Comments on: Chart of the day: U.S. Consumer Price Index http://www.creditwritedowns.com/2008/12/chart-of-the-day-us-consumer-price-index.html Sun, 08 Nov 2009 04:13:13 -0700 http://wordpress.org/?v=2.8.5 hourly 1 By: Edward Harrison http://www.creditwritedowns.com/2008/12/chart-of-the-day-us-consumer-price-index.html/comment-page-1#comment-1379 Edward Harrison Thu, 18 Dec 2008 13:15:04 +0000 http://www.creditwritedowns.com/?p=2628#comment-1379 @Stevie b., sounds like it leaves us with a repeat of the 1930s, doesn't it? I mean we are potentially going to see competitive currency devaluations. The Chinese have tried weakening their currency. The Swiss are near ZIRP. The BoE may be next. It makes gold look attractive irrespective of deflation. Watch <a href="http://www.creditwritedowns.com/2008/12/inflation-explained.html" rel="nofollow">the propaganda video on inflation explained</a>. It tells a picture where gold should be higher in a few years (not necessarily now). But it does seem that the ECB will be dragged kicking and screaming to the party. @Stevie b., sounds like it leaves us with a repeat of the 1930s, doesn’t it? I mean we are potentially going to see competitive currency devaluations. The Chinese have tried weakening their currency. The Swiss are near ZIRP. The BoE may be next.

It makes gold look attractive irrespective of deflation. Watch the propaganda video on inflation explained. It tells a picture where gold should be higher in a few years (not necessarily now).

But it does seem that the ECB will be dragged kicking and screaming to the party.

]]> By: Stevie b. http://www.creditwritedowns.com/2008/12/chart-of-the-day-us-consumer-price-index.html/comment-page-1#comment-1377 Stevie b. Thu, 18 Dec 2008 06:35:13 +0000 http://www.creditwritedowns.com/?p=2628#comment-1377 Ed - of course the problem is that all the other major economies are going to go down the same route sooner or later, so theoretically all currencies will be "weak", so what does that leave us with - gold? The problem is that the Central Banks can manipulate that too, so where does that leave us...? Ed – of course the problem is that all the other major economies are going to go down the same route sooner or later, so theoretically all currencies will be “weak”, so what does that leave us with – gold? The problem is that the Central Banks can manipulate that too, so where does that leave us…?

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/chart-of-the-day-us-consumer-price-index.html/comment-page-1#comment-1370 Edward Harrison Wed, 17 Dec 2008 17:45:26 +0000 http://www.creditwritedowns.com/?p=2628#comment-1370 @Stevie b., your point is very well taken. Manipulating interest rates will distort the feedback we get from the markets. They will cease to act as an effective signalling mechanism. And, as for the dollar, I'd have to agree that the Fed is much more limited in its influence over currency markets. This is why I expect the dollar t be a weak currency. The Fed can try to reflate all it wants, ultimately that is going to be bearish for the dollar. Very good points, Steve @Stevie b., your point is very well taken. Manipulating interest rates will distort the feedback we get from the markets. They will cease to act as an effective signalling mechanism.

And, as for the dollar, I’d have to agree that the Fed is much more limited in its influence over currency markets. This is why I expect the dollar t be a weak currency. The Fed can try to reflate all it wants, ultimately that is going to be bearish for the dollar.

Very good points, Steve

]]> By: Stevie b. http://www.creditwritedowns.com/2008/12/chart-of-the-day-us-consumer-price-index.html/comment-page-1#comment-1360 Stevie b. Wed, 17 Dec 2008 06:12:31 +0000 http://www.creditwritedowns.com/?p=2628#comment-1360 Ed - If the bond market is a bubble - and I agree with you that it is - then we don't really know how big it can get, especially if the Fed blows into it by manipulating longer-term rates. The tradition of markets - in this case the bond market - reflecting the future is of course destroyed by this manoeuvre. If we look at the prospects for inflation, the bond market is therefore no longer the bellweather for the future if it is being manipulated. The dollar however cannot be so easily manipulated. Do you think this may be where the inflation/deflation tussle will be played out? Ed – If the bond market is a bubble – and I agree with you that it is – then we don’t really know how big it can get, especially if the Fed blows into it by manipulating longer-term rates. The tradition of markets – in this case the bond market – reflecting the future is of course destroyed by this manoeuvre. If we look at the prospects for inflation, the bond market is therefore no longer the bellweather for the future if it is being manipulated. The dollar however cannot be so easily manipulated. Do you think this may be where the inflation/deflation tussle will be played out?

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