Inflation Or Deflation ?

[churchill]

Deflation looks on the cards ? with property values going down in the US and Europe I cannot see where spending/confidence is coming from . It looks as if an adjustment is taking place with contraction in the west and expansion in the east .

So probable weakening of US / Euro and strenghtening of China , S/E Asian Currencies -

The NIKKEI went from around 30,000 to around 10,000 - So given those lessons where is the best place to invest to protect and increase ones investments ?

Does Gold do well with deflation ? or to stick to investing in stocks in China and S/E asia-

Or Property / Land in Asia ?/

[chiang mai]

Deflation looks on the cards ? with property values going down in the US and Europe I cannot see where spending/confidence is coming from . It looks as if an adjustment is taking place with contraction in the west and expansion in the east .

So probable weakening of US / Euro and strenghtening of China , S/E Asian Currencies -

The NIKKEI went from around 30,000 to around 10,000 - So given those lessons where is the best place to invest to protect and increase ones investments ?

Does Gold do well with deflation ? or to stick to investing in stocks in China and S/E asia-

Or Property / Land in Asia ?/

I have no answers but just want to add some factors by ay of additional input:

Uk property value is increasing and there is much talk of property bubbles in Asia, case in point is Hong Kong and China.

And not to ignite a separate thread on the subject of Gold but there seems to be a strong field of thought that suggests gold is now too expensive.

[churchill]

Property prices in the UK are increasing because of low historical interest rates - What is the transaction rate? - I do not know but I would think that price increases are based on a very small number of transactions .

So given unemployment , I see prices falling from here - If Sterling falls property may be supported by overseas investment .

Edited October 30, 2009 by churchill

[Abrak]

Its quite difficult to see Asian currencies appreciating while the dollar depreciates.

If you believe in deflation then you ought to buy yield. Risk free yield seems very low at the moment. So in my view you are better off buying it through stocks. (I suspect there are opportunities in corporate bonds but I dont follow them.) Theoretically the bonds with a fixed return will do better than stocks whose earnings will be affected by deflation.

[chiang mai]

I think it's both one and two in some ways - demand outstrips supply hence supply is scarce plus lots of cash chasing that short supply, don't know, I'm very confused by it all. What I do know first hand is that the bottom end of the housing market has been extremely buoyant for the past three months or so hence limited supply has pushed up prices, where it will all go from here is a mystery although the quote from Reuters today maybe has a clue:

"Inflation expectations for the coming year picked up to 2.0 percent from 1.8 percent in September, according to the Citigroup/YouGov survey. The median for inflation expectations for the longer term -- five to 10 years ahead -- rose to 3.2 percent in October, the highest in more than a year, having stood at 3 percent for the previous five months".

Edited October 30, 2009 by chiang mai

[chiang mai]

Its quite difficult to see Asian currencies appreciating while the dollar depreciates.

But that's exactly what is happening, isn't it, Yuan and THB are good examples, albeit both are being restrained through intervention.

[churchill]

Jim Rogers, Marc Faber agree US dollar due for temporary rebound

INTERNATIONAL. Investment gurus Jim Rogers and Marc Faber agree to a various degrees on many issues but the one thing uniting them this week is the future direction of the US dollar. They see a correction looming in the US currency.

Both Faber and Rogers have been warning about the effect of the current monetary and fiscal policies for the US, since the current rally has been mostly based on printed money, a kind of 'reverse Robin Hood policy' of governments, to steal from the peasants to give to the rich.

As with Faber, Rogers is mostly to be seen being interviewed on CNBC and Bloomberg Asia or Europe, as they both live in Asia now and since their views are to put it mildly, somewhat negative on the prospects for a sustainable US recovery.

Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said in a video interview Thursday at Barron's Art of Successful Investing Conference that the US dollar is probably at a low point and could have “some kind of rebound”, but it remains in a “structural long term bear market” in terms of purchasing power.

Sadly, other currencies are not any better either, Faber said.

Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said a rally in the dollar may last for “a while” as equity and commodities markets decline.

Speaking in an interview with Bloomberg television in Singapore, Rogers said: “Everybody is pessimistic on the dollar..whenever you have everybody on the same side of the boat, you know what you have to do. We may have a rally in the dollar, a decline in commodity prices or stock prices for a while.”

Rogers reiterated a long-held belief that printing of the US currency to help revive the economy would weaken the greenback and Treasuries. So any rally in the dollar won’t be sustainable, he says.

