Apparently 30% of existing US dollars were created in 2020...
At what point do we risk seeing hyperinflation?
Curious of everyone's point of view, but in particular @UW_Doog_Bot
Comments
-
We don't b/c the Govt will
a) take out any metric that is inflationary to show that there is none keeping the "core rate" low. They will also "encourage" the banks to keep interest rates low as well
b) At some point declare the debt null and void and the treasuries you bought (hi China) will be worthless (or you will get 5-10% on the dollar) and your just sol -
Lol this is a terrible take.godawgst said:We don't b/c the Govt will
a) take out any metric that is inflationary to show that there is none keeping the "core rate" low. They will also "encourage" the banks to keep interest rates low as well
b) At some point declare the debt null and void and the treasuries you bought (hi China) will be worthless (or you will get 5-10% on the dollar) and your just sol -
We are a long ways off from hyperinflation across a commodity basket.
You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.
Good time to own a house in a desirable area and have a 401k diversified in the market.
I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.
The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.
-
Also I like Tim on some things but he is super out of his depth when talking finance and economics.
-
Okay thank you. The only thing I feel certain about is that China is a lot weaker than people realize.UW_Doog_Bot said:We are a long ways off from hyperinflation across a commodity basket.
You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.
Good time to own a house in a desirable area and have a 401k diversified in the market.
I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.
The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos. -
Drafting off of you, of course, but that's my amateur take because it makes sense. If the US dollar fails, where you gonna go? Where's the safe haven? Shiny yellow heavy bricks? Maybe in the short term because of the psychology of history. But it goes on for any length of tim, who wants stuff that can't feed, house or protect you?UW_Doog_Bot said:We are a long ways off from hyperinflation across a commodity basket.
You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.
Good time to own a house in a desirable area and have a 401k diversified in the market.
I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.
The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos. -
So i'm curious what your background is Doog Bot... interesting comments and you sound like a knowledgeable industry professional ~ it nice to know where people are coming from a perspective standpoint so if its not too personal, do you mind me asking?
-
My take is that we are on all new ground. The market is now trading at the highest multiple of cash flow, EPS, revenue and debt in modern history ~ and its not even close.
We are also sitting on the lowest short selling position since the data has been available [2003?], interest rates are low, the Fed is aggressively buying corporate bonds [even junk bonds] to maintain the borrowing ability of corporations, business re-investment % growth rate had cratered to below 2008 levels in the second quarter and is now rising again, and the face to face service economy which represents about 30% of sales has experienced an unprecedented hit to EPS, Rev and debt such that the economics of a sustainable model now are questionable for a percentage of businesses.
In the face of that, widespread inflationary pressures would seem to be "impossible" in the fed's near term view. We have seen price spikes for commodities and products on the basis of demand vs supply given the supply disruptions but the longer view on inflationary pressures for goods and raw materials will take time to materialize. No one knows yet what the new normal will be for a sizeable portion of the previous makeup of the US economy.
What we do have at this point [and which is fortunate given the circumstances] is a whale of a bubble in financial assets [and retirement plans which form a lot of the liquidity that backstops the public's stability along with the equity in real estate] as Doog Bot has stated ~ and real estate in many markets has done well, although we are seeing a powerful migration aways from a lot of major US cities in favor or more remote smaller town locations. The unseen hand of the high rate of pending defaults which approaches the same 20% failure rate in major metropolitan areas as we experienced in 2008 has yet to play out.
In spite of the current probable over valuation, periods of over valuation can persist well past the rational explanation time-period and often do. These are clearly weird times that will require flexibility and at times decisive decision making and a willingness to increase and reduce exposure as events unfold and evaluate market rotation trends in order to keep powder dry and still have a chance to participate in what has been a sustained upward move across all categories almost without exception.
This is just my 2 cents and these are the kinds of things I'm looking at ~ my perspective is that I'm a Fintec analyst and a managed money model portfolio provider in the financial marketplace. -
Really great post. This forum has legs. I can see it really taking market share from the Tug over the next 6 mos. with Trump on the way out and football season almost over.DawgsCanDance said:My take is that we are on all new ground. The market is now trading at the highest multiple of cash flow, EPS, revenue and debt in modern history ~ and its not even close.
We are also sitting on the lowest short selling position since the data has been available [2003?], interest rates are low, the Fed is aggressively buying corporate bonds [even junk bonds] to maintain the borrowing ability of corporations, business re-investment % growth rate had cratered to below 2008 levels in the second quarter and is now rising again, and the face to face service economy which represents about 30% of sales has experienced an unprecedented hit to EPS, Rev and debt such that the economics of a sustainable model now are questionable for a percentage of businesses.
In the face of that, widespread inflationary pressures would seem to be "impossible" in the fed's near term view. We have seen price spikes for commodities and products on the basis of demand vs supply given the supply disruptions but the longer view on inflationary pressures for goods and raw materials will take time to materialize. No one knows yet what the new normal will be for a sizeable portion of the previous makeup of the US economy.
What we do have at this point [and which is fortunate given the circumstances] is a whale of a bubble in financial assets [and retirement plans which form a lot of the liquidity that backstops the public's stability along with the equity in real estate] as Doog Bot has stated ~ and real estate in many markets has done well, although we are seeing a powerful migration aways from a lot of major US cities in favor or more remote smaller town locations. The unseen hand of the high rate of pending defaults which approaches the same 20% failure rate in major metropolitan areas as we experienced in 2008 has yet to play out.
In spite of the current probable over valuation, periods of over valuation can persist well past the rational explanation time-period and often do. These are clearly weird times that will require flexibility and at times decisive decision making and a willingness to increase and reduce exposure as events unfold and evaluate market rotation trends in order to keep powder dry and still have a chance to participate in what has been a sustained upward move across all categories almost without exception.
This is just my 2 cents and these are the kinds of things I'm looking at ~ my perspective is that I'm a Fintec analyst and a managed money model portfolio provider in the financial marketplace.
I plan to spend more tim here. We? really do have some financial talent among this band of degenerates. We? also have some smart folks in the political economy and history spaces. -
What about China do you feel is weaker than people realize?DerekJohnson said:
Okay thank you. The only thing I feel certain about is that China is a lot weaker than people realize.UW_Doog_Bot said:We are a long ways off from hyperinflation across a commodity basket.
You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.
Good time to own a house in a desirable area and have a 401k diversified in the market.
I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.
The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.
