Prices, Inflation/Deflation, Interest Rates & The Fed

I think state governments will allow the pension crisis to begin first so as put off the real-world chaos for as long as possible. The kind of people receiving or ready to receive pensions don't riot. They'll be... upset to say the least, but compared to being forced to cut off services for the underclass, its nothing. Nobody wants their cities to burn to the ground because their free food and electricity gibs fund got too lean.
 

NoMoreTO

Ostrich
Agree.

The idea that a government pension plan could default is a level I thought we'd be at in 2040. That's why I go with the everything turning fully socialist so they can keep the lights on so to speak.
 

gework

Ostrich
Gold Member
I saw a survey (UK) about how many people expect their government pension to be paid. Something like 60% of people don't expect to get it. I was surprised, because that is the sort of thing I thought normies would be in line with. I've also heard people tell me they don't expect to get it, but also want the Nordic welfare model. That's part of the reason we are here.

I don't trust any pension schemes either - public or private. The OECD, which coordinates economic policy between about 60 countries has already suggested people with private pensions have their state pension fund cut. You can see what they do in Eastern Europe, with the population decrease, every few years more people are pushed down to the minimum pension, which is about $1,500 pa in Serbia.

And increasingly I don't trust the banks. I'd like to stack more cash over the next decade, but the necessity to get (more) land and property is too high. I'd like to do what @NoMoreTO is doing, but a big issue is the growing famine of wives for farmers and rural folks in developed countries. Importing is probably the only route.

A merger of socialism, big business and SJW academia/institutions seems to be the way they are going. Those are the biggest forces in our lives and they are all combining. It's not possible to determine what is actually happening. I don't know what is more worrying - the prospect that we are being ruled by an advance, premeditated, capital hording elite; or that we are being ruled by people who are radical leftists. There are a huge number of figures who come from a revolutionary communist or radical left background:

That guy from the WHO, former communist, now threatens people from a international organisation
Keir Starmer, current leader of the UK Labour Party
Tony Blair, former UK Prime minister, now makes millions as a corporate adviser
Jose Manuel Barosso, former President of the EU Commission, now chairman of Goldman Sachs International
Bernard Sanders, former bum, now architect of Joe Biden's economic policies

None of these people have renounced their communist past.

No former fascists anywhere, other than Hillary Clinton's mentor, Robert Byrd.
 
I will say this; I trade stock. I put a small market nest egg in for the long haul, get burned pretty bad sometimes, and hold steady for the most part. But there's some people who genuinely believe you can print money all the way to Alpha Centauri because we're the USD, the world's reserve currency baby. You get official doomer status for even questioning this.

Not to drift into other thread topics, but a hollowed out, favela U.S.A will not be hosting the world's reserve currency anymore. It'll be lucky to even be regarded as a tax haven, like the Bahamas.
 

NoMoreTO

Ostrich
And increasingly I don't trust the banks. I'd like to stack more cash over the next decade, but the necessity to get (more) land and property is too high. I'd like to do what @NoMoreTO is doing, but a big issue is the growing famine of wives for farmers and rural folks in developed countries. Importing is probably the only route.

So far there is a famine for women. I've got no serious leads down in the small town I'm in. Best idea I got is to find one in the nearby city, or just hoping on a stroke of luck. Then there's always winters in Colombia, which seem to be on hold. My farmhouse is a shack, its not quite wife ready, I have to admit. Glad I bought it. It takes time to get this stuff moving, farming is a long term gig and I'm not sure starting after you have a wife and a baby in the crib is any easier.

Back to inflation, I'm struggling to not feel like I have to buy certain things now or pay double in 1-2 years.
 
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If there is a hard asset that you can buy now with fiat, buy it. Goodness knows how long the CCP virus will be with us, thus affecting supply chains and availability and prices of goods. I needed to buy some lumber recently and the price shot up (20%!!!) within a few weeks, and I live in an area with lots of logging! You should secure what you can, while you can, because savings rates are in the toilet, and the value of the underlying fiat in virtually every Western country is likely to be devalued more and more as time goes on.
 

Arado

Pelican
Gold Member
If there is a hard asset that you can buy now with fiat, buy it. Goodness knows how long the CCP virus will be with us, thus affecting supply chains and availability and prices of goods. I needed to buy some lumber recently and the price shot up (20%!!!) within a few weeks, and I live in an area with lots of logging! You should secure what you can, while you can, because savings rates are in the toilet, and the value of the underlying fiat in virtually every Western country is likely to be devalued more and more as time goes on.

