Eric Janszen’s (itulip) take down of Mish’s deflation construct…

Login or register to post comments Last Post 7597 reads   19 posts
Viewing 9 posts - 11 through 19 (of 19 total)
  • Thu, Aug 18, 2011 - 08:55pm

    #11
    Farmer Brown

    Farmer Brown

    Status Silver Member (Offline)

    Joined: Nov 23 2008

    Posts: 159

    count placeholder0

    T&T:  Great post – thanks

T&T:  Great post – thanks for taking the time to write it. 

Especially liked the very last sentence, even though this was far from the major point of discussion:

[quote=timeandtide]. The whole carbon debate should really be about the energy equation rather than this endless red herring of anthropomorphic climate change.[/quote]

  • Thu, Aug 18, 2011 - 08:58pm

    #12

    goes211

    Status Gold Member (Offline)

    Joined: Aug 18 2008

    Posts: 287

    count placeholder0

    timeandtide

Add me to your fan list…

  • Fri, Aug 19, 2011 - 08:29am

    #13

    timeandtide

    Status Bronze Member (Offline)

    Joined: Apr 03 2010

    Posts: 63

    count placeholder0

    Thank you Jeff

 Thank you for your kind encouragement.

In the last couple of days read all your posts from July on the gold discussion board (The screaming fundamentals…) and was not surprised when you pulled out. Your points were well made. Incidentally, I thought Dr M’s screaming headline is a sure sign that the gold market is getting frothy and is nearer the end of its run than most people might think.

I am a market trader and I pay a lot of attention to sentiment. When too many people are getting too sure about an index or a commodity I start to look in the opposite direction. I believe gold is getting to that stage now. It is looking like a blow off top. I am a great fan of Robert Prechter because his analysis goes way beyond technicals and fundamentals. In fact he has little time for fundamentals or news but he pays a great deal of attention to sentiment and behaviour. His view is that gold will go down with everything else – just like it did during the 30s depression. The reason being that people will be liquidating to pay off margin loans and all types of leverage so it will get swept up in the rout along with everything else. One way or another, the capital decks have to be cleared. A humoungus amount of malinvestment is sitting on the books of financial institutions and until it is cleared there can be no progress. Whether this takes place in a rolling fashion as happened in Japan or in a monster 3rd wave down as the Elliott Wavers expect, I cannot see any way out of a very destructive period of deflation. But as always, out of the ashes…

I also liked the posts of Sofistek – he is thinking about a different kind of future and I think that we should all be doing the same. I really do not know how we are all going to llive and share this planet together as we push the limits of sustainability, unless we adopt a different mindset.

Nick

  • Fri, Aug 19, 2011 - 10:35am

    #14

    timeandtide

    Status Bronze Member (Offline)

    Joined: Apr 03 2010

    Posts: 63

    count placeholder0

    Thank you Farmer Brown

 I was also brought up on a farm in England, although I live in Australia now.

By the way, I am not a climate change disbeliever – I certainly do not think we can pour CO2 into the atmosphere without  consequences. Our oceans will become more acidic at the very least – with possibly catastrophic consequences.  It is just that I think the whole climate change thing has become an industry and a lot of time and effort is being wasted ion argument when the real issue is that we are being very wasteful of energy and extraordinarily greedy. Every year we dig up coal that took about 400 years of plant growth to lay down. The way we are going there will be nothing left for future generations and we are doing nothing to find or develop substitute energy systems. Unless we go nuclear, we are utterley reliant on what past sunlight and photosynthesis stored in the earth for us and what what present and future sunlight can provide in the future. Our whole weather system is driven by the suns energy and the residual energy still trapped in planet earth since its formation.

The Dr M interview with Nate Hagens went into this way of looking at energy use really well. There is so much incredible information on this site – we really have a lot to thank Dr M for. Another thing I picked up from that interview was the difference between needs and wants.

I think farmers know the difference from their daily exsperience of working with nature. There is such an incredible amount of effort goes into growing crops and raising stock that the idea of wasting anything is just not acceptable. Especially when you think that all that effort can be lost in a bad storm. 

Nick

  • Sat, Aug 20, 2011 - 04:31am

    #15
    Calendula

    Calendula

    Status Member (Offline)

    Joined: Aug 20 2011

    Posts: 1

    count placeholder0

    Subscribing to iTulip

[quote=JAG]. . Don’t make it so hard for me to give you my money Janszen.  [/quote]

[quote=dgilmart]i’ve been also fighting hard to give him money ![/quote]

There’s a two-step process. First you register, that’s free.  Once you’re logged in, go to

http://www.itulip.com/forums/payments.php? to subscribe.

