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Billionaires Selling Off Stocks
Started by NOsaintsfan
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24858
seriously? this has been on the internet now for what? 2 years? when is this guy going to give up, his prediction didnt work 2 years ago, i guess if he keeps this going, eventually he will have to be right.
so yeah ive seen this and yeah its old news, maybe hes right who knows, but eventually he will have to be right, right? lol, so the stock market is tearing stuff up right now, not that i invest in blue chips.
have fun
The comment at the end of the article sums up my thoughts. This is nothing more than an ad for his book.
I don't disagree that the economic outlook is fairly bleak, but this is just doomsday talk that is prevalent everywhere. I probably won't buy his book despite the free advertisement on moneynews.com
I don't disagree that the economic outlook is fairly bleak, but this is just doomsday talk that is prevalent everywhere. I probably won't buy his book despite the free advertisement on moneynews.com
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It may be a marketing ploy but you cannot ignore the fact that the US has printed A LOT of money over the last 6 years or so.
Inflation will eventually catch up with us. I don't see how it doesn't unless the government starts taking measures to pull a lot of money out of circulation.
Do you all really not see inflation as a problem looming in the future?
Do you think its possible that the economy will grow at such a rate to offset the amount of money printing?
I'm not sure at what rate the economy would have to grow but I would guess much faster than the 3-6% that we have seen in the good economic times.
How do we avoid this?
I'm not trying to be an alarmist, I'm wanting a genuine discussion. If you think their is no problem looming that's fine but can you share some insight as to what makes you so confident?
Inflation will eventually catch up with us. I don't see how it doesn't unless the government starts taking measures to pull a lot of money out of circulation.
Do you all really not see inflation as a problem looming in the future?
Do you think its possible that the economy will grow at such a rate to offset the amount of money printing?
I'm not sure at what rate the economy would have to grow but I would guess much faster than the 3-6% that we have seen in the good economic times.
How do we avoid this?
I'm not trying to be an alarmist, I'm wanting a genuine discussion. If you think their is no problem looming that's fine but can you share some insight as to what makes you so confident?
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24858
i am no economist and dont pretend to be one. i dont feel an upcoming disaster anytime soon. i knew the housing crisis was coming, i mean it didnt make sense that homes were costing half a milliion dollars and you have people working and making less than 50k a year, in some spots thats still the case and i still see some housing markets correcting. me personally i find a piece of the market i like, some analysts i like and try to turn a buck. as far as macroeconomics, i dont see any huge disaster, thats whats great about economics, tomorrow www3 could occur and my thoughts could change quickly, but right now, no. debt is bad but its a part of life. we live in the greatest country in the richest time in history, i just try to soak that up as long as i can. doomsday scenarios? too depressing
Debt is bad, but it's okay because it's a part of life? Unfortunately, debt crisis and hyperinflation are also a part of life. Just ask any civilization in history with fiat.
That's one big infomercial.
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24858
what the hell are we going to do about it? obviously the idiots in washington dont care. so we can either whine about it all day or try to make some money and survive. to me its better to solve the things i can and try not to get worked up over the things i cant. i live debt free. i have zero debt. i hate debt. but washington? their idiots, but so be it.
I was responding to your assertion that you don't see disaster happening, yet you obviously realize the destructive nature of debt. What do you think will happen when unsustainable debt accumulation continues on? And soon is a relative term. Do I think anything big will happen in the next 5 years? Probably not. In the next 10-15? Much more likely. For myself, that's "soon."
How inflation and the monetary supply works is much more complex then this. The "supply" of money in the economy isn't a set number, it is a flow largely based on monetary velocity, or how frequently money is changing hands. In a recession like the one we went through, where banks cut back on lending, this creates an effective contraction of the monetary supply given that less money is "flowing" through the economy. The feds "creation" of money is necessary to combat this to even keep the money supply constant. Of course if the economy takes off, adjustments will have to be made to prevent inflation, but its hardly the doomsday scenario of "we printed all this money so here comes inflation" that many proclaim.
Long term, sure, but what does this have to do with stock prices?
It doesn't follow that inflation and QE / "money printing" will lead to a stock market crash or correction. It seems just as likely to me (more likely, actually) that stock prices would inflate with everything else.
No, but again, tying this prediction of low long term growth (which I agree with) to whatever digits will scroll across the ticker at any particular point in the future doesn't necessarily make any sense.
Actually the scenario that I'm concerned about is high inflation, like in the area of 10% or so. I don't see this as being unrealistic, and could happen in the next decade. If you have that sort of inflation then peoples savings are in effect reduced and can lead to a sell off of stocks. Why? In a simple way because peoples money doesn't buy as much so people burn through their savings quicker and need to cash out stocks. I realize that the issue is complex and their isn't a linear correlation between inflation and stock price but the general concept is valid.
