Dummies Don't Understand It--THIS IS NOT A CRASH!

Once more, your opinion shows little but a disconnect between the differences of supply/demand deflation and monetary deflation, they are two different things and operate on two different mechanisms. First, you misunderstand what demand pushed deflation is, it is caused by sustained or continual decreases in aggregate demand. Cost pushed deflation is caused by sustained or continual increases in aggregate supply of goods and services. In economic models you can have several things happening outside of monetary mechanics.

Here again, you don’t seem to understand monetary mechanics, you have stated several times that the biggest part of the money supply comes from the private sector however, that is simply untrue. There is no instance which the private sector increases the money supply. Any extension of credit, which only represents the provision of present goods and services for future repayment from existing money can only be extended by private companies because credit has been extended to them by the banking system through what is known as “bank-money” which is part of the fractional reserve system. Remember, credit in the private sector depends on several things, one is that the entity extending the credit has a line of credit available to them from their banking institution, that is where their ability to extend credit comes from; second you must remember that such credit only promises future payment of future money as a promise for repayment at a future date. In such cases, these private entities are not creating money, only extending credit for future repayment on delivered goods and services.

Greed, you fail to understand so much about both the monetary system and credit systems under a government fiat system. Credit expansion is exclusively a government practice to extend as much expansion as possible to keep the gears of economic growth possible, since under a fiat system the only way to increase economic growth is through the inflation of both credit and the money supply. Now, private banks, investment banks are the prime instrument in the issuance of fiduciary media, but even their role is little more than ancillary to the overall mechanical system functioning as a basis of government and FED policies. The government/FED alone directs the entire course of affairs concerning the creation and expansion of credit within the market place using the tools it has available in such things as interest rate manipulation. Thus far, the government/FED has, through the decades, almost full and complete supremacy in every matter concerning the size and circulation of credit. While the actual size of credit expansion within the private and commercial banking system is limited, based upon the reserve system, the aim of the government/FED is to achieve the greatest degree possible of credit expansion.

The assumption that the private sector credit collapse would take money out of the system is, to say the least, a misunderstanding of how credit works; credit is providing present goods and services for the future promise of repayment, they are not current dollars, but future dollars. You fail to understand the differences between the various types of inflation, as well as the various types of deflation. As such, your conclusions are incorrect since you appear to be mixing up a great number of issues as simply deflationary on a monetary side of the equation, when in fact there are several factors involved.

As far as actual expansion is concerned, there are several inflationary factors coming into play. We will see those factors begin to take effect and while there are deflationary sectors involved in this massive downturn, the overall trend will be inflationary due to the extraordinary steps being taken by the central banks around the world, as well as in this country. I estimate a huge inflationary push by the middle of next year as we just begin to see the effects of all this massive injection of money into circulation through the various elements of the economic and monetary systems.

://www.1776solution.blogspot.com

Sorry, I don't buy into that theory. From what I see there is a complete unraveling of their precious debt standard of fiat money. This has been expected because such systems eventually implode due to the massive amount of debt necesary to create and maintain such systems. I see their complete power structure disintergrating before their eyes and they are scrambling to patch it up with anything they can at this moment. The fiat system is the source of all their power and wealth, without it they have no power and their wealth will fade with the fake money they have imposed upon us. I say let it die and send it to the bone yard.

http://www.1776solution.blogspot.com

Although we rarely agree on much Jzeff, on this I would agree concerning LaRouche overall however, on this particular subject he has hit it on the nose.

http://www.1776solution.blogspot.com