The dollar has weakened so far this year versus all but one of its 16 major counterparts, including a 5.7% drop against the euro. The currency traded at US$1.4812 per euro Thursday, after gaining 1.5% over the previous three days.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major US trading partners, fell to 76.090 today, from 81.308 at the end of last year.

“The dollar is overdue for a rally,” Rogers said.

Investors have been reducing bets that the dollar will decline versus the yen and the euro. The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so- called net longs -- was 36,033 on October 20, compared with net longs of 43,367 a week earlier. Similarly, net yen longs were 31,185 on October 20, from 33,339 a week earlier, according to Bloomberg.

Rogers also said that he “certainly wouldn’t be buying US Treasuries” and “couldn’t imagine lending money to the US government for long periods of time.”

In his Barron's interview Faber also said there was “some kind of protectionism” going on in the world, for example the US, but he does not believe currency devaluation would solve anything as some tend to believe.

Since most investors are underweight on emerging markets, Faber recommends that now is a good time to increase the holding in emerging market stocks in countries such as Thailand and Vietnam, as price levels are still low and could “hold there for a long time.”

Faber also says cash at current zero percent rate is less attractive than equities in the long run.

http://www.bi-me.com/main.php?id=41570&amp...;cg=4&mset=

[churchill]

Quote "Since most investors are underweight on emerging markets, Faber recommends that now is a good time to increase the holding in emerging market stocks in countries such as Thailand and Vietnam, as price levels are still low and could “hold there for a long time.”

I also think that investing in S/E Asia at this time may be the best option .

[chiang mai]

The issue for most Brits I believe, given that the Pound has fallen as far as it has, is will it fall any further and if so by how much. If GBP holding British expats think it's going to fall further then investing in Asian products and currencies/products makes sense. But if, as some people believe, the bottom is now set then investing in Asian currencies/products is not wise. The final part of this picture of course is which currency does the holder intend to invest and spend longer term, if at some point it's GBP then there's a serious gamble in all of this.

[Abrak]

Its quite difficult to see Asian currencies appreciating while the dollar depreciates.

But that's exactly what is happening, isn't it, Yuan and THB are good examples, albeit both are being restrained through intervention.

Well I agree that both currencies are being massively constrained by intervention but not that say the baht is really appreciating except against the dollar. It was higher on a trade weighted basis 2 years ago. But I guess you are right to the extent that if you are intervening so heavily to keep your currency down it is obvious worth more.

At least an Asian currency is US$ with upside in general.

I get the feeling that Faber, Rogers etc who are short term bullish of the dollar are basically taking the view that asset markets are generally over bought and the dollar is basically oversold. So you may well see a mini version of 2008 where asset markets are sold off heavily and everyone fled to the dollar.

Anyway if you think about it, it is a very unhealthy investment climate out there. First of all everything is priced off cash. So it is governments policy to take interest rates to zero and do a bit of printing, so as to make cash as worthless as possible. (Incidentally when your structural problem is a lack of savings this doesnt seem very constructive.) However, by rubbishing cash you helped reflate the housing and equity markets which in terms of valuation hardly made it to average values let alone bear market ones. The really good news is that the government can borrow irresponsible amounts of money at low rates.

That's why I dont really agree with the premise of deflation. The stock market's up, commodity markets are up, property markets are rising. I think that is inflation. The problem is it isnt real inflation (too much demand). And as I see it Bernanke et al will go on trashing cash until he has convinced people that he has created inflation at which point they will spend. So the medium term outlook is for inflation and ZIRP implying negative interest rates. As rates go increasingly negative then asset prices rise but how far can you take it. What sort of bank lends without a theoretical profit? And when rates go up we are all stuffed.

[lannarebirth]

That's why I dont really agree with the premise of deflation. The stock market's up, commodity markets are up, property markets are rising. I think that is inflation. The problem is it isnt real inflation (too much demand). And as I see it Bernanke et al will go on trashing cash until he has convinced people that he has created inflation at which point they will spend. So the medium term outlook is for inflation and ZIRP implying negative interest rates. As rates go increasingly negative then asset prices rise but how far can you take it. What sort of bank lends without a theoretical profit? And when rates go up we are all stuffed.

Someone started a thread in the Chiang mai forum abboutland prices. Going only from my own observations I stated that during this recent economic downturn not only had I not seen (maybe others have) prices declining, that I saw firmness and even price increases. I had no explanation for why this should be happening, as indeed sales turnover is less. I sqid it felt like there was a defacto currency devaluation going on and it was manifesting itself in asset price appreciation. I said that was probably an absurd notion, not to be taken seriously, but maybe not.

