Tobin’s Q ratio: S&P may plunge another 55 percent to 400; Massive Deflation To Come

[gnome]

Quote from jsv416:

With Billions of $ going into gov. bonds for a guaranteed LOSS over the next 3 months the BIG money must not see value in stocks right now. Why the hell would they lock into bonds with a negative yield if they werent scared shitless about something coming down the pipe!! If you are long stay hedged.....

2 reasons T-bonds have skied and possible reason to own them now...

1. Treasuries are the "last bastion against wide-area defaults".

2. Capital gain potential if due to deflation/depression T-Bond yields drop to <2%.

 

[TGregg]

Quote from gnome:

Printing too much money is WORSE in the long run than suffering deflation..

Just because I say what I think will happen doesn't mean I like it. If they put me in charge of the government, we'd have deflation alright. But I'd piss off most everybody by slashing government something silly and I'd be out of power before tea time.

The feds with their massive debt habit cannot possibly afford deflation. And they can stop it if they wish.

 

[blackjack007]

Quote from TGregg:

No way deflation, not unless the fed wants it. Wanna pull out the stops and put an end to deflation? Send a 100 grand "rebate" check to everybody. Hello inflation.

if you're talking about asset price deflation then it's already happening: commodities, cars, boats, houses, stocks, and cash (in the form of interest rates). the fed hasn't stopped deflation yet.