tag:blogger.com,1999:blog-6616959642391988608.post8536059587652066994..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: The message of TIPS: extremely weak growth aheadScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6616959642391988608.post-57742876261200838812012-07-25T09:39:44.318-07:002012-07-25T09:39:44.318-07:00Someone asked me why I believe a US recovery is un...Someone asked me why I believe a US recovery is unlikely in the coming years -- my answer is simple -- a US economic recovery is impossible without inflation, and given that the Fed (and ECB) are committed to near zero inflation, I am betting on no recovery in the coming years -- more at:<br /><br />http://bit.ly/QEJp1w<br /><br />Betting on future stagnation and/or depression gets easier when McKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-75883606028681214852012-07-24T15:25:58.200-07:002012-07-24T15:25:58.200-07:00I agree with Scott. The Fed cannot control the bo...I agree with Scott. The Fed cannot control the bond market. It is too large. Demand for high quality bonds is great because all alternative investments are deemed excessively risky in a deflationary environment.<br /><br />The bond vigilantes are telling us we should be more concerned about deflation than inflation.djakelhttps://www.blogger.com/profile/06247798800719389756noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87549797152449244872012-07-24T10:00:20.523-07:002012-07-24T10:00:20.523-07:00To Scott Grannis:
Your analysis has already spark...To Scott Grannis:<br /><br />Your analysis has already sparked a lot of thoughts about this issue for me and this last one, "Consider my reasons...", will be deeply considered, also. Thanks for all of this.NormanBhttps://www.blogger.com/profile/05986709079442388236noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-59644208102432148742012-07-24T07:57:30.319-07:002012-07-24T07:57:30.319-07:00NormanB said "I think what is misssing is tha...NormanB said "I think what is misssing is that Scott thinks the Treasury market is a free market; its not."<br /><br />Consider my reasons for believing it is a free market: 1) the Fed is no longer buying Treasuries, except to replace those that are maturing, 2) the Fed bought only about 10% of the Treasuries held by the public, not nearly enough to significantly influence the price of Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19352348303784016392012-07-24T07:02:19.440-07:002012-07-24T07:02:19.440-07:00Benjamin –
Japan is a completely different anima...Benjamin – <br /><br />Japan is a completely different animal. Deflation there is primarily the result of lower GDP growth and productivity, which is primarily the result of demographics. Aging wealthy don't have demand for things the way young families with growing incomes do. It's that simple. There is just materially fewer consumers with rising incomes to fuel demand. Monetary randyhttps://www.blogger.com/profile/16368254229927808998noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-65141052782173295662012-07-23T20:53:11.827-07:002012-07-23T20:53:11.827-07:00Scott Grannis said...
Chris: if the high prices o...Scott Grannis said... <br />Chris: if the high prices of TIPS reflected huge demand for inflation protection, then Treasury prices would have to be much lower, and the spread between TIPS and Treasury yields would have to be much higher. In other words, we would have to see relatively high inflation expectations if the demand for inflation protection were relatively high. But that's not the NormanBhttps://www.blogger.com/profile/05986709079442388236noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-66000763757900960852012-07-23T17:23:12.099-07:002012-07-23T17:23:12.099-07:00I wonder if in Japan pundits have been worrying ab...I wonder if in Japan pundits have been worrying about inflation and slow growth for the last 20 years. <br /><br />Actually, Japan made a number of structural reforms n the last 20 years, altering the face of their retailing environment and obliterating the lifetime employment concept. They still have pathetic growth and near perma-recession. They have whipped inflation; indeed for most of theBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-4187176801611050602012-07-23T13:17:35.556-07:002012-07-23T13:17:35.556-07:00GDP growth has already been awful. Japan hasn'...GDP growth has already been awful. Japan hasn't had real GDP for the last 22 years. Using 2013 estimates Europe will have a 9 year zeron growth rate; using the same criteria, the US will have 1.3% per year. But to say that the people buying TIPs are actually reflecting future GDP growth isn't in any way their bet on GDP because TIPs aren't a bet on GDP they are a bet on inflation NormanBhttps://www.blogger.com/profile/05986709079442388236noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-79300700524573746762012-07-23T12:45:28.684-07:002012-07-23T12:45:28.684-07:00Chris: if the high prices of TIPS reflected huge d...Chris: if the high prices of TIPS reflected huge demand for inflation protection, then Treasury prices would have to be much lower, and the spread between TIPS and Treasury yields would have to be much higher. In other words, we would have to see relatively high inflation expectations if the demand for inflation protection were relatively high. But that's not the case.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-9738102944309101222012-07-23T12:24:39.226-07:002012-07-23T12:24:39.226-07:00Couldn't the rise in prices of TIPS simply be ...Couldn't the rise in prices of TIPS simply be people looking to protect against coming inflation? Not necessarily inflation caused by economic activity, but caused by the gov't printing such massive amounts of currency lately?Chrishttps://www.blogger.com/profile/08605357066384353530noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19615600750691850152012-07-23T11:25:46.322-07:002012-07-23T11:25:46.322-07:00US poverty rate is at almost 50 year high. For som...US poverty rate is at almost 50 year high. For someone as blindly optimistic as you are with a horrible economic forecast record, you really live in a different world. Back in 2010, 2011, you were laughing at Pimco's "new normal" concept. Who's been proven wrong now?<br /><br /><br />http://finance.yahoo.com/blogs/daily-ticker/u-poverty-hit-highest-level-40-years-165914572.htmlPragmatic Investorhttps://www.blogger.com/profile/08952759176339628535noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83110614973193869492012-07-23T11:06:19.955-07:002012-07-23T11:06:19.955-07:00TIPS are simply providing more evidence of economi...TIPS are simply providing more evidence of economic depression -- the other leading indicators are the long-term decline in US real working wages, the long-term decline in US home values, and the long-term decline in the US employment to population ratio -- all evidence from the bond markets is horrific -- folks, this is what depression looks like -- now would be a good time to blow up CaliforniaMcKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.com