Whether it meets the narrow definition of ‘hyperinflation’ or not, 10-20% annual inflation sounds pretty rotten to me.
The fact is, we have been expecting this for many years now. The fact that it has not occurred is, ironically, troubling, because it means politicians are becoming accustomed to a trillion here and a trillion there without any consequences.
Once the Saudis stop trading their cartel oil in US dollars and/or China gains enough leverage over the world economy, the party is going to come to a crashing halt.
The problem with economics is always the time lag between cause and effect.
If a person jumps off a tall building, he will always die immediately, and everyone will see it. The death cannot be blamed on anything else.
When you monetize debt and increase the money supply, nothing happens immediately. It is a bonanza for those who receive the money first. As new currency percolates, it raise prices- first in financial assets, then at the wholesale level, then at the retail level. When people finally see it after 2 or 3 years, they might attribute it to something else- China increasing grain purchases, for example.
When they realize the inflation is here, people increase monetary turnover rate (monetary velocity) hoping to buy before prices increase further. Thus begins the vicious cycle of inflation. It is much easier to start than it is to stop, as Paul Volker illustrated.
I dont think I know everything and I’m aware of the risks. If att can unload directv for anything close to a good price that will take a load off the stock.
I didn’t say ATT will make a profit off directv, its a question of how much will they lose. But some kind of loss is baked into the stock price, directv is worth something and that’s what they’ll get for it. Something.
You have to wonder why knuckleheads with a land line and cell phone business wanted to buy a satellite company in the first place. That is why Wintermute says that AT&T makes stupid acquisitions and does not manage them well. They are losing highly-trained Turner Broadcasting employees out of disgust for benefit cuts.
Most business owners I know have switched from AT&T out of utter disgust for their customer service. Nearly impossible to talk to a live person about your bill, and when you do, it is a person in India that is hard to understand.
I may have to get ready to eat crow on this topic as well.
Seeing a LOT of financial personalities becoming much more vocal & cynical about the market’s excessive valuations. Peter Schiff, Jim Cramer, etc. Warren Buffet has made massive moves, including selling bank shares semi recently.
Seems like a near universal consensus that taking profits is a wise move at the moment.
I almost wonder if the groupthink effect of these influencers will cause a market decline to occur that might not otherwise have done so.
We’ve been methodically moving into asset preservation mode and out of asset accumulation mode. With no RMDs last year, we took the opportunity to cash out some gainers and build our bond and preferred investments and cut back on our stock investments. We still hold s&p index ETFs and a couple of dividend ETFs, but I’d guess we’re 35-40% stock and 60-65% cash, bonds and preferreds.
As I mentioned, we are moving out of the accumulation phase into the preservation phase. I will forgo some growth to avoid some volatility and reduce the risk of a quick dive. The Fed has stated that they don’t see an interest rate increase in the foreseeable future (whatever that means). Also, short term bond funds make as much or more from trading than from interest earned, and their returns, while small, are generally pretty consistent. I’ve also gotten more tax exempts over the last couple of years as our income taxes are getting ridiculous.
The post didn’t say that was was the intent, it said that was the result. Our current capital gains taxation system does that, by taxing dollar gain without regard for the inflation in that gain and disallowing losses (except small ones and for use to offset gains).
