Is All The Talk About Imminent Hyper-Inflation Bogus?
Think about this....
Somewhere between fall of 2007 and March 2009 about $64,000,000,000,000 (trillion) disappeared from the US economy.
That was real money to the extent that the US Dollar can still buy food, shelter, clothing, energy etc.
It was not just "paper profits". Ask those in their 50's, 60's and 70's who had to come out of retirement to survive because their retirement wealth was robbed.
Ask those who shorted (sold) real estate, equities and commodities and made very big, real profits.
So now everyone is running around fretting about the coming hyper-inflation because the FED is printing just billions -- maybe a few trillion dollars.
The economy is sluggish in spots because there is a shortage of Dollars on the street pursuing goods.
Where were all of these clairvoyants (the hyper-inflation truthers) in the fall of 2007?
I don't have all of the answers, but I have eyes. And my eyes see business as usual in many regions, without major distortions in prices (except for gold which I believe is a psychological rally - I didn't say it wasn't real) for consumer goods and services.
Think climate change... as we witness one of the coldest winters on record with snow reaching into southern regions where it doesn't snow. That's what I'm talking about. Brainwashing..
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UPDATE:
I didn't know we had so many economic scholars on DP
Seriously. I mean it. The replies are so grounded in sound economic theory.
I guess what I'm struggling with is something like a breakthrough in economic theory.
In physics a breakthrough is defined as a discontinuous result. There is a leap in performance rather than an incremental change or progression along a linear plane.
The other thing about breakthroughs, which I believe is the most confounding, is that nobody knows what the breakthrough will look like until after it happens because they have no context in which to hold the breakthrough. They've never seen or experienced it.
The other inseperable thing about breakthrough is BREAKDOWN.
Breakdown always precedes a breakthough. Just ask a caterpillar how that whole thing went before becoming a butterfly. Its part of the process.
And we certainly have a LOT of breakdown going on right now.
When Obama says we need to "spend" our way out
Does he really mean he wants us to get in more debt?
Banks make the vast majority of their money off of their credit products, next, I believe, off of overdraft charges (which is another form of lending credit...for a quick fee).
And since the banks are in cohoots with the US government, I'd think the US government would want us to stay in debt.
The more debt we are in the higher the productivity...and productivity, my friends, is another word for profit...profit for those that invest in the US labor force.
You may think that productivity is measured by the more work output per hour, but to investors of large scale plantations, productivity increases:
-the less we get compensated compared to the cost of living
-the more free overtime we work
-the more convinient it is for us to work harder and longer (that's why we have such good roads, so many fast (addictive) food joints, etc)
This is all about productivity for them.
That said, it is actually quite easy to have a very nice life in the USA...IF YOU KEEP YOUR FINANCES IN ORDER. The average household income is quite nice. The problem is that most of us live beyond our means.
Which brings me back to the whole Obama saying we need to spend our way out. That really ticks me off. This recession is a great opportunity for many to learn our lesson...and Obama is really irresponsible for saying that.
Crash
The recent runup in equities is something of a "carry trade". The banks swapped their devalued CDO and MBS assets for US Treasuries and 0.0% loans. This strengthened the bankster balance sheets and credit worthiness. They used improved balance sheets to leverage up again, albeit this time by speculating in stocks. That's why 80% of Goldman's income is from speculation and not from lending (which is their core business).
ANY attempt by the Fed to raise rates and reign in inflation will do 2 things:
1) Crash the stock market as rising rates will explode the bankster carry trade.
2) Bankrupt the government as the US debt is essentially financed with a FIVE YEAR ARM!
I really cannot find a scenario where we don't have a multi year bout of no growth and 10-20% inflation rates.
Republicae? Any comment? Will gold crash along with it or will gold be seen as a safe haven as rising yields wipe out Treasuries.
Warbucks? Any comment?
http://goldsteinrepublic.com
http://goldsteinrepublic.com
3
3) Make new home loans unaffordable, thus putting further pressure to the downside on housing prices. Same goes for cars and anything else people take loans to buy.
http://FlipFlopRomney.blogspot.com
Vanilla Gorilla, As a forensic trader I only watch buy/sell
pressure. Not connections between different markets or volume.
As I forecasted back in Oct, the Dollar Dow relationship is going to end and both will go verticle.
I expect US equities to surpass 2007 highs and then another smack down will ensue.
And yes the fortunes that were made by syndicate (manipulators) traders between Sep 2007 and Mar 09 are the same profits that came in hard to buy at the bottom in March.