That's a bit broad - are you referring to gold, silver, commodities, real estate, agricultural land, canned food, etc? Which hard assets are relatively undervalued vs. the others? I can't quite store lumber in my basement.
 

redbeard

Hummingbird
Moderator
That's a bit broad - are you referring to gold, silver, commodities, real estate, agricultural land, canned food, etc? Which hard assets are relatively undervalued vs. the others? I can't quite store lumber in my basement.
All of the above.

I believe @John Michael Kane is advising to buy hard assets because their prices reflect real supply and demand. Unlike stocks, bonds, and paper currency, which can be created out of thin air or manipulated by the government, hard assets exist in the real world. There is real supply and real demand for these real assets that can not be modified.

For many this might include real estate and commodities, but for most, the best options are gold and Bitcoin. Their portability and ease of use make them the smartest option, plus the're not as influenced by changes in supply & demand since they aren't really used as commodities.
 

NoMoreTO

Ostrich
That's a bit broad - are you referring to gold, silver, commodities, real estate, agricultural land, canned food, etc? Which hard assets are relatively undervalued vs. the others? I can't quite store lumber in my basement.

I bought a used Tractor recently and justified it with inflation.

Gold, Silver, Land are the clearcut ones. I've been mentioning that even stocking up on a large amount of meat would probably have a payback, meat is up 30% and might become expensive and scarce over the winter.
 
That's a bit broad - are you referring to gold, silver, commodities, real estate, agricultural land, canned food, etc? Which hard assets are relatively undervalued vs. the others? I can't quite store lumber in my basement.

What you should buy and store depends upon:

1. Do you forsee using the underlying asset for personal/professional reasons?
2. Do you have the space for it?
3. Is it quickly fungible in case you wish to no longer hold on it to?
4. Will said good keep pace with or outstrip inflation? (Is there a limited supply, but an always study demand?)

All of the above.

I believe @John Michael Kane is advising to buy hard assets because their prices reflect real supply and demand. Unlike stocks, bonds, and paper currency, which can be created out of thin air or manipulated by the government, hard assets exist in the real world. There is real supply and real demand for these real assets that can not be modified.

For many this might include real estate and commodities, but for most, the best options are gold and Bitcoin. Their portability and ease of use make them the smartest option, plus the're not as influenced by changes in supply & demand since they aren't really used as commodities.

Pretty much. Due to the predators that run the central banking cabal, true price discovery in stocks is impossible. We're seeing real price discovery in hard goods, because they reflect the often difficult time people have producing, sourcing and paying for the overhead to bring those goods to market.

I bought a used Tractor recently and justified it with inflation.

Gold, Silver, Land are the clearcut ones. I've been mentioning that even stocking up on a large amount of meat would probably have a payback, meat is up 30% and might become expensive and scarce over the winter.

An older tractor is a great purchase. Always in demand by farmers, or you can use it yourself. The newer John Deere ones are a nightmare, meaning the older ones will hold value.

For insight:

 

Arado

Pelican
Gold Member
What you should buy and store depends upon:

1. Do you forsee using the underlying asset for personal/professional reasons?
2. Do you have the space for it?
3. Is it quickly fungible in case you wish to no longer hold on it to?
4. Will said good keep pace with or outstrip inflation? (Is there a limited supply, but an always study demand?)

Great framework here for thinking - will definitely look to these Q's to help decide what items to store apart from the standard hard assets.

Also Fed announced today new inflation targeting policy.

The Federal Open Market Committee on Thursday announced that it has approved significant changes to its written policy strategy that are widely seen as leading to an easier monetary policy stance over time.

In a new policy framework, agreed to by all 17 top Fed officials, the central bank said it would allow inflation to run above 2% for some period of time. This is known as an “average inflation target.”

“The Committee seeks to achieve inflation that averages 2% over time and therefore judges that, following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time,” the new policy framework said.

Some commentators like the deflationists scoff at this because they claim that the Fed hasn't been able to achieve 2% inflation in the last decade even though it was their goal, and so the Fed will likely fail again as deflation is the dominant force now. Because the debt is too big, lower rates will only solve liquidity not solvency issues.