[Abrak]

"Inflation expectations for the coming year picked up to 2.0 percent from 1.8 percent in September, according to the Citigroup/YouGov survey. The median for inflation expectations for the longer term -- five to 10 years ahead -- rose to 3.2 percent in October, the highest in more than a year, having stood at 3 percent for the previous five months".

The problem with these figures is they equate inflation with CPI and the CPI numbers are essentially rigged....

(1) Governments have found all sorts of ways bringing down CPI (the fact that it bears no relation to real inflation is obvious from the money supply figures.) So for instance US$1000 computers one year that cost US$1000 the next but have extra DRAM and processing power are subject to quality adjustments (namely priced downwards). If the price of steak goes up and hamburgers down then more hamburgers and less steak is added to the basket (to me the price of steak has just gone up). And then they introduced 'core' inflation. So for instance if you revised CPI based on pre-1980s methodology it would look very different....

And it isnt a total conspiracy theory. As noted in the 1999 Economic Report of the President, page 93:

"A final reason for the slowing of reported price indexes has been methodological changes to both the CPI and the indexes used in the national income accounts …"

(2) The real inflation or deflation is in asset markets. (This sort of makes a nonsense of inflation targeting at 2% if you allow house prices to rise 25% per year.) And really the whole concept that inflation must be tied to excess demand in an economy is big news to Zimbabwe. If you devalue your currency by 50% a week your inflation is likely to be 100% a week and your real GDP -10%. Governments by reducing interest rates to zero and doing some printing plus heroically taking over from the consumer to generate debts have simply made cash horribly risky and expensive to own. People complain about equities being expensive but how expensive is cash? And what makes it worse is that say we would like to point at the US and say fiscal deficit, c/a deficit, ZIRP - what a joke? Your currency is collapsing 25% a year inflation going through the roof and if you think anyone is going to buy your US$2trn of USTs you must be mad. But the UK is doing the same, Japan is heading to oblivion and the Euro's future might depend on whether Eastern Europe collapses.

The really big problems are these....

(1) Bernanke has built his reputation on the basis that 1. deflation is a very destructive force and 2. it can always be avoided. He specifically advocates negative interest rates to inflate away excessive private and public sector borrowing. He will learn to fly the helicopter if he has to. Or he will simply buy up all the world's non-US assets. And to a certain degree he sets global monetary policy. So I do not see deflation as a policy option.

(2) This is all very well for a while - markets go up property goes up commodities etc. But essentially the US and the UK are out of ammo. They cant reduce interest rates and they cant increase their fiscal deficit. They are puffing as hard as they possibly can. So to a degree asset prices must be based on the lowest possible interest rates combined with the highest possible stimulus. Which really cant be good news. And from a policy makers point of view having no flexibility in your policies isnt too healthy either. And to the extent people are very bullish on markets all they are really doing is forecasting inflation (or I guess a V shaped GDP recovery) and higher interest rates sooner.

[Naam]

Its quite difficult to see Asian currencies appreciating while the dollar depreciates.

If you believe in deflation then you ought to buy yield. Risk free yield seems very low at the moment. So in my view you are better off buying it through stocks. (I suspect there are opportunities in corporate bonds but I dont follow them.) Theoretically the bonds with a fixed return will do better than stocks whose earnings will be affected by deflation.

as an aficionado of bonds my view is

-if you believe in deflation buy bonds with fixed returns.

-if you believe in inflation buy floating rate bonds.

-if you have (like everybody else) no bloody idea whether deflation or inflation is in the cards buy bonds which change after a few years from fixed coupons to floating ones or select bonds which already float and have already today an attractive yield inspite of the global interest rate lows.

caveat: bonds with presently attractive yields are not risk free but possess an extremely high risk/reward ratio. risk can be easily compensated with a high cash quota even though cash might yield a pittance. the only thing that counts is the bottom line!

[flying]

Deflation looks on the cards ? with property values going down in the US and Europe I cannot see where spending/confidence is coming from . It looks as if an adjustment is taking place with contraction in the west and expansion in the east .

Does Gold do well with deflation ? or to stick to investing in stocks in China and S/E asia-

Or Property / Land in Asia ?/

Have no ideas but to guess...money could be coming from those who

1) think they see a bottom/deal

2) want to get rid of some dollars in exchange for what they see as a tangible asset that stands a better chance of appreciating.

