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bit north of London, UK | Deflation ( LIQUIDATION ?? ) of stuff we DONT really need.
Inflation of stuff we DO really need.
( Based on others talking sense eg try and pick holes in Chris Martensons' CRASH COURSE...), a little bit of intuition, maybe even a tiny bit of common sense )
re Deflation vs Liquidation vs Inflation
Used car lots across the West cannot give away premium / 4*4 (in particular) vechicles....LIQUIDATION.
New sales already fallen off a cliff.
Someday in the future this stock will have been shifted, and the last remaining carlot in town needs to reorder (a few) vehicles.
Labor to build these new cars will be cheaper in real terms than last year.
But raw materials used will likely be more expensive.
Manufacturers margin will be as much as necessary to keep plant running - no change on recent past.
Carlot / dealer margin will be lower than previously (competition and winding down of infastructure investment- there will be no new fantastic edifices of steel, glass and marble built to merchandise even Mercedes)
And then there are currency issues - is the dollar weak or strong.
And personal principals - you know a Merc is what you want (this is an example only!), but you are damned if, at this time, you are going to buy a foreign car..
The price of the Merc in two years time is hard to call - in real terms. But easy to see future sales will be a fraction of last years.
PS dont presume the dollar can be engineered to fall well below the euro / sterling. We are all in slightly different shades of the same poo. As far as i can see.
Land is easier. Inflation in spades as soon as the dust settles. The price of new credit also.
Soft commodities i see a bit/lot harder to call.
Land i think is easy because the reason farmers have been prepared to work for it - often for a real return below 1% - is that it is the ultimate, durable wealth sink. Long term.
Land will look very attractive to those mega rich who will soon have a flat, imploded stock market as a playground. And it will continue to look attractive to framers, as well as those with the means who now choose to drop out of the old society and go till a few acres.
Soft commodities will be driven by the usual supply / demand - BUT very possible that farmers are the new 'relatively wealthy' and gov support (direct / indirect / conservation / biofuel grant / whatever) is curtailed. Impact on production??
Dinner time. And time to shut up no doubt. | |
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Couple thoughts.
