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[OP]
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Sep 16, 2012
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Deflation

I found this article interesting, read it yesterday with the holiday season in full swing and many retailers discounting goods, do you think that there is a chance of deflation occurring in Canada's economy ?
http://www.theglobeandmail.com/report-o ... e15758683/
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Deal Guru
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Feb 23, 2008
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I think the dropping Canadian dollar should help inflate prices.
Lets Go Blue Jays!!!
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Nov 27, 2006
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new propaganda??


I dont see lower prices on most goods. Same price as things have always beeen.
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Nov 27, 2006
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also why did TTC fare go up... metro pass costs 133.50 in the new year.. $5 a month raise. Thats like 3% aint it???? Oh wait.............. thats deflation.. I guess so because our fking ttc is deflating it's service.
[OP]
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I would not say propaganda, go to a mall and see the deals many stores are offering these days on products and the razor thin profits that many big box stores are now expecting, its the reality of increased competition and not enough variety in the type of shopping experience you get.
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Nov 27, 2006
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olek86 wrote: I would not say propaganda, go to a mall and see the deals many stores are offering these days on products and the razor thin profits that many big box stores are now expecting, its the reality of increased competition and not enough variety in the type of shopping experience you get.
lol............. wow razor thin profits on iphones and ipads...................... except gasoline went up how much? hydro went up how much? How much did your cellphone go up??? Thats deflationary pressure,..... right/////////////////////////////////

Also, wtf? Compeitition does not mean deflation.
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May 28, 2009
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The problem for all the central banks (US, Europe, Canada etc) is there is deflation or more exactly lack of inflation (since prices are not actually going down) in areas that they want to pump and high inflation in other areas that they dont want to pump.

lack of inflation in real investment in the private sector, hiring, wages
high inflation on food, gas, commodities, house prices etc

That is why people say QE is not working and is doing more harm than good. And the response from the central banks has been we just need to print moar!! to see the desired effects on the stuff we want to pump. And there lies the comparison with the lunatic (ie central bank) that keeps doing the same thing over and over and expecting a different result.

the talk about lack of inflation is the justification for all the stimulus going on for 5 years now : ZIRP, endless QE etc

one of the effects and goals of these stimulus measures is to debase your currency so as to boost your exports. This is what is called the currency war : everyone racing to debase their currency faster than the others so as to gain an export advantage.

Canada has been losing that war and now the Bank of Canada is signalling they want to debase some more. Question is can they debase faster than the others.
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Feb 15, 2008
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Yeah significant periods of stagnant/weak CPI ahead of us. Especially from the housing market now in the process of falling fairly broadly across Canada. And record levels of personal indebtedness which will be very difficult to expand on account of credit-worthiness.

I predicted such in the various housing threads. I took a lot of flack for it at the time, for suggesting that the whole idea of BoC rate hikes was nonsense. But now such seems to have been proven correct, and most of the talk in the media and amongst financial professionals is now for BoC policy rate cuts.

I believe the CAD$ is on its way up soon, personally, in response to this deflation and an associated credit contraction. So wouldn't worry too much about the foreign imported goods being much of a factor. USD$ strength is temporary at best.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jul 21, 2011
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qewcool wrote: lack of inflation in real investment in the private sector, hiring, wages
high inflation on food, gas, commodities, house prices etc

That is why people say QE is not working and is doing more harm than good.
The stock market and the RE market is up > 40% since the recession, so does QE work? Yes, it does but only to those who hold real assets. If you don't own anything, tough luck.
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zilber wrote: The stock market and the RE market is up > 40% since the recession, so does QE work? Yes, it does but only to those who hold real assets. If you don't own anything, tough luck.
Ummm, most of the stocks in the so-called "stock market" that have gone up significantly really aren't 'real assets' at all, but are merely fluff companies, with minimal earnings.

And even then, those stock owners haven't really fully recovered from the collapse, once you adjust for inflation. So I wouldn't exactly run around saying that things have been good for them.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 15, 2013
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Mark77 wrote: Yeah significant periods of stagnant/weak CPI ahead of us. Especially from the housing market now in the process of falling fairly broadly across Canada.
Hey OP check this out!
Rickson9 wrote: Actually your post said:
You said I've provided. You haven't. The original quote still holds true. That is:
^ This.
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Jun 28, 2007
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olek86 wrote: I found this article interesting, read it yesterday with the holiday season in full swing and many retailers discounting goods, do you think that there is a chance of deflation occurring in Canada's economy ?
http://www.theglobeandmail.com/report-o ... e15758683/
Deflation is falling prices. We don't have that - we have prices that aren't growing that fast - disinflation. Will that turn into deflation? Unlikely, especially since a lower C$ means imported prices (most consumer goods) will eventually become more expensive. In fact, a lower C$ is a big reason why the Bank of Canada is unlikely to cut interest rates even though a certain poster has gone on ad-naseum about "looming" rate cuts over the past several years.
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Mark77 wrote:
I believe the CAD$ is on its way up soon, personally, in response to this deflation and an associated credit contraction. So wouldn't worry too much about the foreign imported goods being much of a factor. USD$ strength is temporary at best.
..quoted for posterity - especially since the loonie is trading at just above 93 US cents today - I believe it was about a year ago when the loonie was around par that you "predicted" an even stronger currency. I might be wrong but when par goes to 93 US cents - that's a weaker currency no?
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Jan 11, 2004
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gomyone wrote: ..quoted for posterity - especially since the loonie is trading at just above 93 US cents today - I believe it was about a year ago when the loonie was around par that you "predicted" an even stronger currency. I might be wrong but when par goes to 93 US cents - that's a weaker currency no?
You are wrong and I'll tell you why.