As for gold since most seem to say we are in a deflationary environment & seeing how gold/silver has done....I would have to say seems fine.

And not to ignite a separate thread on the subject of Gold but there seems to be a strong field of thought that suggests gold is now too expensive.

As compared to what? Where it was or where its going If the phony paper gold ever gets a run for actual delivery there could be quite a problem. Also having watched gold & silver this past year it seems to only gain strength. It seemed a problem to break 1k now it is normal. It has gone from 735/oz & each time paused at roughly 830...930...1030...coiling & after which it just kept going. We will see in Nov if it holds true.

I just cant help but wonder if valuation based on past price may be totally wrong this time due to circumstances being quite different than any past price point.

Edited October 30, 2009 by flying

[chiang mai]

I get the idea that the majority opinion here is that inflation is the real concern so I would guess that bodes well for interest rates, or does it! For my part I've remained in flexible cash, albeit at a low rate of return but continue to look for a decent real estate investment both in Asia and in the UK.

[sokal]

Deflation looks on the cards ? with property values going down in the US and Europe I cannot see where spending/confidence is coming from . It looks as if an adjustment is taking place with contraction in the west and expansion in the east .

So probable weakening of US / Euro and strenghtening of China , S/E Asian Currencies -

The NIKKEI went from around 30,000 to around 10,000 - So given those lessons where is the best place to invest to protect and increase ones investments ?

Does Gold do well with deflation ? or to stick to investing in stocks in China and S/E asia-

Or Property / Land in Asia ?/

Monetary deflation is credit contraction. There is no credit contraction, 0% interest rates and trilliions of stimulus and bailout is not what I call contraction.

[Abrak]

as an aficionado of bonds my view is

-if you believe in deflation buy bonds with fixed returns.

-if you believe in inflation buy floating rate bonds.

-if you have (like everybody else) no bloody idea whether deflation or inflation is in the cards buy bonds which change after a few years from fixed coupons to floating ones or select bonds which already float and have already today an attractive yield inspite of the global interest rate lows.

caveat: bonds with presently attractive yields are not risk free but possess an extremely high risk/reward ratio. risk can be easily compensated with a high cash quota even though cash might yield a pittance. the only thing that counts is the bottom line!

So what would be the typical difference in yield between a fixed rate and floating rate bond (of similar risk)?

Oh and what is it with these reverse convertibles like the 21.25% coupon one launched by GS into UK banks? Is it a time share deal? namely sounding pretty good but neither really attractive as a bond or equity play? Does it relate to the banks capital (cant see how) or is it just a way of GS making lots of money by righting puts or simply mixing debt with equity. I can see there is a potential tax saving involved (by payment of coupon through the option) but are they interesting?

[Naam]

as an aficionado of bonds my view is

-if you believe in deflation buy bonds with fixed returns.

-if you believe in inflation buy floating rate bonds.

-if you have (like everybody else) no bloody idea whether deflation or inflation is in the cards buy bonds which change after a few years from fixed coupons to floating ones or select bonds which already float and have already today an attractive yield inspite of the global interest rate lows.

caveat: bonds with presently attractive yields are not risk free but possess an extremely high risk/reward ratio. risk can be easily compensated with a high cash quota even though cash might yield a pittance. the only thing that counts is the bottom line!

1. So what would be the typical difference in yield between a fixed rate and floating rate bond (of similar risk)?

2. Oh and what is it with these reverse convertibles like the 21.25% coupon one launched by GS into UK banks? Is it a time share deal? namely sounding pretty good but neither really attractive as a bond or equity play? Does it relate to the banks capital (cant see how) or is it just a way of GS making lots of money by righting puts or simply mixing debt with equity. I can see there is a potential tax saving involved (by payment of coupon through the option) but are they interesting?

1. that depends on the interest rate environment. with today's extremely low interest rates a bond with a fixed coupon (issued during a high interest rate phase) will have price gains which reduces its yield but this yield is still higher than the one of a floater. when interest move up the effect reverses. floaters gain in price, fixed coupon bonds fall. yields can of course only be compared based on purchase price because current yields as well as YTM of fixed coupon bonds go up when the price falls.