If you run into problems, any registered user can contact admin here:  

http://www.itulip.com/forums/sendmessage.php?

For more information, go here: 

http://www.itulip.com/forums/faq.php?faq=1 

By the way, iTulip plans to role out a new format (I think/hope this means a new website)  in September.  Admin and users are aware that the current site is a bit clunky.

 

  • Wed, Aug 31, 2011 - 08:59pm

    #16
    neutrino

    neutrino

    Status Member (Offline)

    Joined: May 10 2009

    Posts: 11

    count placeholder0

    Before you discredit Mish…

 What I have noticed is that from what I’ve read of Mish is that he calls for the US to go in and out of Inflation/Deflation just as in Japan.  I cannot say as to whether Mish has made calls for a prolonged deflationary spiral ala the GD prior to his current  Japan-like forecast.  I have only been reading Mish for 2 years.

One thing to keep in mind, Mish has modified his definition the the ‘flations" :

 

"Inflation is a net increase in money supply and credit, with credit marked-to-market. "



"Deflation is a net decrease in money supply and credit, with credit marked-to-market. "

 

That last little addendum is key.  Credit has not been "market to market".  The question of what willl happen to the US will largely depend on the ability and political will to keep credit from being revauled.  Before anyone is declared a winner maybe we should wait until the system is "de-rigged".

Regardless Mish’s stance that the US will go in and out of Deflation seems to be our present course.  Time will tell.

  • Wed, Aug 31, 2011 - 10:51pm

    #17
    Farmer Brown

    Farmer Brown

    Status Silver Member (Offline)

    Joined: Nov 23 2008

    Posts: 159

    count placeholder0

    On second read

After reading Janszen’s post a second time, I actually did not find it all that mind-blowing.  He does not account for or explain the Japanese experience in any way.

Also, most of his argument is about the past couple of years, which Mish was right about.  Going back to the GD doesn’t make any sense, even if we’ve hardly had any deflation since then.  That is not the time period Mish is providing a forecast for! 

I’m calling it a tie in my book, with Mish a slight lead, only because he hasn’t responded to Janszen yet.  I suspect when he does, it will clear up many areas of disagreement.

  • Wed, Aug 31, 2011 - 10:51pm

    #18
    Farmer Brown

    Farmer Brown

    Status Silver Member (Offline)

    Joined: Nov 23 2008

    Posts: 159

    count placeholder0

    On second read

After reading Janszen’s post a second time, I actually did not find it all that mind-blowing.  He does not account for or explain the Japanese experience in any way.

Also, most of his argument is about the past couple of years, which Mish was right about.  Going back to the GD doesn’t make any sense, even if we’ve hardly had any deflation since then.  That is not the time period Mish is providing a forecast for! 

I’m calling it a tie in my book, with Mish a slight lead, only because he hasn’t responded to Janszen yet.  I suspect when he does, it will clear up many areas of disagreement.

  • Wed, Aug 31, 2011 - 11:36pm

    #19
    neutrino

    neutrino

    Status Member (Offline)

    Joined: May 10 2009

    Posts: 11

    count placeholder0

    Janzens objection to “fiat”…

Janzen makes an arbitary distinction here when he allegedly "debunks" the idea we have a Fiat money system: We have a hybrid public (government) and private credit money system and have since the 1930s

I fail to see any distinction from a straight forward definition of a fiat money system.  "Credit Money" has almost always come from private sources during both fiat and non-fiat (gold standard etc) money regimes. I can’t think of a  single example of where a fiat based monetary system DID NOT have credit money available from private sources. So the distinction is invalid IMHO.

A straight forward explanation and definition of what a fiat money system is can be found on Wikipedia.

Wikipedia:  Fiat money is money that has value only because of government regulation or law. The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree. Where fiat money is used as currency, the term fiat currency is used.

Fiat money originated in 11th century China,[1] and its use became widespread during the Yuan and Ming dynasties.[2] The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then all reserve currencies have been fiat currencies, including the dollar and the euro.[3]

 

So his objection is an ill founded straw man.  

Viewing 9 posts - 11 through 19 (of 19 total)

Login or Register to post comments