Chats with LewBITW

Saturday:

I like Bill Fleckenstein, because he makes a clear distinction between what he sees as the market over valuing or undervaluing an asset and what events might prompt him to actually establish a position. He is an active trader, and runs a fund, so it’s always necessary to take account of the fact that he has a strong incentive to “talk his book” — i.e. argue the case for buying what he holds, so the price will go up.

This is more of a problem on major TV platforms He makes his “Rap” available to the public after 1 year. He’s been writing a daily market commentary for as long as you’ve been alive!

re. fiat currency, I don’t feel that it’s a problem in itself as such but I think there is a problem where governments see creating money as the answer to all problems

as it says on the masthead of Fleck’s website, ‘In a social democracy with a fiat currency, all roads lead to inflation. ‘ but actually, we’ve seen very little inflation in the developed world since the 80’s although there is a huge controversy over what the real rate of inflation actually is or even how we measure it.

In the 70’s, increases in the money supply translated into increases in the prices of consumables. in the 90s and naughties they translated into increases in the price of assets, especially tradeable securities. supposedly this is due to the Cantillion Effect: as money flows from banks, it inflates the price of the first thing that it’s spent on.

David Stockman has written about this, but he is so prolix and rambling that I can’t really recommend any of his books. Henry RichYesterday at 12:14 PM For me, it’s the biggest issue of all: why has all the money that the central banks have created resulted in more inflation? More precisely, when will the inflation (in consumer prices) start to be felt.

Once this happens, the central banks will lose control, because they will see long bond yields rising. the answer is, in a nutshell, when the output gap has closed: when the economy has no more spare capacity and when increasing demand just pushes prices higher

Various factors, especially globalization, have contributed to delaying the point when this happens. when it does, gold will take off