Fwiw you were right about TLT gains. I think the dollar continues to absorb liquidity until the music stops thus perhaps a helpful mediating position to hedge by reducing beta. Seems like commodities are doing a worse job at this now which speaks to the free floating nature of fiat. Don't get caught without a chair when the music stops
The problem with commodity rallies is that commodities really can't grow. At the end of the day they're really just a currency. This means the second derivative is
always negative
“The first panacea of a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Depressions are deflationary events. They purposely create high inflation because they know high deflation is worse.
Inflation - Prices increase and regular people can't afford as much as they used to, but commercial demand for everything stays high and most people still have their jobs, keeping the cogs of the economy turning until things return to a normal equilibrium. High prices also make sure resources go to the most productive/necessary things based on supply/demand economics.
Deflation - Prices of everything come down rapidly, flooding the market with cheap goods, resulting in manufacturing not being profitable and manufacturers shutting down. People lose their jobs and the commercial demand for things plummets.
There very well could be deflation coming, but I think they do what they do to avoid it.
Eh... idk. Kinda hard to print money loaned at interest and not have inflation, especially since there isn't enough money in the world to pay back what's owed+interest.
The ones who went along with this system knew they wouldn't be alive when the train wreck occurred.
Fwiw you were right about TLT gains. I think the dollar continues to absorb liquidity until the music stops thus perhaps a helpful mediating position to hedge by reducing beta. Seems like commodities are doing a worse job at this now which speaks to the free floating nature of fiat. Don't get caught without a chair when the music stops
The problem with commodity rallies is that commodities really can't grow. At the end of the day they're really just a currency. This means the second derivative is always negative
“The first panacea of a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Ernest Hemingway
Depressions are deflationary events. They purposely create high inflation because they know high deflation is worse.
Inflation - Prices increase and regular people can't afford as much as they used to, but commercial demand for everything stays high and most people still have their jobs, keeping the cogs of the economy turning until things return to a normal equilibrium. High prices also make sure resources go to the most productive/necessary things based on supply/demand economics.
Deflation - Prices of everything come down rapidly, flooding the market with cheap goods, resulting in manufacturing not being profitable and manufacturers shutting down. People lose their jobs and the commercial demand for things plummets.
There very well could be deflation coming, but I think they do what they do to avoid it.
Eh... idk. Kinda hard to print money loaned at interest and not have inflation, especially since there isn't enough money in the world to pay back what's owed+interest.
The ones who went along with this system knew they wouldn't be alive when the train wreck occurred.
The original "not my problem" boomers.