Comments on: Interview with Mish from Global Economic Trend Analysis: Deflation, Housing, the Credit Bubble, and Bond Insurers. http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/ How I Learned to Love Southern California and Forget the Housing Bubble Fri, 08 Aug 2008 18:24:50 +0000 http://wordpress.org/?v=2.2.2 By: pappy http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8594 pappy Sat, 23 Feb 2008 15:36:29 +0000 http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8594 In the coming weeks and months the pressure building in the archane market's will cause the Howard Milstein's of the world to get louder and louder, Gov't will Quielty take on the debt of the private sector (wall street). The Real economy may crash. Creative efforts will take place to try to keep the bond market from blowing up. In the coming weeks and months the pressure building in the archane market’s will cause the Howard Milstein’s of the world to get louder and louder,

Gov’t will Quielty take on the debt of the private sector (wall street).

The Real economy may crash.

Creative efforts will take place to try to keep the bond market from blowing up.

]]> By: bubble_watcher http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8522 bubble_watcher Thu, 21 Feb 2008 16:56:35 +0000 http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8522 "The act of printing money and giving it away is by definition the very foundation of inflation." The other description for this is... "More bread and circuses!" Let me take a closer look at our SNAFU economic/geopolitical climate. 1. Fiat currencies worldwide that are backed by the full faith and credit of there underlying govts/electronic printing presses. 2. Global turmoil.. Middle East, Korea with nukes, India/Pakistan with nukes, etc. 3. Clowns running for President in the U.S. 4. Global housing bubble bust.. Now spreading to the rest of the global economy. 5. Worldwide central bank response.. Jam rates to zero and print as much as possible. Bail out the banks and 'F' everyone else. This obviously means that a global financial/economic/geopolitical crisis is not immenent, so we should all just give up on gold and instead have full faith and trust in our govt. and its wonderful fiat currency. “The act of printing money and giving it away is by definition the very foundation of inflation.”

The other description for this is…

“More bread and circuses!”

Let me take a closer look at our SNAFU economic/geopolitical climate.

1. Fiat currencies worldwide that are backed by the full faith and credit of there underlying govts/electronic printing presses.
2. Global turmoil.. Middle East, Korea with nukes, India/Pakistan with nukes, etc.
3. Clowns running for President in the U.S.
4. Global housing bubble bust.. Now spreading to the rest of the global economy.
5. Worldwide central bank response.. Jam rates to zero and print as much as possible. Bail out the banks and ‘F’ everyone else.

This obviously means that a global financial/economic/geopolitical crisis is not immenent, so we should all just give up on gold and instead have full faith and trust in our govt. and its wonderful fiat currency.

]]> By: Adan Lerma http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8485 Adan Lerma Wed, 20 Feb 2008 18:50:46 +0000 http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8485 great to see you interviewing mish; more people like yourself dr hb and mish (and elliott wave) need connecting so more people can see the growing thread (and of course there is more and other good people too :-) re interest rates, esp long term rates, i still am wondering (truly, not just pretending and thus posing a question) what the effect on long bond rates would be if every single person had access to purchasing them through their 401k plan at work; how many individuals would opt for that, short or long term, if they could in lieu of a limited choice of mutual funds? and with all the muni ins problems, how many people wish that their pension funds and city and state and county govt's would (could) get out from under crazy auction bond rate structures and other risky investments into 4 plus % long term bonds? it would be interesting, and maybe with enough of a need to revamp our retirement system options we'll get to find out (and the effect that would have on long term rates and the fear of foreign ownership) adan www.adanlerma.com ps - in re to the fed's interest in inflation, i feel their interest is more in maximization of the interests they represent within the context of a (now) global economic war i always seem to end back up with thomas jefferson's quote from over 200 years ago, "If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." it would be ironic if because of the competitive threat from other newly emerging countries, the banks and "the people" could end up on the same firing line (yea, i know, maybe 2 or 3 ps's :-) great to see you interviewing mish; more people like yourself dr hb and mish (and elliott wave) need connecting so more people can see the growing thread (and of course there is more and other good people too :-)

re interest rates, esp long term rates, i still am wondering (truly, not just pretending and thus posing a question) what the effect on long bond rates would be if every single person had access to purchasing them through their 401k plan at work; how many individuals would opt for that, short or long term, if they could in lieu of a limited choice of mutual funds?

and with all the muni ins problems, how many people wish that their pension funds and city and state and county govt’s would (could) get out from under crazy auction bond rate structures and other risky investments into 4 plus % long term bonds?

it would be interesting, and maybe with enough of a need to revamp our retirement system options we’ll get to find out (and the effect that would have on long term rates and the fear of foreign ownership)

adan
www.adanlerma.com

ps - in re to the fed’s interest in inflation, i feel their interest is more in maximization of the interests they represent within the context of a (now) global economic war

i always seem to end back up with thomas jefferson’s quote from over 200 years ago, “If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”

it would be ironic if because of the competitive threat from other newly emerging countries, the banks and “the people” could end up on the same firing line

(yea, i know, maybe 2 or 3 ps’s :-)