I use technology that filters out all the propaganda, emotion and foolish rules of trading. It's based on the maneuvers used by syndicate traders.
You can find it here http://www.tradeguider.com/
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only
When the price of stocks
When the price of stocks decrease, is that akin to the destruction of actual money? I don't believe it is.
After a buyer purchases stock, where is the money? The seller has it. After each transaction the seller walks away with the money and the buyer walks away with the stock. Regardless of what the seller does with the money, that money will continue to exist in the system no matter what happens to the stock (even if the stock drops to zero).
By following the money we can see that nothing happens to it when the price of stock decreases (or even if it increases). The price of a stock is simply its value denominated in dollars, but it is not physically equivalent to those dollars.
So, in my view, that $64 trillion dollar loss in the markets is a loss of perceived value and not a loss of actual currency from the money supply.
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Take the long view
What used to be a nickle is now two bucks. That's some serious inflation. How far will it go and how quickly is the big question.
Explore Orthodox Christianity
Right on, folks are getting too caught up in instant gratificati
n. Gold and Silver and other commodities aren't about getting rich for me, they are about keeping what I got.
An example to back up the point of looking at the long term. Anyone know the percentage of inflation on a dime since 1964?
over a thousand percent. Same for the others. Folks, you got to think more than a month or two out. You aren't preparing so much for tomorrow or next week, but the next year and ten years.
"What was taken from the boomers, it ain't there, what was taken from the X'ers it ain't there, what is being taken from their great, great, great squared grandchildren it ain't there. Some generation just has to have the guts to quit passing it on." Me
*May the only ones to touch your junk, be the ones you want to touch your junk.*
Exactly.
"I believe the true significance of the Gold Commission is that the politicians and central bankers were so alarmed at such a thing that they made sure it was packed by an array of Keynesians and monetarists." (Ron Paul 1985)
What happens to gold if the
What happens to gold if the debt ceiling gets raised?
"The revolutionary forces have to take civil society before they take the state, and therefore have to build a coalition of oppositional groups united under a hegemonic banner which usurps the dominant or prevailing hegemony." -Strinati, Dominic.
"We must re-take the Republican Party"-Ron Paul. http://www.youtube.com/watch?v=NlqXq8YxQFQ
I would assume the price in
I would assume the price in dollars would increase. More spending equals more borrowing and printing and thus a weaker dollar.
I hate to interupt the
I hate to interupt the brilliant posts but if the shtf, if it gets as bad as it can get what happens to the guy with say 20,ooo in gold.? How long could that last?
"The revolutionary forces have to take civil society before they take the state, and therefore have to build a coalition of oppositional groups united under a hegemonic banner which usurps the dominant or prevailing hegemony." -Strinati, Dominic.
"We must re-take the Republican Party"-Ron Paul. http://www.youtube.com/watch?v=NlqXq8YxQFQ
That totally depends on the
That totally depends on the nature of the collapse, in the case of a total societal collapse due to a failed monetary system then the fiat price of gold no longer holds a correlation to value. If there is a hyper-inflationary event then the fiat value of gold would be enormous and the trade value would also be substantial since the whole imputation of value would be skewed upward by hyper-inflation.
http://www.1776solution.blogspot.com
"Rags make Paper; Paper makes Money; Money makes Banks; Banks make Loans; Loans make Beggars; Beggars make Rags"
http://militantjeffersonian.com
"Men do not willingly read unpalatable truths of themselves. The People like those best who fool them most, by pandering to their vices and flattering their foibles" Raphael Semmes
Republicae, I understand
that the fiat price of gold would no longer hold a correlation to value in the case of hyperinflation. But how would this affect the trade value of gold and silver? So, are you saying that unlike the price of silver and gold holding their value over decades like it has (manipulation notwithstanding), it would be different in the case of hyperinflation? And thanks for stopping by the dp. You add a lot to it.
your welcome
"The revolutionary forces have to take civil society before they take the state, and therefore have to build a coalition of oppositional groups united under a hegemonic banner which usurps the dominant or prevailing hegemony." -Strinati, Dominic.
"We must re-take the Republican Party"-Ron Paul. http://www.youtube.com/watch?v=NlqXq8YxQFQ
It would be a very different
It would be a very different case during a hyper-inflationary event and even more under a complete collapse. The differences would be in terms of pricing structures that would evolve during a hyper-inflationary episode since the normal imputation of value would no longer be realistic in terms of fiat money.
