Is it a dollar bubble?
Submitted by lynnopoly on Mon, 11/24/2008 - 22:34
Is this right?
Government is creating a money bubble? First it was the dot-com bubble. It popped because it wasn't real. And to save the dot-com bubble and to save us from all of that pain of what that would cost, what we did is we created another bubble. By pumping more money in, making it easier to get loans, we pumped another, more money into it and people went out and they bought stuff. So we created a housing bubble and a credit bubble. Well, now that that has popped, what are we doing? We're creating another bubble but, it's the last bubble. It is a money bubble. We are pumping money into the system.
After this bubble pops, it's over?
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From what I
understand institutions have to dump their assets in order to have enough liquidity. Ahh! something like that.
Prepare & Share the Message of Freedom through Positive-Peaceful-Activism.
Maybe We Hold the Power
Looks like the conventional Austrian economics models would agree. Fiat currencies always collapse and the recent Fed hyper-drive of the printers is pumping excess amounts into the system.
Hyper-inflation would seem inevitable, but there are many aspects of this economic recession that are unusual. First, the dollar is currently on a rally against other world currencies. Now that's probably a fear-driven effect of the dollar long-being the world's "reserve currency" but it doesn't represent the reality that we started this mess and we are highly over-leveraged. We are the world's #1 debtor nation, yet folks are stilling buying the dollar. I can't see why that is. Second, though the Fed is flooding the banks with currency, there have not been signs of unusual inflation. House prices are down, gas is down, and wages are not going up in a classic wage/price model. Why these anomolies?
Well, for one, this situation is different from all previous ones. This is the first, truely global recession. Our markets and information about prices are world-wide and instantaneous. There are no "real" currencies in the world to seek safe haven. The US economy is 2/3rds based on consumption, so when the consumer quits buying, the economy tanks. Less consumer spending, companies make and sell fewer goods, which leads to lay-offs....which forces less consumer spending...and the downward spiral continues.
How do you break a downward deflationary spiral? I think the Austrian answer is: the market will, when prices bottom at a reasonable (equilibrium) level. We believe the market is naturally self-regulating. However, gov't always has to be seen as "doing something", so they will intrude and almost certainly make matters worse. Make work programs, stimulus handouts and pumping billions of dollars into the economy are the only gov't answers and they will fail. The gov't can give you money, but they can't make you spend it. They can't push a string and if millions refuse to "shop till they drop" maybe there won't be too many dollars chasing too few goods (one of the classic definitions of inflation).
What if millions of people see this as a wake up call and realize that being in debt means being in bondage? What if they quit buying anything other than bare necessities and vow to never apply for a loan again (except maybe a small home mortgage)? What if we just ignore the millions of worthless dollars sitting in banks and don't put them in circulation? We keep the old car running, start a garden in the spring and trade with friends for the things we need. Becoming a vegetarian or hunter/gatherer may become fashionable, again.
Could we avoid inflation by paying off debt, increasing savings and living within our means? Might this decrease the gov'ts power over us and increase our own personal liberty?
In short, yes, inflation is the book answer for the next phase. But we just might have the power to avert that devastation by returning to personal fiscal resonsibility. Frugality and Freedom begin at home!
"..shall not be infringed."
"..shall not be infringed."
If you study up you will make a few interesting discoveries
about currencies.
You see the best way to control folks is with money. Thus, a look at history will yield the struggle by the bankers and their masters to install central banks throughout Europe and eventually, here.
Their motivation must be the control of populations as that has been the result.
Our fed as you know is a privately held bank. The folks who own it and the folks who own them want one government.
The ONLY way to get a bubble in ANYTHING is through liquidity. This is the amount of money COMING INTO an economy. As the amount of money grows goods that are being chased by this burgeoning amount of money go up in price. Inflation.
If this monetary growth channels into one area as in stocks the market soars. A bubble.
To the point.
The bankers control ALL of the bubbles. "we" are not making bubbles. We are being "led"into monetizing assets (Real estate etc) by bankers lending policies.
You see if you are in debt to someone they have leverage on you. Through our national debt the fed owns the US. That was the leverage desired at the beginning of this post.
You control people and governments through DEBT.
This housing bubble was engineered as the stock bubble of 1929. All planned with one goal in mind.
Thus "we" are making bubbles is inaccurate. They know that they can use human greed (a form of fear) and debt of a rising market in anything to get you and I to chase it, go into debt and then leverage us into their political change. (globalization)
Not that complicated really.
Unify
Easy for you to say..
:) .. "Not that complicated really."
So the creation of money is the creation of debt which is "liquidation of liquidity?" To me it seems this is a bubble.
I guess I should have used "they" as opposed to "we," however, "we" are allowing "them" to do this...
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"It is your duty as loyal Americans to Shut up."– Bill O'Reily
Mathew 5:9 Blessed are the peacemakers: for they shall be called the children of God.
the mother of all bubbles!
Does my burka make my butt look fatwa?
Does my burka make my butt look fatwa?
...that has popped, in my opinion.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
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government of the people, by the people, for the people
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If the dollar bubble has
If the dollar bubble has popped, why is the USD index rallying? Or do you think that the last two days of declines in the USD index mean the bubble just popped?
"The sinews of war are infinite money" ~ Cicero
"The sinews of war are infinite money" ~ Marcus Tullius Cicero
Greed...if the money bubble
Greed...if the money bubble had indeed popped, it certainly didn't make a big boom. Once more, your opinions are so far off base that it is amazing to me. If the money bubble had popped you and everyone would know it, there would be no room for either doubt or, as in your case, opinion.
http://www.1776solution.blogspot.com
I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue. Barry Goldwater
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
The Dollar bubble has been
The Dollar bubble has been growing for decades. When Bretton Woods broke down in 71 it kicked the growth of the bubble into 3rd gear. By the mid to late 90's we had shifted to 4th and we are now in the process of shifting into 5th gear of the dollar bubble.
When the other nations start dumping their US bonds because they've come to the realization that the US will never pay back their loans that is when you will see the dollar bubble begin to deflate.....or hyperinflate....however you want to look at it. With Citigroup getting nationalized and the Fed talking about putting up 7.4 trillion dollars to save the financial system I'm pretty sure we are witnessing the demise of the Dollar as a viable currency.
The money supply bubble had been going on for
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
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decades, but it has popped and the money supply in the real economy is drying up very fast, in my opinion.
government of the people, by the people, for the people
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WRONG....again. They are
WRONG....again. They are inflating the money bubble faster than at anytime in our history. The problem is that you are not looking or perhaps just unwilling to look because it will bust your own little deflation bubble ideology that you have indoctrinated yourself with so much that you are now unwilling to consider anything else.
The money bubble has not popped, the credit bubble popped, the housing bubble popped...but as with all fiat monetary systems, the very last bubble is the money bubble. Besides, if the money bubble had popped, you would have more than an opinion on the matter...you would absolutely know it and everyone else around the world would too!
http://www.1776solution.blogspot.com
I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue. Barry Goldwater
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
In the early part of this
In the early part of this year I did a great deal of research, a good portion of which was about economics and the trail of bubbles throughout our history. I eventually came to the conclusion that the dollar bubble would be our last bubble or at least our worst bubble for a long time. It's interesting to see a message posted on this topic.
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