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Forecast 2009: Deflation, Deleveraging, and the Stimulus Effect

Discussion in 'The Economy' started by Tropo, 12th Jan, 2009.

  1. Tropo

    Tropo Well-Known Member

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    Forecast 2009: Deflation, Deleveraging, and the Stimulus Effect
     

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  2. dudek

    dudek Well-Known Member

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    Tropo,

    Thanks for doco. Can you point me to some historical data to compare how accurate was Mr. Mauldin?

    Also, if every one is printing money would this mean another tsunami, this time inflation will soon hit the world?
    This will make 2mil IP portfolio loan in 5 years time look like petty cash money.
     
  3. Chris C

    Chris C Well-Known Member

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    Great overview of the whole global situation!
     
  4. Chris C

    Chris C Well-Known Member

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    Central banks of the world are in the process of trying to inject liquidity into their economies to counteract the rampant deflation that is presently destroying wealth. Once they feel the threat of deflation has dissipated they will more than likely tighten monetary policy to prevent rampant inflation setting in.

    Basically they will only try and reflate their economies by an amount proportional to the losses cause by deflation. However the process obviously isn't an exact science and there is a lot of estimation and forecasting involved. So with the threat of deflation generally considered to pose a bigger threat than inflation you'd probably bet on central banks leaning towards over inflating their economies rather than understimulating them. I also wouldn't be surprised if a central banks are happy to accept some slightly higher levels of inflation in the years following.

    Well I think most central banks in the perfect world would rather that they only inflate their economies to the point where property prices were the same, ie if in an unmanipulated market property prices would deflate by 20% the central banks would look to inflate the economy by 20%, so prices would be the same but in real terms they would be worth 20% less.
     
  5. Tropo

    Tropo Well-Known Member

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    Dudek,

    I do not think I am able to do it but it seems that Mauldin in his article used some data not available to general public.
    Try Google. You may find some useful information.
    I would suggest that no matter what you read, always add a bit of salt, cayenne pepper and ground chilly.