The inflationists and bitcoin/gold bugs say that there is no choice but to inflate the debt away, and MMT with Fed accommodation will easily achieve the 2% goal, and likely surpass that. The Fed is merely signaling this so they have cover not to raise rates when inflation overshoots 2%. As bond yields will remain stuck at zero nominally, that means deep negative real yields and everyone will dump treasuries and the Fed will have to monetize all Federal spending (in order to prevent yields from spiking), further blowing up the money supply. Not to mention, previous claims of low inflation are based on manipulated CPI statistics (BLS claims that having Uber and a faster computer/nicer TV makes up for more expensive housing in unstable neighborhoods, worse food, and skyrocketing education and healthcare costs).

Interesting but super challenging macroeconomic situation and mind boggling how little the media focuses on this.
 

EndlessGravity

Kingfisher
The inflationists and bitcoin/gold bugs say that there is no choice but to inflate the debt away, and MMT with Fed accommodation will easily achieve the 2% goal, and likely surpass that. The Fed is merely signaling this so they have cover not to raise rates when inflation overshoots 2%. As bond yields will remain stuck at zero nominally, that means deep negative real yields and everyone will dump treasuries and the Fed will have to monetize all Federal spending (in order to prevent yields from spiking), further blowing up the money supply. Not to mention, previous claims of low inflation are based on manipulated CPI statistics (BLS claims that having Uber and a faster computer/nicer TV makes up for more expensive housing in unstable neighborhoods, worse food, and skyrocketing education and healthcare costs).

Interesting post. Why do you believe people would sell treasuries and what do you make of the record auctions?
 

Tactician

Kingfisher
Gold Member
I'm not an expert in Bonds, just some thoughts:

Yields after inflation are negative, so large cap equities are low-key being used as pseudo-bonds. The "reasoning" is that the Fed won't let the market fall, so you get way more "yield" this way, while still staying fairly "riskless" (I realize how careless this sounds). Take a look at the top 5 SnP stocks vs the rest of the market, big chunks of which (e.g. Energy sector) have barely recovered or only recently grinded back to pre-March levels. This supports the "large caps being used as bonds" idea.

A treasury sell off wrecks all of this, but it's hard to see this happening as there's just too much money floating around (for now). Note, the reason investors are looking at all kinds of risky assets is exactly because the demand for bonds is so high in the first place.

Re: Inflation, I'd love to see fiscal spending as the source of inflation. Huge infrastructure projects so that all kinds of skilled & non-skilled workers can get a piece of the pie + the average cat still benefits from the new roads, etc. At the very least, inflation sourced from CapEx of a wide range of productive companies is also a very fair way to create new wealth for that company + everyone that interacts with that company.
 

Arado

Pelican
Gold Member
Interesting post. Why do you believe people would sell treasuries and what do you make of the record auctions?
Because if yields are capped at <1% and inflation is over 2% then you are guaranteed to lose money. Short term 3 months it may be ok if you just need to park cash somewhere but no one would want to park in the 10 year or 30 year with the Fed printing like crazy. Foreigners would then shun treasuries and the Fed would have to buy even more bonds to keep yields low, creating a never ending cycle of printing until the currency is destroyed or the Fed allows long term yields to spike, crashing (debt dependent like real estate or stocks) asset prices.

At least this is how I interpret it, but I'm not a bond expert and many of them still disagree with each other on whether we've already entered the inflation period or are still in deflation until hardcore MMT-UBI comes out. Some bond gurus like Jeff Snyder even hinted at your point that the Fed doesn't have to do anything and investors alone have bid the yields super low without Fed action. Each new policy is somewhat unprecedented and only has vague historical comparisons so its hard to predict exact consequences.
 
After watching the finance headlines for the past 10 years it seems like the best thing to do is to invert what the advice is of the day.

For example i saw a headline this week that said get out of cash, or in other words, buy stock like apple. This would indicate to me that the market has topped, better to bank the cash and wait for the big fall dip. I may lose some real value from inflation but nothing like the big whack when the market drops 30% this fall.

Just watch the headlines and do the opposite. They are lying. It is a classic pump and dump strategy.
 

STG

Robin
I don't think this experiment is going to end well.

The dollar has lost over 90% of its value since the early 1900's.

The U.S. debt has almost doubled in 4 years.

What is the breaking point? I remember when 18 trillion in debt was a big deal in the media. Now we are at about 30 trillion. At what point does the system break?

