[(former)FormerSanDiegan]

I don’t disagree with your conclusions.

I disagree with the statement that an 80% gain is actually a loss because it grew slower than an alternative investment in commodities.

The use of commodities as a true measure of constant value is an attractive concept, especially over the long run (e.g. 50 years or more). The problem is that commodity prices are volatile, have very long cycles (e.g. 20 years) and can create a distorted view of inherent value specifically because of the factor you describe as “liquidity flowing to historically safe havens.”

[(former)FormerSanDiegan]

I don’t disagree with your conclusions.

I disagree with the statement that an 80% gain is actually a loss because it grew slower than an alternative investment in commodities.

The use of commodities as a true measure of constant value is an attractive concept, especially over the long run (e.g. 50 years or more). The problem is that commodity prices are volatile, have very long cycles (e.g. 20 years) and can create a distorted view of inherent value specifically because of the factor you describe as “liquidity flowing to historically safe havens.”

[(former)FormerSanDiegan]

Yes, monetary inflation begets price inflation.

You missed my point. A x% increase in monetary inflation does not necessarily lead to x% increase in prices. Sometimes markets take that money supply and erase it from the planet. How many billions of dollars have been subtracted from the economy from falling house prices. How many trillions were subtracted from the economy during the dot-com bust.

In a steady-state, closed-cycle, perfectly efficient model monetary inflation translates 1:1 to price inflation. However, the real world is dynamic, not closed and not perfectly efficient.

That’s Economics 201.

[(former)FormerSanDiegan]

Yes, monetary inflation begets price inflation.

You missed my point. A x% increase in monetary inflation does not necessarily lead to x% increase in prices. Sometimes markets take that money supply and erase it from the planet. How many billions of dollars have been subtracted from the economy from falling house prices. How many trillions were subtracted from the economy during the dot-com bust.

In a steady-state, closed-cycle, perfectly efficient model monetary inflation translates 1:1 to price inflation. However, the real world is dynamic, not closed and not perfectly efficient.

That’s Economics 201.

[(former)FormerSanDiegan]

Yes, monetary inflation begets price inflation.

You missed my point. A x% increase in monetary inflation does not necessarily lead to x% increase in prices. Sometimes markets take that money supply and erase it from the planet. How many billions of dollars have been subtracted from the economy from falling house prices. How many trillions were subtracted from the economy during the dot-com bust.

In a steady-state, closed-cycle, perfectly efficient model monetary inflation translates 1:1 to price inflation. However, the real world is dynamic, not closed and not perfectly efficient.

That’s Economics 201.

[(former)FormerSanDiegan]

Yes, monetary inflation begets price inflation.

You missed my point. A x% increase in monetary inflation does not necessarily lead to x% increase in prices. Sometimes markets take that money supply and erase it from the planet. How many billions of dollars have been subtracted from the economy from falling house prices. How many trillions were subtracted from the economy during the dot-com bust.

In a steady-state, closed-cycle, perfectly efficient model monetary inflation translates 1:1 to price inflation. However, the real world is dynamic, not closed and not perfectly efficient.

That’s Economics 201.

[(former)FormerSanDiegan]

Yes, monetary inflation begets price inflation.

You missed my point. A x% increase in monetary inflation does not necessarily lead to x% increase in prices. Sometimes markets take that money supply and erase it from the planet. How many billions of dollars have been subtracted from the economy from falling house prices. How many trillions were subtracted from the economy during the dot-com bust.

In a steady-state, closed-cycle, perfectly efficient model monetary inflation translates 1:1 to price inflation. However, the real world is dynamic, not closed and not perfectly efficient.

That’s Economics 201.

[(former)FormerSanDiegan]

If the gains were less than the real rate of inflation, it sure does!

Given that the money supply doubled during the time frame of your supposed ‘rally’, anything less than something on the order of 100% is negative in real terms.

Now I see the problem. You are equating monetary inflation (increase in money supply) with general inflation (increase in the cost of goods and services).

While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.

[(former)FormerSanDiegan]

If the gains were less than the real rate of inflation, it sure does!

Given that the money supply doubled during the time frame of your supposed ‘rally’, anything less than something on the order of 100% is negative in real terms.

Now I see the problem. You are equating monetary inflation (increase in money supply) with general inflation (increase in the cost of goods and services).

While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.

[(former)FormerSanDiegan]

If the gains were less than the real rate of inflation, it sure does!

Given that the money supply doubled during the time frame of your supposed ‘rally’, anything less than something on the order of 100% is negative in real terms.

Now I see the problem. You are equating monetary inflation (increase in money supply) with general inflation (increase in the cost of goods and services).

While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.

[(former)FormerSanDiegan]

If the gains were less than the real rate of inflation, it sure does!

Given that the money supply doubled during the time frame of your supposed ‘rally’, anything less than something on the order of 100% is negative in real terms.

Now I see the problem. You are equating monetary inflation (increase in money supply) with general inflation (increase in the cost of goods and services).

While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.

[(former)FormerSanDiegan]

If the gains were less than the real rate of inflation, it sure does!

Given that the money supply doubled during the time frame of your supposed ‘rally’, anything less than something on the order of 100% is negative in real terms.

Now I see the problem. You are equating monetary inflation (increase in money supply) with general inflation (increase in the cost of goods and services).

While the two are highly correlated and monetary inflation is typically the primary cause of price inflation, a change in monetary inflation (dx) does not immediately nor exactly manifest themselves in precisely the same change (dy) in general price inflation.

[(former)FormerSanDiegan]

I did not claim that anyone missed out on an 80% rally.

I merely claimed that it existed and you challenged that fact.

Sure some folks made more in oil futures than stocks. However, that does not mean the the value that others made in stocks was negative.

[(former)FormerSanDiegan]

I did not claim that anyone missed out on an 80% rally.

I merely claimed that it existed and you challenged that fact.

Sure some folks made more in oil futures than stocks. However, that does not mean the the value that others made in stocks was negative.

[(former)FormerSanDiegan]

I did not claim that anyone missed out on an 80% rally.

I merely claimed that it existed and you challenged that fact.

Sure some folks made more in oil futures than stocks. However, that does not mean the the value that others made in stocks was negative.

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