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2013 - The Year of the Weasel
Topic Started: 29 Dec 2013, 09:18 AM (657 Views)
peter fraser
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The Year of the Weasel
Paul Krugman
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Just a brief thought about what didn’t happen in 2013, and what did.

What didn’t happen was the same as what didn’t happen in 2012, or 2011, or 2010. Inflation didn’t take off; bond vigilantes didn’t turn America (or any nation that borrows in its own currency) into Greece, Greece I tell you.

What did happen was a significant change in what the usual suspects — the people who have been predicting soaring inflation and interest rates, year after year — were saying.

Did they admit having been wrong? No, of course not. But their excuses shifted. Through 2011 and even through 2012, it was still mainly “just you wait!” — inflation was coming any day now, or maybe it was already here but sinister statisticians were faking the numbers. In 2013, however, it became “I never said that!” — declarations that they only said that inflation was a risk, not that it would necessarily happen, so the failure of inflation to materialize was no big deal.

This is, I’d argue, a significant development, because it gives us a new window into the nature of the disagreement. As late as last year you could view this as a legitimate contest between rival models. But we've now seen that one side of the debate not only refuses to take evidence into account, but tries to dodge personal responsibility for getting it wrong. This has gone from a test of ideas to a test of character, and a lot of people failed.
Any expressed market opinion is my own and is not to be taken as financial advice
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themoops
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Ruby Member
Bulls have character? :lol
stinkbug omosessuale


Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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Count du Monet
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Did they admit having been wrong? No, of course not. But their excuses shifted. Through 2011 and even through 2012, it was still mainly “just you wait!” — inflation was coming any day now, or maybe it was already here but sinister statisticians were faking the numbers. In 2013, however, it became “I never said that!” — declarations that they only said that inflation was a risk, not that it would necessarily happen, so the failure of inflation to materialize was no big deal.


Certainly not me, I've been in deflation camp since the beginning of 2007.

Inflation can only be created by one thing, and increase in the quantity of money in circulation. The major part of what is identified as "QE" is buying treasuries, thereby preventing the rise of interest rates or even making them fall. The new "QE" pioneered by Japan is extending the purchases to private instruments such as MBS.

Lowering interest rates doesn't great inflation, it doesn't mean a quantity of money to supply a quantity of lending. High house prices are maintained because the banks cash up fools and send them in the direction of the housing market. This falters and house prices will crash.

The battle between inflation and deflation is not smooth. One can see the Supermarkets trying to raise prices only to have them hammered down time and time again. So even while deflation prevails, a mountain of inflation is just screaming to get out. There is precious little "Goldilocks" in all this!
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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