]]> By: Emmi http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8484 Emmi Wed, 20 Feb 2008 12:07:27 +0000 http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8484 I'm with Scott. There seem to be counter pressure here and little precedent. The Fed has an interest in inflation, to shrink the unmanageable debt they've piled up, so I don't trust them to fight it. With the recent rate cuts they certainly don't seem to be worried about it, at the very least. But after reading the very nice interview, I'm curious about something which may be a restatement of Scott's question, but I'm going to reframe it so I'm clear on it in my own head: Is inflation only ever caused by an increase in the money supply? Can it be caused any other way? The interview sorta implies that it can't, but when I look at the bad ethanol policy and what it's done to food prices, on top of what must be another imminent adjustment of the yuan and therefore our imports, on top of declining world wide oil production... it just seems like the price pressures are irresistible. Barring a worldwide recession that drops demand enough to keep oil prices stable and makes Chinese exporters cut profits... and axing of what is probably yet another unkillable government subsidy to farmers.... won't prices (in dollars at least) just go up, even if there isn't more money chasing the goods? I’m with Scott. There seem to be counter pressure here and little precedent. The Fed has an interest in inflation, to shrink the unmanageable debt they’ve piled up, so I don’t trust them to fight it. With the recent rate cuts they certainly don’t seem to be worried about it, at the very least. But after reading the very nice interview, I’m curious about something which may be a restatement of Scott’s question, but I’m going to reframe it so I’m clear on it in my own head:

Is inflation only ever caused by an increase in the money supply? Can it be caused any other way? The interview sorta implies that it can’t, but when I look at the bad ethanol policy and what it’s done to food prices, on top of what must be another imminent adjustment of the yuan and therefore our imports, on top of declining world wide oil production… it just seems like the price pressures are irresistible. Barring a worldwide recession that drops demand enough to keep oil prices stable and makes Chinese exporters cut profits… and axing of what is probably yet another unkillable government subsidy to farmers…. won’t prices (in dollars at least) just go up, even if there isn’t more money chasing the goods?

]]> By: oilwelldoctor http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8481 oilwelldoctor Wed, 20 Feb 2008 05:44:25 +0000 http://www.doctorhousingbubble.com/interview-with-mish-from-global-economic-trend-analysis-deflation-housing-the-credit-bubble-and-bond-insurers/#comment-8481 A very good interview with MISH and as always, your writing is impeccable. One thing MISH did not address directly was our national debt which optimists say is no big deal as a percent of the GDP because it was higher in previous times. Now that our GDP is shrinking, that however may no longer be the case. I know I am not the sharpest tool in the tool box, but I would like some help trying to understand how our national debt is funded? My understanding is the US Treasury issue bonds that someone has to buy. I thought the price was set by bid. That is, the interest rate was bid up until someone bought the issue. Well, seems to me that if the Federal Reserve keeps lowering short-term interest rates, at some point, the people/governments/banks/bond funds etc. buying these bonds are going to stop because they see the demise of the Fed’s fiscal discipline, and the shrinking value of the dollar. Investors simply will be able to get better security and returns elsewhere, in another currency. So… seems to me, the long term interest rates on these instruments will eventually be bid up to keep them attractive… REGARDLESS OF THE FED’S ACTIONS. Again, seems to me, at this point, the Federal Reserve will lose the ability to control interest rates. Since home loans are based on the longer term rates, they too will go up and as a direct result of the Federal Reserves dollar-weakening policies! If I may go one step further, and say that that is exactly what Paul Volker was afraid of in the early 80’s when he raised the discount rate! (I bought my first house and had a VA loan at 15 ½%). Please help me as typing this has made my head hurt but I really don’t understand where I am wrong in my assumptions. And please, keep up the good work! A very good interview with MISH and as always, your writing is impeccable. One thing MISH did not address directly was our national debt which optimists say is no big deal as a percent of the GDP because it was higher in previous times. Now that our GDP is shrinking, that however may no longer be the case. I know I am not the sharpest tool in the tool box, but I would like some help trying to understand how our national debt is funded? My understanding is the US Treasury issue bonds that someone has to buy. I thought the price was set by bid. That is, the interest rate was bid up until someone bought the issue. Well, seems to me that if the Federal Reserve keeps lowering short-term interest rates, at some point, the people/governments/banks/bond funds etc. buying these bonds are going to stop because they see the demise of the Fed’s fiscal discipline, and the shrinking value of the dollar. Investors simply will be able to get better security and returns elsewhere, in another currency. So… seems to me, the long term interest rates on these instruments will eventually be bid up to keep them attractive… REGARDLESS OF THE FED’S ACTIONS. Again, seems to me, at this point, the Federal Reserve will lose the ability to control interest rates. Since home loans are based on the longer term rates, they too will go up and as a direct result of the Federal Reserves dollar-weakening policies! If I may go one step further, and say that that is exactly what Paul Volker was afraid of in the early 80’s when he raised the discount rate! (I bought my first house and had a VA loan at 15 ½%). Please help me as typing this has made my head hurt but I really don’t understand where I am wrong in my assumptions. And please, keep up the good work!

]]>