2. never bothered with reverse convertibles, therefore i have no idea.

in my posting i referred to subordinates which presently yield a multiple what the senior bonds of the same debtor yield. but with subs the risk exists that coupon payments are deferred or even cancelled if the debtor does not make a balance sheet profit respectively does not pay any dividend. investing in subs is a science and requires tedious and time consuming own research it takes me an average of 5-6 hours to go through a single bond description which might have more than 200 pages (in which freaking lawyers use freaking language) but the rewards have been beauti-<deleted>-ful in the past and i expect them to be rather satisfying in the future

[Abrak]

1. that depends on the interest rate environment. with today's extremely low interest rates a bond with a fixed coupon (issued during a high interest rate phase) will have price gains which reduces its yield but this yield is still higher than the one of a floater. when interest move up the effect reverses. floaters gain in price, fixed coupon bonds fall. yields can of course only be compared based on purchase price because current yields as well as YTM of fixed coupon bonds go up when the price falls.

Ok actually I wanted to know what the yield curve looked like for floaters compared to fixed (the fixed is fairly easy to find)

If you have that data you can work out nominal interest rate expectations.

So floaters have a lower yield than fixed because interest rates are expected to go up rather than down. I simply wondered how much and when. I basically want to short bonds but I am faced with a very steep yield curve. So the longer I go out although I get more leverage it seems more and more likely that a rise in interest rates is discounted. Now a 10 year UST YTM doesnt really give you much clue as to what interest rates are because you dont know the premium placed on time. A 10 year floater should have the same time value so the difference in YTM should be the difference in expected interest rates.

[flying]

Oct 30 2009 An Interview with Stoneleigh - The case for Deflation

Stoneleigh: The green shoots are gangrenous. Some of the largest market rallies on record happened during the course of the Great Depression, as depressions are associated with very high volatility. Look for instance at the great sucker rally of 1930. There are always rallies of all different sizes in any bear market, just as there are pullbacks of all sizes in bull markets. No market ever moves in only one direction.

People tend to extrapolate recent trends forward, but this amounts to stepping on the gas while looking only in the rearview mirror. This is one reason why major trend changes are so rarely anticipated. Another is that the prevailing view of markets is fundamentally wrong. There is no perfect information, perfect competition, stabilizing negative feedback, rational utility maximization or efficient markets.

Markets are irrational, driven by swings of optimism and pessimism, or greed and fear, in an endless tug of war, and largely in an information vacuum. Investors chase momentum by jumping on passing bandwagons, hence demand for financial assets increases when prices are rising and falls when prices are falling, in classic positive feedback loops.

Edited October 31, 2009 by flying

[Naam]

1. that depends on the interest rate environment. with today's extremely low interest rates a bond with a fixed coupon (issued during a high interest rate phase) will have price gains which reduces its yield but this yield is still higher than the one of a floater. when interest move up the effect reverses. floaters gain in price, fixed coupon bonds fall. yields can of course only be compared based on purchase price because current yields as well as YTM of fixed coupon bonds go up when the price falls.

1. Ok actually I wanted to know what the yield curve looked like for floaters compared to fixed (the fixed is fairly easy to find) If you have that data you can work out nominal interest rate expectations.

2. So floaters have a lower yield than fixed because interest rates are expected to go up rather than down. I simply wondered how much and when.

3. I basically want to short bonds but I am faced with a very steep yield curve. So the longer I go out although I get more leverage it seems more and more likely that a rise in interest rates is discounted. Now a 10 year UST YTM doesnt really give you much clue as to what interest rates are because you dont know the premium placed on time. A 10 year floater should have the same time value so the difference in YTM should be the difference in expected interest rates.

1. it is not possible to determine a yield curve for the floaters i am dealing with because most of them will float based on a formula such as from 31-dec-20xx interest is paid 4*(10Y Euribor - 2Y Euribor) i.e. float starts after a certain period of paying fixed coupons.

2. no, floaters have a lower yield because their coupons are based on and continously adjusted according to prevailing interest rates. simple floaters are mostly based on 3/6M Libor or 3/6M Euribor plus x-bps. in rare cases your assumption might apply as the expectation of higher interest rates drives up prices and therefore generates lower yields.

3. shorting bonds is virtually impossible. banks will not find a counterpart for you unless the total value of the deal is in the range of 10 to even 20 million. even then it might take too long to arrange and prices have most likely moved.

addendum on shorting bonds: you might be able to short certain bonds indirectly and without delay by means of buying CDSs.

Edited October 31, 2009 by Naam

[Abrak]

3. shorting bonds is virtually impossible. banks will not find a counterpart for you unless the total value of the deal is in the range of 10 to even 20 million. even then it might take too long to arrange and prices have most likely moved.

addendum on shorting bonds: you might be able to short certain bonds indirectly and without delay by means of buying CDSs.