I am of the opinion that if you can't see it and touch it, you don't really own it. I don't care what your 401K balance says now as the stock market is in the biggest bubble in the history of man. Your 401K drops to nothing tomorrow and you never really had it anyway. Your savings account is digital numbers in a computer system. With fractional reserve banking if everyone went to pull their savings at once there wouldn't be enough cash to cover it.

https://finance.yahoo.com/news/money-losing-meaning-100023306.html

(Bloomberg Opinion) -- Doing “whatever it takes” to save the global economy from the coronavirus pandemic is going to cost a lot of money. The U.S. government alone is spending a few trillion dollars, and the Federal Reserve is creating another few trillion dollars to keep the financial system from collapsing. A custom Bloomberg index measuring M2 figures for 12 major economies including the U.S., China, euro zone and Japan shows their aggregate money supply had already more than doubled to $80 trillion from before the 2008-2009 financial crisis.

These numbers are so large that they no longer have any meaning; they are simply abstractions. It’s been some time since people thought about the concept of money and its purpose. The broad idea is that money has value, but that value is not arbitrary. Former Fed Chairman Paul Volcker once said in an interview that “it is a governmental responsibility to maintain the value of the currency they issue. And when they fail to do that, it is something that undermines an essential trust in government.”

The dollar has no real intrinsic value, backed only by the full faith and credit of the U.S. government. Under a fiat currency system, the government says that a dollar is a dollar. Its value relative to things such as other currencies and gold is determined on global markets. Gold is considered to be an objective store of value, and the metal’s rise in dollar terms can be expressed another way, which is that the dollar fell in gold terms. That implies the market has rendered a decision on the value, or rather, the purchasing power of the dollar.
 

EndlessGravity

Kingfisher
Because if yields are capped at <1% and inflation is over 2% then you are guaranteed to lose money. Short term 3 months it may be ok if you just need to park cash somewhere but no one would want to park in the 10 year or 30 year with the Fed printing like crazy. Foreigners would then shun treasuries and the Fed would have to buy even more bonds to keep yields low, creating a never ending cycle of printing until the currency is destroyed or the Fed allows long term yields to spike, crashing (debt dependent like real estate or stocks) asset prices.

At least this is how I interpret it, but I'm not a bond expert and many of them still disagree with each other on whether we've already entered the inflation period or are still in deflation until hardcore MMT-UBI comes out. Some bond gurus like Jeff Snyder even hinted at your point that the Fed doesn't have to do anything and investors alone have bid the yields super low without Fed action. Each new policy is somewhat unprecedented and only has vague historical comparisons so its hard to predict exact consequences.

Good perspective. However, two things swayed me from it.

The first: this isn't all willy-nilly. There's an entrenched system people must use with treasuries.

Look at how treasuries, especially "on-the-run" ones, are used throughout the market. These are the only clean, trust-worthy collateral left, and our system needs collateral for the overnight market to work, among other things. This is why 2007 wasn't really about (just) mortgage-backed securities, not at the root. That problem has returned, banks are over-leveraged and don't trust each other, and everyone along the chain is broker than broke...globally. There hasn't been any growth since 2007, just more bills to pay and bad bets to deal with.

The 10 and 30 year get "sold off" because the front end of the curve is cleanest. I put "sold off" in quotes because those yields are also historically low for the same reason. Just look at a yield curve chart from the past 2 years. There isn't a lack of demand for treasuries, despite the yields, just the opposite: the demand is like nothing we've ever seen. The system needs treasuries to function.

Second, the Fed issues reserves.

Most of what they do doesn't even end up in assets. (You can see this in junk soaring before they even bought a thing). This isn't money printing, although they like to say it (which should clue you in to the scam). You can also actually ignore everything the Fed says based on their track-record and lies alone. That's not to say we aren't doing a smidgen of helicopter money. However, that's just a slight of hand, primarily left-overs for the poor and giving broke people money to buy food.

That's extreme deflation, all of this is.

What happens when the entire yield curve flips negative? I've been thinking a lot about that (and the times when we see yields spike like in Sept 2019). Maybe nothing happens. Maybe the end of our reserve status. However, I don't plan to be anywhere near major population centers when it goes down and I don't give us a much time left. Line that up with what we're seeing socially, politically, militarily, etc. and you see where I'm going with this.

---------------------------------------

I can't take credit for what I wrote here. It's been pieced together from people smarter and more experienced than I. Their books and articles can be found easily.
 

