Sunday, December 18, 2016

Inflation expectations, down

Thzt inflation expectation y yh 208 crash, it happened two years after housing crashed. Kind of fouls up that theory that the housing crash caused the recession.

Economists ix two trends, we have a long term trend toward the helicopter even and a short term resources shortage. Look at either side of the crash peak, see expectations till volatile, the volatility spread symmetric. That ix because the pricing system is pricing to the long term trend, and that trend is down to negative inflation; until the helicopter.

What about all the debt money floating about? It is debt money, the only real losses the Fed produced were a few trillion or so at the Nixon shock. The rest is debt, and the pricing function forces amortization of the debt. Pricing appears compressible, that is what money does, imitate a fluid to a known error. So pricing expands up, then contracts down, forcing debt to amortize.

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