Comments on: Inflation, Deflation, Real Estate, The Dollar and Their Effect On Equities http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/ Stocks, Options, Currencies and One Big Dummy Fri, 18 May 2012 20:40:23 +0000 http://wordpress.org/?v=2.2.3 By: Will http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1780 Will Tue, 20 Mar 2007 02:38:30 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1780 livepost - I honestly don't know any of the smart money people well enough to say for sure, but I'd guess some of "all of the above", with bonds in last place ... I <em>can</em> tell you what the "dumb" money is doing right now: sitting tight and hoping, or worse yet, averaging down. livepost - I honestly don’t know any of the smart money people well enough to say for sure, but I’d guess some of “all of the above”, with bonds in last place … I can tell you what the “dumb” money is doing right now: sitting tight and hoping, or worse yet, averaging down.

]]> By: livepost http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1776 livepost Mon, 19 Mar 2007 22:33:04 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1776 Great post. So where is the smart money going? Bonds, Yen, other currencies or bonds, or simply shorting the market? (or maybe all of the above). Great post. So where is the smart money going? Bonds, Yen, other currencies or bonds, or simply shorting the market? (or maybe all of the above).

]]> By: Will http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1765 Will Mon, 19 Mar 2007 14:33:38 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1765 Matt- Thank you. I agree that we Little Guys are able to discuss the ugly stuff with a lot more freedom since we can focus more on "what we see" and less on "what sells" or "what they need to hear to keep them happy". Matt- Thank you. I agree that we Little Guys are able to discuss the ugly stuff with a lot more freedom since we can focus more on “what we see” and less on “what sells” or “what they need to hear to keep them happy”.

]]> By: Good to Go Posts . . . « Trading for the Masses http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1763 Good to Go Posts . . . « Trading for the Masses Mon, 19 Mar 2007 12:46:54 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1763 [...] to Go Posts . . . Jump to Comments Inflation, Deflation, Real Estate, The Dollar and Their Effect OnEquities [...] […] to Go Posts . . . Jump to Comments Inflation, Deflation, Real Estate, The Dollar and Their Effect OnEquities […]

]]> By: Matt http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1756 Matt Mon, 19 Mar 2007 03:15:13 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1756 Great stuff here. Amazing how the blogosphere has plenty of similar thoughts out there on this stuff, yet the mainstream fortunes and forbes couldn't touch this with a ten foot pole. I guess it all comes down to advertising dollars and this article wouldn't help mags be sold. Keep up the good work!! Great stuff here. Amazing how the blogosphere has plenty of similar thoughts out there on this stuff, yet the mainstream fortunes and forbes couldn’t touch this with a ten foot pole. I guess it all comes down to advertising dollars and this article wouldn’t help mags be sold. Keep up the good work!!

]]> By: Will http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1748 Will Mon, 19 Mar 2007 01:24:58 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1748 Fan, I agree that deflation is often a notable part of the bigger picture that always seems to coincide with the end of "pure Democracies" and the beginning of Tyranny/ Dictatorship in the historical cycle of civilizations. Our founding fathers were wise enough to TRY to avoid the "pure democracy" situation by setting up our constitutional/representative republic... just as they TRIED to make it impossible for the government to print unlimited fiat currency, but we're so smart and creative, we've found ways around all of their safeguards. I'm afraid we're probably not more than a generation or two from pure Mob Rule at this point, so I'm thinking they gave it a great try, and this democratic republic lasted longer than any so far (I think?), but we're headed for the same eventual outcome. And I completely agree with you that those in power (<em>whichever</em> "party" they hail from) know it's in their interest to keep money supply and inflation gradually spiraling upward, and in doing so keep the public's "minds empty and their bellies full." Fan, I agree that deflation is often a notable part of the bigger picture that always seems to coincide with the end of “pure Democracies” and the beginning of Tyranny/ Dictatorship in the historical cycle of civilizations. Our founding fathers were wise enough to TRY to avoid the “pure democracy” situation by setting up our constitutional/representative republic… just as they TRIED to make it impossible for the government to print unlimited fiat currency, but we’re so smart and creative, we’ve found ways around all of their safeguards. I’m afraid we’re probably not more than a generation or two from pure Mob Rule at this point, so I’m thinking they gave it a great try, and this democratic republic lasted longer than any so far (I think?), but we’re headed for the same eventual outcome. And I completely agree with you that those in power (whichever “party” they hail from) know it’s in their interest to keep money supply and inflation gradually spiraling upward, and in doing so keep the public’s “minds empty and their bellies full.”

]]> By: Fan http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1724 Fan Sun, 18 Mar 2007 00:26:38 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1724 Will, you forgot something important. The reason they fear deflation so much is that it usually leads to revolution and a change in government. Inflation is also self-interest on the part of the guvmint. Will, you forgot something important. The reason they fear deflation so much is that it usually leads to revolution and a change in government. Inflation is also self-interest on the part of the guvmint.