Arado

Pelican
Gold Member
Good perspective. However, two things swayed me from it.

The first: this isn't all willy-nilly. There's an entrenched system people must use with treasuries.

Look at how treasuries, especially "on-the-run" ones, are used throughout the market. These are the only clean, trust-worthy collateral left, and our system needs collateral for the overnight market to work, among other things. This is why 2007 wasn't really about (just) mortgage-backed securities, not at the root. That problem has returned, banks are over-leveraged and don't trust each other, and everyone along the chain is broker than broke...globally. There hasn't been any growth since 2007, just more bills to pay and bad bets to deal with.

The 10 and 30 year get "sold off" because the front end of the curve is cleanest. I put "sold off" in quotes because those yields are also historically low for the same reason. Just look at a yield curve chart from the past 2 years. There isn't a lack of demand for treasuries, despite the yields, just the opposite: the demand is like nothing we've ever seen. The system needs treasuries to function.

Second, the Fed issues reserves.

Most of what they do doesn't even end up in assets. (You can see this in junk soaring before they even bought a thing). This isn't money printing, although they like to say it (which should clue you in to the scam). You can also actually ignore everything the Fed says based on their track-record and lies alone. That's not to say we aren't doing a smidgen of helicopter money. However, that's just a slight of hand, primarily left-overs for the poor and giving broke people money to buy food.

That's extreme deflation, all of this is.

What happens when the entire yield curve flips negative? I've been thinking a lot about that (and the times when we see yields spike like in Sept 2019). Maybe nothing happens. Maybe the end of our reserve status.

Solid post. I agree with you that for now, there is still high demand for treasuries and the short term treasuries are pristine assets that are ideal for use in the repo market, and so demand will remain robust.

However, I'm not as sure about the long dated treasuries. In a previous post I linked to this 30Y auction that had mediocre results. Also in this article it shows that foreign demand for the most recently issued treasuries is somewhat flatlining and the Fed has to take up much of the slack.

US-Treasury-holdings-TIC-foreign-v-US-2020-08-17-june-.png

So the system needs these assets to function, but what happens IF the BLS finally admits that inflation is well above 2%, then it will be undeniable that these treasuries are negative yielding assets. Remember, everyone is screaming deflation everywhere and no one in mainstream media is talking about cost of living increases, so most institutions are yet to internalize that treasuries are negative yielding already.

Totally agree with your point that for now, treasury purchases only go onto bank balance sheets at the Fed and don't get released into the real economy. But how long will this last? There is major supply destruction coming from COVID and minus the most recent congressional deadlock I see no major cuts in government spending long term, so it's still more dollars (albeit velocity is the key Q) chasing fewer goods.

However, I don't plan to be anywhere near major population centers when it goes down and I don't give us a much time left. Line that up with what we're seeing socially, politically, militarily, etc. and you see where I'm going with this.

This part of your post I found interesting - outside of investment timing, is there any specific aspect of prepping that you would change based on whether we are in inflation or deflation? Both would be dangerous to be in urban cores, but if there is still deflation then you don't have to be as urgently stocking up on hard assets, no, and can wait for deals, perhaps to buy dips in the precious metals market, solid farmland, and other assets mentioned in this thread.

I think we're both largely on the same page, but it's this subtle shift from secular deflation to inflation that I'm still struggling with, and it's nuanced because it's not always clear what Fed actions are just printing money into reserves and the financial economy (base money) vs. the real economy (broad money), the latter of which will really cause inflation to hit the average Joe. This is probably THE core macroeconomic debate right now, and fundamentally important in terms of knowing when to start taking on debt/leverage to buy assets or even panic buy all in to precious metals and stock food, vs holding cash to wait for the "crash".

On the same note, interesting post on reddit here on inflation in the used car market.

GeneralCheese
We could sell the used car we bought last October, with double the miles now, for 20% more than we paid.

startup-nill
I have an old truck I bought in 2017 for $4,200 and have beat on it hard as a work truck for 3 years. The market in my area shows it's worth about $5,500 now. Ridiculous.

Simple question to folks here - in terms of the goods that you need to function every day, have you seen any major price decreases out there? I haven't. Sure, maybe SF condos and cruise ship tickets are discounted but who wants that? Eating out has become super expensive and nothing is getting cheaper in the grocery store, transportation costs haven't dropped. Housing market outside of urban cores are in bidding wars.
 
