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Will it be Inflation or Deflation?

so, yeah, we need a word to describe when the fed starts paying banks to borrow money. because, at that point, the money supply will tend towards infinity given enough time if its not stopped (like 6 months). And the value of that supply, the inverse of its rise. if it is stopped, after being fully initiated (we have til jun 1 to shut down the TAF for this reason) a credit implosion will occur and deflation will predominate, make all debts, which caused the problem, larger, given the increased value of the dollar in deflation and reliance on tangible assets and falling wages/prices.

If the fed fights deflation like that, as they give every indication
they are, we'll pass a threshold where, yes, the fed is printing
money, worth the full faith and credit of the nation, that will have
its value tend, over time, towards less than zero. Once we really
commit to crossing that line, we know where its all going to land. The now infamous TAF auctions have been "permanently temporarily" going to be happening for 6 months - struggling banks can borrow newly created money, generated by non-market based price analysis on mortgage backed debt, and do it in seclusion so no one knows what's going on.

so, what's that word, when a central bank falls down the rabbit hole and inflates at all cost in the face of a downward deflationary spiral and completely destroys the currency.

conversely, what happens if a similar scenario plays out, but
deflation, due to more quickly acting crisis and collapses, overwhelms the central banks ability to inflate?

what are these event horizon style events, one inflationary and one deflationary, called? In each case inflation or deflation overwhelms market manipulators and take on a mind of their own. How far away are we from that?

One particular lesson from Weimar Germany. Following the hyperinflation of the 1923 the currency was backed by certain property in Germany, This stabilized their currency, along with stolen gold, and lead them to unprecedented industrialization and militarization. Maybe Bernake is going to skip over the bank failures and go straight to reorganizing the value basis of green backs on the basis hundreds of billions of mortgages the Federal Reserve now owns and has nationalized?

Give me some terms to describe these black swans, please.




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Great investment idea.

Time to invest in Crane paper or more specifically cotton, linen and silk: plus ink, aren't these what U.S. dollars are made of?

Call it price equilibrium...tides are changing

Big words don't always tell it like it is but this one does. The every day goods we consume (food, fuel, clothing, ulilties) will rise because they have a lot of the same underlying pieces that are built into their cost (transportation, output requiring oil or gas, etc.). These will rise along with oil at $107+ a barrel. Add the fact that import prices are going to rise because of an anemic dollar and higher distribution costs and things will start to rise further. Don't forget that we import most of the stuff that we buy at stores these days. Prices are simply too low to be sustained. The tide rises.

Housing will continue to fall because of the situation Bernanke and the Moneychangers have gotten the country in. Home prices could drop another 30-50% because there will be little demand to prop up a sliding market that is totally overpriced. There are always areas that will hold their own but the party is over. The programs being considered all result in further declines in the dollar and this is not sustainable.

The concept of using home equity to pay for the kids braces or dance lessons will be over. Compound this with job losses and people dropping out of the workforce at an alarming rate, and you have much less earnings power in the marketplace and a deep recession hammering the middle class.. Much of this was avoidable if the housing thing was dealt with several years ago. Anyone talking about soft landings should have their medication changed. The tide falls on asset values like real estate.

Learn the song..."Silver and Gold" as soon as you can. Prepare as generations of people have before us.

So with a credit squeeze eventually adding to the problem, we will all be forced to cut back. Heir Boosch will not be able to tell people to get out their wallets and spend like he did after 9/11. We will adjust and it will be uncomfortable for a while. Rebuilding quickly is key!!!

It is called

Stagflation

reply

Things are looking very ugly right now and I agree that we are looking at sector deflation (housing, cars, retail) along with a badly inflated imploding dollar which nobody has to buy stuff with. Any cash on hand will be needed to purchase inflated fuel and food leading to more deflation in houses, cars and box store stuff. People that do have a nest egg of cash on hand will benefit some but the those who will do best will be the ones who have gold and silver coins.

I heard mothers in germany were eating their babies

This is more then hyperinflation! This is the NEW WORLD ORDER RECONTRUTION.Evelyn Rothschilds sets the price of gold everymorning
in the City State of London inc.,I know it also has to do with supply and demand but when he(Evelyn Rothschilds)owns 2/3 of the WORLDS gold he can come and go as he pleases!me and you put together times a few still will not matter ! This whole monitary issue has been a joke since the treasonous demacraps greased the skids for the federale reserve act of 1913 along with the 16th amendment .Start turning your yard into a garden get involved in food neighbor co-ops food water hopefully love is all that my body needs not money or gold or oil. F the devils this is the way they got control in the first place!Yes to Barter, garden, education, no to fiat no to bankers no to fractional reserve banking .Hyperinflation,stagflation,depression what ever you call it RP said we are in unchartered territory so you guess is as good as any but a name will not add up to the destruction that has already been done not to mention whats to come!so a name might not do it this time (rapture?,apacolypse?,tribulation? I really hope this is not the words we are looking for my 4 year old has so much more of life to see so for now Big J himself will have to tell me to give up !

actually it will be both..

actually it will be both.. deflation in housing, commercial property and autos..... inflation in food, fuel, medical etc...

commodities crash

I sort of wonder if the prices in commodities are because people are trying to put their money into tangible assets, or because it is a hint of monetary inflation due to massive TAF Auction monetary injections. I'm waiting to see if this continues another 6 months. If it does, expect hyperinflation. I'm talking $15 / gallon gasoline in August of 2009. If we suddenly see a crash in commodities, I'd interpret it to mean that investors are selling solid assets (gold, wheat) in order to meet margin calls and such drains on liquidity. This would seem to indicate that plans to inflate has failed, as sales in previously inflated assess clases rapidly deflate in order to deleaverage any number of positions.

http://www.FreeThoughtSociety.org/

you must remember...china,

you must remember...china, russia and the arabs will buy every last ounce of gold they can get there hands on.. the price may slump temporerily but it won't stay down for long... the idiots in this country do not own much gold. what they can sell to cover margin calls will not be much! gold is protection! the world does not revolve around the USA anylonger like it once did!