If you can grow the economy then then the effects of inflation can be offset. The reason I'm worried about inflation is because the spending hasn't been as controlled as DoctwoB is implying. It's not as if all the excess money that has been printed has been funneled to reserve banks and it sitting there waiting to be leant out to major institutions. If that were the case then yes there would be a much tighter control over the money supply. Much of the money printed has gone to pay for our deficits. Meaning that a lot of money is making its way into the hands of corporations that are contracted for government services. There is a lot less control over this money.
My worry is that their is a lag in the amount of time it will take for the bolus of cash to effect the market place, however we have pumped so much money into the market that when the effects begin to show it will be very difficult to get the inflation under control.
Another way to think of it is to remember that over the last 6 years or so we have almost doubled the national debt to ~17 trillion. That money isn't imaginary and has already been spent. So the 8 trillion or so that we have spent in 6 years is already in the market place. I'm afraid that the effects of that haven't been felt yet.
As others have stated above, as individuals I realize that their is little we can do about this, however I'm interested in different opinions on the issue.
Inflation has already hit 10%, according to Shadowstats. According to them, the govt kept changing the method of calculating consumer price index (CPI) to keep the inflation rate artificially low. Based on the original method of calculating CPI, the current year to year inflation is around10%.
http://www.shadowstats.com/alternate_data/inflation-charts
Likewise for unemployment.
http://www.shadowstats.com/alternate_data/unemployment-charts
The best way to predict which measurements people use is their politics. I prefer to use the numbers that are measured by economists etc. rather than numbers without proper controls that are bandied about for political purposes.
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deleted126335
Shadowstats is another gloom and doom website that makes money through subscriptions. If there was no government conspiracy and the gov't numbers were accurate, they they wouldn't make much money. 🙂
For inflation try the MIT billion prices project:
http://bpp.mit.edu/usa/
Agrees pretty closely with the government numbers
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I wonder about the real-world connection between the BPP and actual normal human expenditures. People don't buy a billion different things online each year. They buy a lot more food and gasoline and clothing than 19/64" drill rods from Grainger's online. Maybe the % reported by the BPP is weighted toward what people actually buy, but I don't see their methods detailed anywhere, and if such weighting exists, it would introduce its own external bias..
Per http://www.bls.gov/cex/csxann11.pdf in 2011, after taxes and shelter, the average US family spent, in descending amounts
- food $6,443
- utilities $3,645
- healthcare $2,976
- entertainment $2,835
- vehicle payments $2,755
- gasoline $2,715
- vehicle maint $2,621
- clothing $1,801
and some other anklebiter stuff totalling a couple thousand $ ... and $761 worth of booze and nicotine delivery products.
Is it more important that the billion widgets and gizmos sold online were found to have only gone up 1-4% annually, or that gasoline has gone up an average of 9.5% annually for the last 10 years?
You're right, shadowstats has an agenda. But I remain skeptical that actual inflation has been 1-3% the last few years. I'm also skeptical that there is a plausible exit strategy from perpetual QE, and that there is a significant future inflation threat, but that's sort of a separate issue.
D
deleted126335
I am not a student of the inflation rate or how it is derived. Gut feeling, Inflation for US residients varies greatly depending on your demographic. Health care, gasoline, education, high quality food have been aprreciating greater than the stated inflation rate. Natural gas, personal services, aka wages for low skill jobs, cost of housing, low end food have been below the inflation rate.
The person on public assistance sees a different inflation rate than the middle class, or the low end rich, or the upper class.
Maybe these things should be weighted on a percent of budget on a per capita basis? I honestly don't know.
I don't have hard numbers but I can attest to the fact that inflation is real through my own life experiences. I went to Iraq as a contractor for long stretches of time (Jan. 2006-June 2008; June 2010-June 2012). When you're over there living on a military base it's sort of like your outside of the real world in terms of cost. Food is free on base, gas is free as well. Basically anything you need is provided except shampoo and deodorant.
Both times I came home I was literally shocked at how the cost of things went up. Specifically gas and food.
I realize that my experience is completely anedotial but I am very skeptical of 1-3% reported inflation.
When you step outside of the economy for a few years then come back the difference is pretty stark.
Both times I came home I was literally shocked at how the cost of things went up. Specifically gas and food.
I realize that my experience is completely anedotial but I am very skeptical of 1-3% reported inflation.
When you step outside of the economy for a few years then come back the difference is pretty stark.
I think that's exactly the problem with published inflation numbers. Things people need have increased in price substantially. If non-essentials have grown cheaper (like laptop computers, flat screen TVs, which have absolutely crashed in price over the last 10 years) maybe overall inflation really is 3%.
Inflation for consumable necessities + deflation of assets and luxury goods might balance the scorecard in a reassuring way, but that combination isn't good for people.
Low inflation saves the government money in lots of ways, and it adds a cushion to reported GDP numbers which makes everyone feel better. There are great reasons to choose a metric that systematically underreports inflation. Of course it's being done. Of course it is. Deciding what if anything to do differently as individuals is the hard part.