The idea that one might hold $20,000.00 of gold today in fiat terms becomes meaningless, for it is not the fiat valuation that is meaningful during a hyper-inflationary event, but the weight of the gold and silver in your possession that then will hold meaning in terms of evolving exchange value in an hyper-inflationary economy. That's why I advise people not to look at gold or silver in terms of fiat investment, but as a platform of exchange during economic, in particular, hyper-inflationary dislocation.
All faith in both government and the fiat currency it issues is completely lost and the connections between the government, money and economy are also swept away by the hyper-inflationary reality. Future conditions become totally unpredictable, expectations uncertain, crushed under the weight of a constantly shifting reality as time-lines for decision-making is drastically shortened, sometimes to be measured in hours, even minutes.
For instance, in Weimar Germany, the imputation of value on commodities became completely unrealistic in fiat monetary terms, there was simply no comparative basis of value on which to base trade, thus values became relative to the needs of the individual. During that period in Germany the mechanics of economic calculation were transformed into extreme, the division of labor could no longer operate within what could be considered normal or realistic, but become absurd in both function and scope. Drastic and constant re-valuation of the fiat currency during such periods provides absolutely no possible foundation for a real imputation of value.
Of course, during the first glimpses of a hyper-inflationary event, the government will seek to impose controls, price and wage controls that will lead to a further break-down of the division of labor which will lead to rapidly spreading shortages. One of the first signs that hyper-inflation is occurring is when people no longer wish to hold their fiat currency, spending it as soon as they get it in their hands for fear that if they hold it for a given period of time then it will be stripped of exchange value. People attempt to trade their fiat money at that point for anything they might consider as a hard asset, even if they don't necessarily need the item they are purchasing.
A point is reached when the fiat currency value is devalued hour by hour. Another very interesting fact is that during a hyper-inflationary event is that fiat money virtually disappears from circulation. This is not simply a case of monetary contraction, but the usage of the currency is not considered either beneficial or needed since all imputation of value is nullified by the economic reality of hyper-inflation.
People's lives become very precarious, their existence becomes connected to time and indeed, their lives become a product of time, always scrambling to meet their needs at a rate faster than the rate of decline of the fiat currency available to them at any given time during the hyper-inflationary event.
http://www.1776solution.blogspot.com
"Rags make Paper; Paper makes Money; Money makes Banks; Banks make Loans; Loans make Beggars; Beggars make Rags"
http://militantjeffersonian.com
"Men do not willingly read unpalatable truths of themselves. The People like those best who fool them most, by pandering to their vices and flattering their foibles" Raphael Semmes
when wealthy men in New York were jumping off . . .
it's hard to be awake; it's easier to dream--
of buildings and leaving their families destitute--
my grandparents who had a small farm . . .
ate well, were warm and went on with their lives. They struggled with FDR's agricultural policies--
but they didn't lose their farm, and life went on.
They had a large garden, they kept some crops going, but mostly to feed themselves and their neighbors--
and they kept their animals well-fed and in 'use' (the cows continued to be milked)--
since my grandparents were NOT hooked up to the grid and heated their home with wood . . .
they were scarcely aware that a depression was 'on'--
I know that can't happen to most people now, but . . .
to ME this is 'economy'--
I wish I could go back. They are long gone. Their 'place' was paradise to me.
it's hard to be awake; it's easier to dream--
Sadly, many farmers did not fare well,
as government agents forcibly destroyed crops and livestock to prop up falling prices.
I'd be on a farm if that option opens for me, but it is by no means a sure safe haven.
oh, yes, I'm aware of that. As I said in my original reply . .
it's hard to be awake; it's easier to dream--
my grandparents had to deal with the stupidity of FDR's 'regime'--and they did have some livestock forcibly slaughtered.
But they were fed and warm and together.
My grandmother fed countless 'hoboes' during that time--
cautiously . . . they had to work (usually splitting wood) for their food, and they ate out by the woodpile.
it's hard to be awake; it's easier to dream--
Go forward
Today we have so much more agricultural knowledge plus the lessons of the past.
That is my strategy. Unhook from the system, live independently.
There are tons of farms for sale out there and prices are very negotiable.
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only
As individuals, we have much LESS agricultural knowledge!
Before and during the depression almost every family had a garden and knew how to plant and harvest.
What I am seeing now is that the younger generation, while interested in gardening again, struggle with it.
We have a whole generation that has never seen a cow milked, in fact, think that milk comes from the grocery store.
It would not be good for a newby to buy a farm and think they can pay a mortgage with what they raise. That is a recipe for disaster!