]]> By: Will http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1680 Will Sat, 17 Mar 2007 04:03:11 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1680 QUIKTDR - thanks for the heads up on the QuoteTracker product; just fished your comment out of moderation among a slew of spam. QUIKTDR - thanks for the heads up on the QuoteTracker product; just fished your comment out of moderation among a slew of spam.

]]> By: Will http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1679 Will Sat, 17 Mar 2007 03:48:18 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1679 B2C- Yep, you hit the nail on the head. One of the purposes the Fed serves is to gradually shift wealth <em>away</em> from all those (we) productive workers and <em>to</em> the beaurocracy by adding money to the system. I was astounded the first time I read that the government could simply "inflate" away as much wealth as they needed from us to finance their spending, with no true "income" tax; it would just be less <em>politically</em> acceptable to do it that way alone. I know you already understand this, but my statement above may have some folks saying, <em>WTF?</em> ... so allow me to wander for another moment- imagine there's a company with 1000 shares of stock outstanding, and the company is worth $1 million, so the shares are worth $1000 each. Bob works for the company, has worked very hard and bought 100 shares for himself, for $100,000. Now, in this company, the CEO has the power to print more shares of stock anytime he wants. For whatever reason, the CEO decides he needs to "use" some of the company's wealth for his own purposes. He simply prints another 1000 shares of stock and issues them to <em>himself</em>. The company is still worth $1 million, but due to the "split", the stock shares are only worth $500 each, since there are now 2000 shares outstanding. The CEO's newly-printed shares are worth $500,000... half the <em>wealth</em> of the company has been quietly and surreptitiously CONFISCATED from Bob and his fellow workers, <strong>without their knowledge</strong>. The only thing they see is that when they go to trade some of their stock shares for a tangible item, say a new car, it now takes <em>more</em> of those shares to buy the same car than it would have last year. To them it appears that the price of the car has gone UP, when what has actually happened is that the value (the wealth represented per unit) of their "stock" has instead gone DOWN due to the dilution from the extra printing. <strong>The government is the CEO, we are Bob and the "shares" are our wonderful dollars</strong>, and that, in a nutshell, is how the government, via the Fed, can confiscate our wealth at will through inflation-- simply by printing more money. Sorry to go off of the beaten path like that, but your comment made such a good point, I just couldn't resist continuing along that same "Fed thread" for a bit. B2C- Yep, you hit the nail on the head. One of the purposes the Fed serves is to gradually shift wealth away from all those (we) productive workers and to the beaurocracy by adding money to the system. I was astounded the first time I read that the government could simply “inflate” away as much wealth as they needed from us to finance their spending, with no true “income” tax; it would just be less politically acceptable to do it that way alone.

I know you already understand this, but my statement above may have some folks saying, WTF? … so allow me to wander for another moment- imagine there’s a company with 1000 shares of stock outstanding, and the company is worth $1 million, so the shares are worth $1000 each. Bob works for the company, has worked very hard and bought 100 shares for himself, for $100,000. Now, in this company, the CEO has the power to print more shares of stock anytime he wants.

For whatever reason, the CEO decides he needs to “use” some of the company’s wealth for his own purposes. He simply prints another 1000 shares of stock and issues them to himself. The company is still worth $1 million, but due to the “split”, the stock shares are only worth $500 each, since there are now 2000 shares outstanding. The CEO’s newly-printed shares are worth $500,000… half the wealth of the company has been quietly and surreptitiously CONFISCATED from Bob and his fellow workers, without their knowledge. The only thing they see is that when they go to trade some of their stock shares for a tangible item, say a new car, it now takes more of those shares to buy the same car than it would have last year. To them it appears that the price of the car has gone UP, when what has actually happened is that the value (the wealth represented per unit) of their “stock” has instead gone DOWN due to the dilution from the extra printing.

The government is the CEO, we are Bob and the “shares” are our wonderful dollars, and that, in a nutshell, is how the government, via the Fed, can confiscate our wealth at will through inflation– simply by printing more money.

Sorry to go off of the beaten path like that, but your comment made such a good point, I just couldn’t resist continuing along that same “Fed thread” for a bit.

]]> By: Born2Code http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1678 Born2Code Sat, 17 Mar 2007 03:24:06 +0000 http://dummyspots.com/2007/03/inflation-deflation-real-estate-the-dollar-and-their-effect-on-equities/#comment-1678 deflation is more natural than inflation. productivity has been rising for the last 300+ years. we grow more per acre, more frequently, i.e. greater yield. we produce more widgets per plant, greater yield. we computer more per second than ever before. we travel faster, communicate quicker... prices of most things should be dropping as it is easier and cheaper to increase supply than ever before... deflation used to be the norm... up till the Fed arrived on the seen. deflation is more natural than inflation. productivity has been rising for the last 300+ years. we grow more per acre, more frequently, i.e. greater yield. we produce more widgets per plant, greater yield. we computer more per second than ever before. we travel faster, communicate quicker… prices of most things should be dropping as it is easier and cheaper to increase supply than ever before…
deflation used to be the norm… up till the Fed arrived on the seen.

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