A friend of mine is way up the food chain with Citigroup. He did not have the exact numbers but said last week that their analyst's are very worried that last 10 days to 2 weeks or so their has been a measurable pull back from foreign individual investors and foreign institutional investors from Treasury bonds ...their fear is inevitable hyper inflation if the trend is an actual movement .............. coupled with all the other issues we could say the D word without question,,,that is the obvious effect and I think we can speculate based on the timing as to cause...but whether it is a blip/trend or movement is yet to be determined...does anyone have any data regarding same or similar experiences? Thanks.
Just my opinion but i don't think there will be hyper inflation. I'm tracking the treasury spreads and it's at 2%. Hopefully it will continue to still fall. It could be just an over bought US Dollar and foreign investors are pulling out to get into EUROs or other alternatives. That's just what i'm guessing. Seriously, who knows what those investors are up to.
Thanks Cris. The only fear I have is that this is a 7-10 day trend according to my buddy and not a 2 day blip. Thats why I asked if anyone else was seeing this. Regardless the debt to GDP is way high ... mostly because of government/individual and not corporate debt. Regardless of why they are moving away from T's and currency .... if it continues it is HUGE bad news. I cannot see any other outcome other than a significant devaluation of the dollar or super inflation...I am not in "the business" though...do you see any other way out if this is a trend?
I think we are going to see inflation....but not for another year or two.... Right now...we're gonna see deflation...based on lack of demand. I think China posting their own huge economic stimulus plan will have a better affect...but certainly... We need to get used to the one good week...couple bad week financial streaks. This is gonna be drawn out...long...and painful.
The debt to GDP really isnt that high though.... It was this high in 1996 as well....and the year after world war two...it was much higher..and we still went on a big economic boom...as well as another economic boom after 1996....
There are a million and 1 ratios and exceptions when calculating the ratios so it depends on which one supports your viewpoint...but with corporate and individual debt and adjusted unemployment figures included it is running 90%...and the highest in history...I think that is pretty high....and GDP is tracking down...not good.
Specific to my question...How can foreign investment pull back (if it indeed is not a "blip")not cause inflation regardless of demand, and particularly if demand is down (as you said...IT IS)...the demand side has nothing to do with T notes having to be paid back and unless we simply print more money (leading to inflation and devaluation)...how in the world is there ANY other option?...I know I am not in the business but I think this is common sense....unless I am totally missing something like foo-foo dust to stimulate demand. This is not for the POFO forum...I am now discovering I hate ALL politicians for helping put in an express lane to this mess!!!!!!
There is a thread in POF titled uh oh...but this is now no longer a concern but a legitimate "oh crap"...................we are there folks.....and it ain't anywhere in the same area code as good....our spending has really made this mess worse and the consequences are almost unimaginable now.....this is no "ordinary" recession any longer..............
It wasn't an ordinary recession to begin with, IMO. Mentioned this on the PoFo the other day, but it might be time to swap cash for precious metals like gold and silver. Might also be time to look into firearms purchases, presuming you can find any on the shelves. On that note, Ruger and Colt might make good short-term investments if you're willing to put money into the market.