It is one thing to have a piece of land large enough to raise a garden and a milk cow or goats and chickens for eggs with the land free and clear. Even then, many folks would have quite a learning curve.
this is true . . .
it's hard to be awake; it's easier to dream--
the knowledge has been lost to many, and getting it back takes a lot of time and work--
backbreaking work . . .
it's hard to be awake; it's easier to dream--
There's ALWAYS a way to get what you need. i.e. Labor
Ask any farmer if he has trouble getting help. You may not know much about farming but if you're willing to work for a farmer and learn you can deal for food and learn in the process.
All across America farms are being sold because they can't get or afford help.
And many are being sold because farmers are too old to continue.
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only
I know this, Daddy WB. You say
"All across America farms are being sold because they can't get or afford help. And many are being sold because farmers are too old to continue."
I retired from ranching---and it is tough making ends meet on a farm or ranch. The kids can't afford to buy the places, and in my area most of the ranches are being sold to rich people who don't need to make it work and don't care.
I have a great concern that there will be famine in the land. We are importing so much of our food supply from countries that hate us, and our farms and ranches are being put out of business by the global Ag conglomerates such as Monsanto, Cargill, Tyson, ADM, etc.
You have it right that we all need to work to be self sufficient. To be able to feed our families and have shelter.
E. Oregon 4 Ron, Let's start a movement so when the hungy
come lookin' we'll be ready to put 'em to work.
You could be an expert consultant. No heavy lifting.
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only
Many of the depression stories tell of
giving the hobos a job to earn a meal, usually chopping wood. It bothers me to think that the attitude of the homeless in this day and age is to expect a handout--they have no thought that they should work for it!
I hope those of us in this movement will educate themselves on the basics so they are able to feed their own families and help others to do the same.
Great distinction
".....attitude of the homeless in this day and age is to expect a handout--they have no thought that they should work for it!"
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only
Unhooking from the system
Unhooking from the system and living independently sounds great to me. I hope to do something similar in the future when I'm financially able to.
...
a very good idea, and I applaud it--
it's hard to be awake; it's easier to dream--
unfortunately, we are presently living . . . 'hand to mouth'--
FORTUNATELY, we purchased quite a lot of high quality 'equipment' for simple living (or sustainable living) when we had much more--
and we are falling back on that now.
I work at home and keep the house heated--
it's time to put another log on the fire; it's cold where I live--
:)
I hope you can achieve your dream/strategy. I hope as many people as possible can!
it's hard to be awake; it's easier to dream--
they also 'traded' with neighbors--
it's hard to be awake; it's easier to dream--
labor and commodities.
When 'push' comes to shove . . .
if there is no food, it won't matter how much gold or other assets a person has.
Will it?
it's hard to be awake; it's easier to dream--
I didn't know we had so many economic scholars on DP
Seriously. I mean it. The replies are so grounded in sound economic theory.
I guess what I'm struggling with is something like a breakthrough in economic theory.
In physics a breakthrough is defined as a discontinuous result. There is a leap in performance rather than an incremental change or progression along a linear plane.
The other thing about breakthroughs, which I believe is the most confounding, is that nobody knows what the breakthrough will look like until after it happens because they have no context in which to hold the breakthrough. They've never seen or experienced it.
The besy analogies I've heard are;
1. The butterfly. The butterfly knows nothing about flying in its former state as a caterpillar. It knows nothing of what to expect, how it will get from crawling to flying. It can only look back at the chrysallis and see that it went through an unusal process to get to a level of function that seems totally irrelevant to the process of getting wraped-up, dissolved into a liquid state, and finally breaking out of it's enclosure and suddenly being able to fly with no previous training or background of reality to work from.
2. Heavier than air flight.
3. Photography. If you could find a village of people who had never seen a camera or a photo or a mirror and showed them a picture of themselves, they wouldn't see a face. They would only see a bunch of dots, different shades of light and dark until they developed the context for photgraphy. We take it for granted.
I don't have time to finish but I'll leave it at this.
I think we are seeing something that will defy what we've learned and know from the past. I don't know if the outcome will be good or bad. I think it will be bad just like most on this thread. But I DON'T KNOW.
And I assert that most people only think they know... but walk around believing what they know is gospel when it ain't.
STOP!
Put a note and a few bucks in an envelope for Sherry Jackson--
Colin Jackson
1560 Fieldgreen Overlook
Stone Mountain, GA 30088
"GINO" = Government In Name Only