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Wednesday, July 1, 2020

Inflation or deflation

Hi readers
So inflation is an environment where both asset values and valuations increase with the ample amount of money floating around the system.
Employment is easy to come by.
Wages are supposed to follow the trail with goods and services including at the end of the cycle.
The economy is supposed to feel the slush of money going around, with depreciation levels low due to the level of money floating around.

A Deflationary environment  is when money is tightened, paper assets are stagnant or falling.
What you tend to see is depreciation levels rise considerably, and property values play the same tune as paper assets.
Employment is hard to find with low wages and services come down in prices.
The one thing that does increase in prices is essential foods.

The one thing to consider which seriously confuses so many old fashion gold believes.
Gold isn't a hedge to the dollar or a reserve currency.

I've heard the $5000 an ounce on gold when I was a hedge fund manager 15 years ago and there still playing the same tune.

The current money being poured into the financial system isn't being filtered into the economy therefore your not going to see any inflation.
Even tho $6 trillion was pumped into the financial system your not seeing the same bang for the buck as 2 trillion went to hedge funds to bail them out of the loosing position they held.
The other 1.6 trillion the fed is buying the debt from every zombie company out there.
Money needs to be pumped into the Economy not assets.

The stupidity of old men running an economy, people tends to innovate in a time of adversity, economies fall into recession to clean out the excess. The fact that this isn't being allowed to run its course only enhances the kicking the can down the road scenario for future generations to deal with.
Are we the most incompetent generation where we expect government to do everything for us.
Government are only meant to protect of from threat of an aggression.
It's in the Constitution in Australia, UK and in the US constitution.
Now they have been allowed to run out lives and continue to increase there power with this bullshit virus, which is the flu nothing more at the present time .


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