American inflation progress goes off-script; US retail sales growth slows; Japanese machine tool orders fall; Aussie consumers brighter but businesses not; UST 10yr 4.29%; gold dumped, oil up; NZ$1 = 60.6 USc; TWI-5 = 70.3

Indeed. Inflation HFL. Possibility of rate cuts fade.

Wow. Surprised he called the truth a nakedly as that. And on camera to boot.

Hmmm....

A recent Bloomberg article described central bank easing with the phrase “pumpingd money into the economy.” That’s a misconception. Monetary easing is actually an asset swap. The public was holding savings in one form, and now it holds it in another. The Fed buys Treasury securities from the public, and replaces them with currency and bank reserveds (base money) that someone has to hold, at every point in time, until the Fed sells its bonds and retires the cash. All monetary policy does is  change the mix of government obligations held by the public. Only fiscal policy – specifically deficit spending – changes the total amount of those obligations. - courtesy of Hussman

There was prior evidence elsewhere that LSAP (QE) failed to generate sustained economic growth - it should have been noted and acted upon.

"Investors" have persistently over capitalised the rising discounted present value of cash flows associated with assets, financed by bank credit as interest rates fell.

Policy makers sometimes flatter themselves with the idea that holding interest rates at untenably low levels makes it cheaper for borrowers to obtain funds. Unfortunately, it does so only by transferring income from people who are trying to save for the future. Replacing Treasury securities with base money may make savings more “liquid,” but it doesn’t suddenly make people abandon their retirement plans in favor of consuming today. Low rates also don’t magically create productive investment opportunities.

What economic activities suddenly become viable at zero interest rates that were somehow not viable before? Only projects so unproductive that any positive hurdle rate would sink them. The main activities that are encouraged by zero interest rates are activities where interest is the primary cost of doing business: leveraged real estate transactions; “carry trades” that employ enormous amounts of leverage to profit from small yield differences; and speculation on margin. Presently, margin debt as a percentage of GDP is at a historic extreme. https://www.hussmanfunds.com/comment/mc210614/

The idea that “low interest rates justify high stock valuations” is really a statement that “low interest rates justify low expected stock returns as well.” Those high stock valuations are still associated with low prospective future stock market returns.

Worse, the notion that “low interest rates justify high stock valuations” assumes that the growth rate of future cash flows is held constant, at historically normal levels. If, as we presently observe, interest rates are low because growth rates are low, no valuation premium is “justified” by low interest rates at all.

Presently, the combination of record low interest rates and record high stock market valuations does nothing but add insult to injury.

...the iron law of investing is that a security is nothing but a claim on a future stream of cash flows. Valuation is a crucial determinant of long-term returns. The higher the price an investor pays for those cash flows today, the lower the long-term rate of return earned on the investment.. Hussman

The corollary is also true. The lower the long-term rate of return demanded by investors, the higher the price moves today. So clearly, changes in investors' attitudes toward risk will strongly affect short-term returns. If investors become more willing to take market risk, it is equivalent to saying that they are demanding a smaller risk premium on stocks (that is, a lower long-term rate of return). Prices rise as a result. Now, the fact that current stock prices are higher also implies that future long-term returns will be lower, but that's part of the deal. Courtesy of Hussman Funds

Not only believe it but pay huge interest on the "money" printed out of nothing... fkin madness... but it is one of the quickest and most efficient ways to steal productivity out of the productive without the host realising and to steal from the future generations/unborn NZers...

I haven't seen the clip or the total speech, and my question is was he really referring to Central banking or likening Bitcoin to it? The reason I ask is because it also looks like he is admitting that the public comms are essentially lies ("...and people believe it"). 

Out of context the snap shot looks bloody awful that will only harm public trust in officials. But some of the other comments point to what I feel is one of the significant issues in the economy and why parts are so far out of control; that the Government is not trying, or has not control on the amount of money in circulation or being created. Prior to de-regulation this was actively controlled and managed through the RBNZ by the Government, but now the private banks essentially seem to have no constraints.

Clever stuff indeed, the waste product and emissions from the burn-off are down-sides but a lot better than just letting it all rust!

“A real Kiwi favourite is your weatherboard bungalow with some nice updates and a good-sized section – that’s a first-home buyer classic.”

70 years plus with continuos maintainence and still well north of $1/2m.

I truly do not understand the celebration of this bollocks.

Cannot be true, meanwhile the DGM's are having a field day over the page with the big crash theory, or is that the big bang theory I forgot.

High rates?...aren't the current rates around the long term average?

We don't have high interest rates just normal.

Maybe these businesses have only been going a few years but cast your mind back to 2012 when we had 8% bonds like AIA080, ANBHA,  BISHA and many more when inflation was under 2%. Auckland airport is still going along with all the other businesses that were paying normal interset rates.

These stories are a good reminder for me to enjoy living my my debt-free 90 sqm box 

How do you see the black swan here Black Swan?  The Japan currency is strong due to good economic performance, dumping their treasuries is not ideal but economically they made hay when their sun shined and now they are weathering this period no?

"US 10-YR up 14 bps today....its on its way to 5%"

I think it will be much closer to being under 4% than over 5% this year

The corporate structure is a disaster, almost no economies of scale or shared services.  Once the legals are out of the way a PI Bank will come and take it apart.

Deflation is inevitable medium term. There just aren't enough consumers coming through to, err, consume. Places like NZ that have extreme growthist culists in charge, may maintain inflation for longer ,as we head for 100 million population, but most of the rest of the world is stuffed!