Is this a surprise? I don't know about the Tel Aviv market, but the American markets have been over priced for over a year. Last year I went all cash except for gold and a small number of bonds. I have waited for the 2011 "correction" and now it's come. When Tobin's Q falls below 0.7, I will become interested in stocks again.
Over all I'm not long term bullish on markets. I think we will see the U.S. dollar fall from reserve currency status. Eventually we will abandon fiat money. Meanwhile the politicians will continue to borrow until we hit a dollar crisis as happened in Canada in 1994. The American people want all that social spending, especially the half that does not pay taxes, but they don't want to pay for it. So we borrow both in the private and public arena-- Ponzi finance.
Such is the nature of human beings. They need a good smacking every once in a while to come to their senses. Otherwise they don't care until the credit card no longer works. Next stop QE3? When a government can't sell its bonds, then the central bank will come in an buy them with printed money. You see this in Europe right now.
Krugman thinks that the U.S. and Europe are in such deep deflationary holes that much money printing and deficit spending are needed to stimulate the economies so they operate closer to capacity.
Krugman and the other Keynesians don't give us the internal maximum. How much money printing can Central Banks do before something goes wrong? If money printing is never inflationary then we need not collect taxes, or even go to work. Not even Krugman believes this.
Krugman is smoking crack rock. If you look at consumer prices for anything from bread to comic books in the last 50 years, you can see them climb across the board-how can we be in a deflationary hole?
Tobin's q is inappropiate for a knowledge based economy like ours. The physical assets of a firm are the less important part in my opinion. As one Hungarian nuclear war strategist said, all the infrastructure of a country is worth about 10 years of GNP, and can be rebuilt in less time. Germany was destroyed and after ten years it was producing more than ever before. The "industrial area" of Raanana exports about 5 billion dollars a year, yet what is its q?
Tobin's q is inappropiate for a knowledge based economy like ours. The physical assets of a firm are the less important part in my opinion. As one Hungarian nuclear war strategist said, all the infrastructure of a country is worth about 10 years of GNP, and can be rebuilt in less time. Germany was destroyed and after ten years it was producing more than ever before. The "industrial area" of Raanana exports about 5 billion dollars a year, yet what is its q?
11 comments:
You can always go short.
Anon.
Too late.
Is this a surprise? I don't know about the Tel Aviv market, but the American markets have been over priced for over a year. Last year I went all cash except for gold and a small number of bonds. I have waited for the 2011 "correction" and now it's come. When Tobin's Q falls below 0.7, I will become interested in stocks again.
Over all I'm not long term bullish on markets. I think we will see the U.S. dollar fall from reserve currency status. Eventually we will abandon fiat money. Meanwhile the politicians will continue to borrow until we hit a dollar crisis as happened in Canada in 1994. The American people want all that social spending, especially the half that does not pay taxes, but they don't want to pay for it. So we borrow both in the private and public arena-- Ponzi finance.
Such is the nature of human beings. They need a good smacking every once in a while to come to their senses. Otherwise they don't care until the credit card no longer works. Next stop QE3? When a government can't sell its bonds, then the central bank will come in an buy them with printed money. You see this in Europe right now.
It is starting to happen in Europe. Krugman says it does not cause inflation.
It is starting to happen in Europe. Krugman says it does not cause inflation.
Krugman thinks that the U.S. and Europe are in such deep deflationary holes that much money printing and deficit spending are needed to stimulate the economies so they operate closer to capacity.
Krugman and the other Keynesians don't give us the internal maximum. How much money printing can Central Banks do before something goes wrong? If money printing is never inflationary then we need not collect taxes, or even go to work. Not even Krugman believes this.
This is, after all, the Oponzi Administration.
Anon.
Krugman is smoking crack rock. If you look at consumer prices for anything from bread to comic books in the last 50 years, you can see them climb across the board-how can we be in a deflationary hole?
Tobin's q is inappropiate for a knowledge based economy like ours. The physical assets of a firm are the less important part in my opinion. As one Hungarian nuclear war strategist said, all the infrastructure of a country is worth about 10 years of GNP, and can be rebuilt in less time. Germany was destroyed and after ten years it was producing more than ever before. The "industrial area" of Raanana exports about 5 billion dollars a year, yet what is its q?
Tobin's q is inappropiate for a knowledge based economy like ours. The physical assets of a firm are the less important part in my opinion. As one Hungarian nuclear war strategist said, all the infrastructure of a country is worth about 10 years of GNP, and can be rebuilt in less time. Germany was destroyed and after ten years it was producing more than ever before. The "industrial area" of Raanana exports about 5 billion dollars a year, yet what is its q?
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