1 vote

No October Inflation, Just Don't Eat, Drive, Get Sick, or Pay for Education

No Inflation in October Unless You Eat, Drive, Get Sick, or Pay for Your Education
John Galt
[See graph at link]

Thankfully the hedonically adjusted fiction story released by the Bureau of Lying Statistics came in with a “gasp” indication of more disinflation which caused everyone on Bubblevision this morning to have a joint Fedgasm about how prescient Bernanke was to inflate more money into the system just to bail out the banksters. As long as you do or buy anything outside of eating, driving, getting medical care, or paying for your schooling, then there is no threat of inflation. Thank you Saint Benron for saving us!

http://www.silverbearcafe.com/private/11.10/inflation.html




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2008 was a deflationary

2008 was a deflationary crash. The stock prices deflated while the cost of living commodities skyrocketed. Of course, if the basic necessities of life get much more expensive, discretionary spending falls off a cliff. This causes people to stop buying things like flat screen TVs and other luxuries which causes more bankruptcies for certain companies and higher unemployment.

It all makes sense to me. We are still in a deflationary spiral. Have you gone to the mall lately? Buy one suit and get two free? That's not inflation. They are getting desperate to sell. How about the price of homes? People are not selling their homes what they paid for them a few years ago. That's not inflation.

Keynesians are trying everything they can to create inflation by printing money but they can't do it. It's not working.

Lybia is helping Oil prices

jump 9% in one day

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December looks worse than

December looks worse than October

fireant's picture

The problem is, Ben is not pumping money into the "system".

Not unless you consider big banks and the stock market "the system".
One of his stated goals is to keep the stock market up (so people "feel" good and spend). The banks are using liquidity to do so, are not lending, and Americans are not borrowing. The money is not getting into the system. The first quarter of 2011 should give us a better picture, and commodities will give us warning (they are weak right now). My message; be careful about leaning too far in the direction of inflation for the near term--it may not happen.

Undo what Wilson did

You do not need banks to put

You do not need banks to put liquidity into the system. The fed puts liquidity into the system by hiring government employees, welfare handouts, defense spending etc.. there is more then one way for the money printed out of thin air to get into the system.

fireant's picture

Spending originates in the "House"*

While you have a point, it is doubtful since the elections that the Fedguv will be able to spend enough to inflate an economy which is trying to contract.
Note that state and local governments have already begun layoffs and budget contractions, which will exacerbate unemployment. If the "fiscal conservatives" behave as the people are demanding, the Feds face the same lot; budget cuts and layoffs.
I think the key will be inflation numbers in Q1 2011. Bernanke, if he still has a job, may panic if inflation does not show up by then, and ramp up the presses even against international outcry. Lot's of unknowns in the immediate future...

*The House of Representatives will never function as it's true intent, where the power of the People resides, until the bogus 17th Ammendment is up-ended.

Undo what Wilson did

ant, there are 2 types of

ant,
there are 2 types of inflation. The type of inflation we are going to get is they type where the fed gov. has to print money to pay its bills. They will destroy the currency. As Federal tax receipts fall of drastically because of, as you say, a contracting economy, they will print the money to pay their bills. Not only that you will have drastically higher interest rates as capital flees the US. Can You imaging the amount of interest on the debt when the interest payment on the debt goes up to a 20-30%
interest payment? Unemployment/welfare/Social Security/medicare etc.? The FED gove obligations are in the trillions. They will inflate the currency to survive. Hundreds of trillions are owed by the Fed Gov.

fireant's picture

I agree, but

I fear the anticipation of such is a bit premature, which will catch many people off guard. I'm just sayin, be prepared; we may see a period of deflation before we get slammed with spiking prices. The street is heavy bearish on the dollar, but Europe and China may cause it to reverse intermediate term (causing a huge inflow of capital). I could be wrong, but with so many compatriots braced for imminent inflation, it would not suprise me to see it go the other way briefly. It's worth noting NIA is projecting hyper to occur in 2015.
It's also worth noting that silver, as you stress, appears to be making a move completely independent of all these considerations.

Undo what Wilson did

very good points.. I will say

very good points.. I will say this.. I am hoping for deflation. If we do hit a high/hyperinflationary event it will be much harder then just having the worth of your house and stock portfolio decline.

the beauty of silver and gold is that they do great in deflation as well as inflation.

SteveMT's picture

And they are working on adding "don't breathe:" Those carbon...

credits do add up.

Inflation is here, but so to remain all of the lies.

bump

Thanks for posting.

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Department of Economic Prosperity

I like to refer to all these various bureaus as the Department of Economic Prosperity. More consistent with the naming scheme behind Department of Homeland Security.

Krugman confirms--NO inflation as he Defends Bernanke

It’s not as if the Fed is doing anything radical. It’s true that the Fed normally conducts monetary policy by buying short-term U.S. government debt, whereas now, under the unhelpful name of “quantitative easing,” it’s buying longer-term debt. (Buying more short-term debt is pointless because the interest rate on that debt is near zero.) But Ben Bernanke, the Fed chairman, had it right when he protested that this is “just monetary policy.” The Fed is trying to reduce interest rates, as it always does when unemployment is high and inflation is low.

And inflation is indeed low. Core inflation — a measure that excludes volatile food and energy prices, and is widely considered a better gauge of underlying trends than the headline number — is running at just 0.6 percent, the lowest level ever recorded. Meanwhile, unemployment is almost 10 percent, and long-term unemployment is worse than it has been since the Great Depression.

http://www.nytimes.com/2010/11/19/opinion/19krugman.html?_r=...

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