<insert 3 paragraph reverse logic opinion>
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May 28, 2009
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zilber wrote: The stock market and the RE market is up > 40% since the recession, so does QE work? Yes, it does but only to those who hold real assets. If you don't own anything, tough luck.
It is working great to create bubbles in assets yes but for the central banks stated goals which are the real economy and unemployment levels no. The federal reserve said it is watching unemployment levels (below 5-6% dont remember) as an indicator to start tapering QE, not the SP500. Maybe its the other way around and all they care about is the SP500 levels ? That would explain everything but then you would have riots in the streets (at least one would hope).

Growth, employment, wages have been stagnant at best for 5 years. Food Stamps usage has seen strong growth in the US. Labor participation is at a all time low in the US. Talk to average people and nobody feels any richer or that their situation is getting better. Youth employment is disastrous. Pension returns are next to nil thanks to ZIRP.

Meanwhile the fed balance sheet has grown to monstrous proportions. It now owns 1/3 of the US bond market. Excess liquidity is slushing around trying to find a place where it can grow creating bubbles all over the places. Not the real economy (like hiring and capital investments in production) of course, nobody is expecting lots of return from that. But stuff like TSLA, and Amazon with no profits and shooting to the moon. The surge in btc prices is also, I suspect, correlated with excess liquidity running around, searching for returns. Real estate and financial innovation (aka new ways to leverage) also benefit.

What it creates is a dangerous environment where prices of a lot of assets are less and less connected to any fundamentals anymore and more and more connected to the continuing flow of liquidity provided by the central banks. The longer it goes and the harder it will be for the central banks to stop the flow of liquidity when they need to. Stopping will mean sharp changes in prices that can cause strong social upheavals. Hardly the "price stability" they say they are aiming for.

Misallocation of resources and malinvestments are the words of the day.
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Jul 21, 2011
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qewcool wrote: It is working great to create bubbles in assets yes but for the central banks stated goals which are the real economy and unemployment levels no. The federal reserve said it is watching unemployment levels (below 5-6% dont remember) as an indicator to start tapering QE, not the SP500. Maybe its the other way around and all they care about is the SP500 levels ? That would explain everything but then you would have riots in the streets (at least one would hope).

Growth, employment, wages have been stagnant at best for 5 years. Food Stamps usage has seen strong growth in the US. Labor participation is at a all time low in the US. Talk to average people and nobody feels any richer or that their situation is getting better. Youth employment is disastrous. Pension returns are next to nil thanks to ZIRP.

Meanwhile the fed balance sheet has grown to monstrous proportions. It now owns 1/3 of the US bond market. Excess liquidity is slushing around trying to find a place where it can grow creating bubbles all over the places. Not the real economy (like hiring and capital investments in production) of course, nobody is expecting lots of return from that. But stuff like TSLA, and Amazon with no profits and shooting to the moon. The surge in btc prices is also, I suspect, correlated with excess liquidity running around, searching for returns. Real estate and financial innovation (aka new ways to leverage) also benefit.

What it creates is a dangerous environment where prices of a lot of assets are less and less connected to any fundamentals anymore and more and more connected to the continuing flow of liquidity provided by the central banks. The longer it goes and the harder it will be for the central banks to stop the flow of liquidity when they need to. Stopping will mean sharp changes in prices that can cause strong social upheavals. Hardly the "price stability" they say they are aiming for.

Misallocation of resources and malinvestments are the words of the day.
Well there is no hope for our government to take the printed money and distributed to canadians evenly, so why not just go with the flow, get into the game and get the max out of this gravy train before it ends.
[OP]
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Sep 16, 2012
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There is defiantly, asset bubbles occurring, the minute easing was even talked about back in may, both stock markets and emerging economies saw out flows widen, hence why places like India where struggling so broadly earlier this year, the fear of tapering will cause some wrinkles in the world economy, no one can say how big and how long they will last.
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Aug 12, 2004
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gomyone wrote: ..quoted for posterity - especially since the loonie is trading at just above 93 US cents today - I believe it was about a year ago when the loonie was around par that you "predicted" an even stronger currency. I might be wrong but when par goes to 93 US cents - that's a weaker currency no?
This was posted about a year ago. He posts so many erroneous predictions, you do a quick search and have literally hundreds of posts to chose from.
Mark77 wrote: Its my view that we'll see, due to domestic deflation, a complete inversion of the situation in the 1990s, ie: $1.4-$1.5USD (ie: $1 CAD buys $1.4 USD), before this is all said and done. After all, now that the CMHC limit has been reached, there will be very little lending for housing, and credit has probably peaked. Taking out credit is essentially 'shorting' the Canadian dollar. When these Canadian dollar shorts are un-wound, dollars tend to get relatively expensive.
Ironically, as pointed out in a previous thread, the CMHC limit is nowhere near being hit, and total insured assets has actually gone down by over 6% in one year alone, while housing continues to climb at the same time (despite his outright denial of reality), a double whammy for his claims.
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Firebot wrote: Ironically, as pointed out in a previous thread, the CMHC limit is nowhere near being hit,
Actually it was. Didn't you take note of the steps that had to be taken by the Minister of Finance?
and total insured assets has actually gone down by over 6% in one year alone, while housing continues to climb at the same time (despite his outright denial of reality), a double whammy for his claims.
Housing isn't climbing anymore. Its falling. The stats make this very clear. Especially on the sorts of properties that CMHC mostly insures.

And a higher CAD$ wasn't a short term prediction. After all, there's two sides of the currency pair, and the USD$ has been doing quite strongly lately. But as things slip away down there, hard to see it lasting much longer.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...

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