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EndlessGravity

Kingfisher
@Arado, I should have known based on your posting that you're very knowledgeable regarding these topics.

Also in this article it shows that foreign demand for the most recently issued treasuries is somewhat flatlining and the Fed has to take up much of the slack.

It did and they did sell treasuries in March. However, that's the issue. The Fed is doing a balancing act it cannot control and which it has very little power to affect. LIBOR spikes show much is going wrong. The major banks gobbling up treasuries AND the dollar shortage are the concerns. Synder, who you mentioned earlier, does a solid job showing this to be the case.

IF the BLS finally admits that inflation is well above 2%
Remember, everyone is screaming deflation everywhere

Have we though and are they? The Fed and financial media can't shut up about inflation. I'm no inflation expert but watching businesses of all sizes experience zero real growth for a decade yet continue to try to raise prices to solve this problem...has left me wondering if what most people point at as inflation, isn't.

However, you're correct that we're probably on the same page. I see brutal stag-flation coming. Friends of mine couldn't believe when I predicted home prices would go up after the lock-downs...but I was happily correct.

This part of your post I found interesting - outside of investment timing, is there any specific aspect of prepping that you would change based on whether we are in inflation or deflation?

I liquidated almost everything into cash in January-ish. I retained gold, silver, and entered a healthy market short position. I started to unwind our real estate investments (and am in the process of doing so). I then closed my shorts at the bottom. We also increased our food preps before prices went up on meat.

Now we're trying to find a new property in a small community. The properties that meet our criteria don't stay on the market more than 24 hours. Ones that don't are sitting.

Feel free to criticize this strategy: We're extreme savers. We take on debt, including business debt, very carefully and pay it back in full very quickly. With this much instability and bullshit, I feel holding cash, a semi-rural property, and either an essential or very lean business is best. If deflation, obviously good. If inflation...at least I have a boatload of cash and I never stop saving anyway.

Edit: I shouldn't forget to add, we were going to dump all real estate by January of 2021. I thought we had more time and was hoping to squeeze more juice given some major developments going on. That was a mistake, although I won't lose money.
 
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Arado

Pelican
Gold Member
@Arado

The Fed and financial media can't shut up about inflation. I'm no inflation expert but watching businesses of all sizes experience zero real growth for a decade yet continue to try to raise prices to solve this problem...has left me wondering if what most people point at as inflation, isn't.

However, you're correct that we're probably on the same page. I see brutal stag-flation coming. Friends of mine couldn't believe when I predicted home prices would go up after the lock-downs...but I was happily correct.

I liquidated almost everything into cash in January-ish. I retained gold, silver, and entered a healthy market short position. I started to unwind our real estate investments (and am in the process of doing so). I then closed my shorts at the bottom. We also increased our food preps before prices went up on meat.

Now we're trying to find a new property in a small community. The properties that meet our criteria don't stay on the market more than 24 hours. Ones that don't are sitting.

Feel free to criticize this strategy: We're extreme savers. We take on debt, including business debt, very carefully and pay it back in full very quickly. With this much instability and bullshit, I feel holding cash, a semi-rural property, and either an essential or very lean business is best. If deflation, obviously good. If inflation...at least I have a boatload of cash and I never stop saving anyway.

Edit: I shouldn't forget to add, we were going to dump all real estate by January of 2021. I thought we had more time and was hoping to squeeze more juice given some major developments going on. That was a mistake, although I won't lose money.

I think the financial media parrots Fed talking points about trying to get to 2% CPI, but I see little discussion in the financial media about how the Fed wants to generate inflation to get rid of the debt because the government is insolvent, or about how seniors on fixed income are completely screwed and forced to speculate in the equity markets or high risk bonds, or how gold and bitcoin should replace negative (real) yielding bonds. There's some discussion of this, but far from enough to actually make the normies sit up and question why zombie companies and hedge funds should be able to borrow at negative rates while the savings of the middle class are stolen.

I wrote in a previous post that there are multiple economies out there, so as you wrote it's not black and white. We can have inflation in rural housing and organic meat but deflation in condos and TVs.

I like your positioning in metals and a rural community, which should serve well in both deflation and stagflation. Are you planning to parlay your real estate sales into metals and commodities or sit in cash while the debt bubble bursts?

Also what will make you change your view from deflationary to inflationary?
 
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