Overseas Markets? (11/16/2008)

just saw on cnn that japan announced they where in a recession. just wondering how this would fare on there stock market(if its open yet) and what affect we may see on other markets tomorrow?

Dont matter to me, gas and groceries and utilities where I live are back to the 1990's prices, and that works for me.

In fact all these commdities have been going down and down in price over the last couple of months.

I think that what would probably be affected would be futures investments more than anything else.

Cheers!!!!

reply to post by RFBurns


The US dollar has been increasing in value due to its world reserve status as funds liquidate their derivative investments and allocate to US Treasury Bonds. When the stock markets turn higher, and the money flows reverse out of the bonds, expect inflation and therefore the cost of everyday items to skyrocket.

Buy extra supplies now, as the apparent deflation will convert to inflation within a few months. If you have spare money buy gold bullion or gold shares (not ETF's).

[edit on 17-11-2008 by Nineteen]

Originally posted by RFBurns
Dont matter to me, gas and groceries and utilities where I live are back to the 1990's prices, and that works for me.

In fact all these commdities have been going down and down in price over the last couple of months.

I think that what would probably be affected would be futures investments more than anything else.

Cheers!!!!

RF, our gas has gone down as well, but our food is still very high?...........Looks like you got a better deal....I very much see that we in America will be affected by this in some way. We as a would now are connected financially in some way or the other.

Originally posted by RFBurns
Dont matter to me, gas and groceries and utilities where I live are back to the 1990's prices, and that works for me.

In fact all these commdities have been going down and down in price over the last couple of months.

I'd love to view that with the same doe-eyes you seem to see it with, but I can't. Where some people see the historically unprecidented rapid raise in gas/oil prices at the beginning of the year immediately followed by an unprecidented drop in gas/oil prices over the past 3 months as being an indication that "at least gas prices are back to the 90's levels" optimism, I see nothing but volitillity. Volitillity is very, very bad. Just like gas prices have dropped over $2 a gallon in a matter of a few months time, they could shoot up by who knows how much over an equal span of time in the not so distant future.

Originally posted by RFBurns
Dont matter to me, gas and groceries and utilities where I live are back to the 1990's prices, and that works for me.

In fact all these commdities have been going down and down in price over the last couple of months.

Have you ever heard the word deflation?

Any rapid changes in the value of currency are bad signs. Prices drop, output is decreased (resulting in higher unemployment), the perceived value of money increases, debt becomes more expensive to service, defaults increase, consumer spending is further tightened...
If the cycle continues, an economy enters a deflationary spiral.

The precipitous drop in some commodities in recent months isn't something to celebrate in relation to the broader economic picture. Yes, we're enjoying cheaper gas prices, but we don't want to be enjoying them as an aspect of deflation.

The Fed will reflate the economy - there is no way they will allow deflation to triumph. The printing presses will be very busy making nice new dollar notes so expect inflation soon.

While dropping prices may give you the warm and fuzzy, and pry a few more dollars out of your pocket in the upcoming holiday season, don't go too nuts . . . you won't much like what's just around the corner.

Here's some information and links on 'deflation' and what it might mean for you.

Deflation is the opposite of inflation. Therefore, under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level.[1] Alternatively, the term was used by the classical economists to refer to a decrease in the money supply and credit; some economists, including many Austrian school economists, still use the word in this sense. The two meanings are closely related, since a decrease in the money supply is likely to cause a decrease in the price level.

All kinds of information . . .

A brief explanation

Interesting article from March 2008 . . .

Originally posted by Nineteen
The Fed will reflate the economy - there is no way they will allow deflation to triumph. The printing presses will be very busy making nice new dollar notes so expect inflation soon.

That's what the Fed is trying to do right now. Notice the rate cuts?

Unfortunately it's like peeing on a forest fire.

Deflation is a natural occurrence in the macroeconomic cycle, same way inflation is. Once it reaches a point, no amount of 'printing' will halt it. It can be slowed down, but the only way for deflation to truly reverse is the return of the consumer.

If the Fed tries too hard, when the cycle completes, we find ourselves in a situation where we're inflating too much, too fast. That's where I fear we are - we've got deflation and it's going to work itself through the system now. We reached the event horizon. Once the deflationary period works itself out, we're going to emerge with a much larger monetary base that will stimulate heavy inflation.