Actually there are some ETFs such as TBT. (I dont really ever properly short anything just buy funds geared to shorting.)

Is there a derivative you know of that shows nominal interest rate expectations over time? (bearing in mind that I dont think 10 year UST yields tell you much about nominal interest rates.)?

Is shorting bonds unusual or just only worthwhile in large size?

You might be interested in them if you wish to bet on risk but dont want to make an interest rate bet.

Edited October 31, 2009 by Abrak

[Naam]

3. shorting bonds is virtually impossible. banks will not find a counterpart for you unless the total value of the deal is in the range of 10 to even 20 million. even then it might take too long to arrange and prices have most likely moved.

addendum on shorting bonds: you might be able to short certain bonds indirectly and without delay by means of buying CDSs.

1. Actually there are some ETFs such as TBT. (I dont really ever properly short anything just buy funds geared to shorting.)

2. Is there a derivative you know of that shows nominal interest rate expectations over time? (bearing in mind that I dont think 10 year UST yields tell you much about nominal interest rates.)?

3. Is shorting bonds unusual or just only worthwhile in large size?

4. You might be interested in them if you wish to bet on risk but dont want to make an interest rate bet.

1. TBT shorting what? UST? i never touch shares, i never touch funds and i don't like shorting except currencies.

2. only voodoo practioners believe in that

3. direct shorting VERY unusual. shorting (sort of, kinda) via CDS or even share is quite common. but i don't consider that "real" shorting".

4. actually i am making an interest rate bet with a part of my bond holdings which pay for a few years fixed coupons and float later because i expect deflation for a few years and then inflation. also, i am a bit tired after exactly 20 years of investing rat race which i started when i retired in 1989. looking back i am asking myself today why i wasted those precious years of my life making money (which is of no use to me when they take me to the crematorium) instead of enjoying the time

[Abrak]

1. Actually there are some ETFs such as TBT. (I dont really ever properly short anything just buy funds geared to shorting.)

ProShares UltraShort 20+ Year Treasury seeks daily investment results, before fees and expenses and interest income earned on cash and financial instruments, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Barclays Capital 20+ Year U.S. Treasury Index.

I mean it is a bit tough to call these shares. I mean subordinated debt would seem more like equity than than this (dont ask me to justify that comment). (Its expense ratio is 0.95% so not in the excessive range.) I do realize that going long something that is short is hardly really shorting but it sort of sounds good that way. (And I dont like shorting either which is why I would go through this route.) There is also PST which is the same but 7-10 year UST life (this one has the advantage of being launched by Lehman's - but recently they seem to be having a problem picking up the phone.). You could also play the yield curve with a constant maturity swap. CMS makes you money if you chose a CMS long 3 month, short 5 years (one is floating and the other fixed) although I have a feeling these sort of things should be left to the professions. I wouldnt actually but one but I would like to see the pricing if anyone knows where it can be found.)

Anyway why I said they might be useful to you is because much of an investment in Sub debt is based on the fact that the risk premium relative to USTs will fall. You might feel it would fall but interest rates would go up. Hence the suggestion.

4. actually i am making an interest rate bet with a part of my bond holdings which pay for a few years fixed coupons and float later because i expect deflation for a few years and then inflation. also, i am a bit tired after exactly 20 years of investing rat race which i started when i retired in 1989. looking back i am asking myself today why i wasted those precious years of my life making money (which is of no use to me when they take me to the crematorium) instead of enjoying the time

If you gave your money to me I think it would give your life meaning. And luckily I find making money for myself (and especially for others) highly enjoyable and much more fun than trying to improve my golf handicap.

Edited November 1, 2009 by Abrak

[churchill]

With the Thai Baht probably rising over the next year - I see falling property /land prices in Thailand - Deflation .

IMF chief predicts stronger Asian currencies

http://www.monstersandcritics.com/news/bus...sian-currencies

[Naam]

With the Thai Baht probably rising over the next year - I see falling property /land prices in Thailand - Deflation .

IMF chief predicts stronger Asian currencies

Strauss-Kahn mentioned asian currencies rising vs. US-Dollar. property in Thailand is not only bought by those who hold Dollars.

[up-country_sinclair]

This thread is about two years old, but I was wondering if there are any current thoughts on this topic.

IMHO, the populist policies the current government all but ensure an inflationary environment. However, I'm interested to hear the opinions of others.