possibility, the sample size we have of after math of bubbles in developed economies is not big and plenty of it is bad. bernanke says inflation is always possible but hes wrong pretty often, it could take absurd fed moves to counter the credit collapse
above is incorrect. people don't live in the long run.
there are people who are on fixed incomes who will be murdered by inflation. if there is rapid inflation people don't know what prices are supposed to be.
why don't you talk to people from argentina and brazil? ask them what it is like to live under rapid inflation. do a google search and find the answer .
No one wants out of control inflation. We are arguing the reality based on the assumption the fed is always behind the curve.
But fed mandate is 2% trend inflation for a reason. It keeps everyone happy (except people who refuse to invest and who have no assets). Prices are going up slowly, investors are rewarded, tax revenues stay up, employment stays up.
If he is advocating deflation, then its not a bubble according to him.
2% money supply growth is not a fed mandate.. The central bank in the US has a duel mandate to maintain employment with
price stability.
when the two conflict and the politicians howl the mandate of price stability flies out the window. central banks who get involved with employment always end up with severe inflation in sharp downturns.. the 2 goals are incompatible.
