"Deflation's in the Pipeline!"
Posted July 22nd, 2008 by GREEDisBAD
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Deflation's in the Pipeline! by Enrico Orlandini
http://www.gold-eagle.com...
I'm not saying that I agree with him or disagree with him, but I just thought that this was an interesting article.
I doubt that many people would read it given the title, but I thought this was an interesting article nonetheless.
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Does anyone have a take on copper? This article
talks about it, but I don't know if I can buy his argument. Copper has been a mystery in my mind and it is one of several reasons why I think we might still have a little more time before a deflationary collapse starts. My guess is sometime between Q3 2009 and Q2 2010, but it's just a guess and I can easily be wrong.
"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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If he is correct then Jzneff will be right ...
A few months off, but we will see $70 oil.
Get ready to eat crow, all you Jzneff bashers.
M3 is all important.
The presses will not be able to work fast enough if liquidity crashes.
I will pray for all of you tonight.
WAHOR!!
All inflations are eventually followed by deflations; deflation
being a nice word for the event. The pain and suffering experienced by the latter is usually a function of the extent of the former.
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"An economy built on fiat money is a society on its way to ashes."
There was deflation after
the inflation of the 1970's?
In my view, the inflation in terms of credit increase has not
ended, yet. So, if you look at the general prices, the inflation of the 1970's had ended, but then the excess credit started to chase assets like stocks and houses and now commodities as far as I can see. In other words, the inflation in terms of the credit bubble has not ended, in my opinion. And, I think we have been in the final blow off top phase of the credit bubble, and that's why I think so many people like to talk about inflation. However, in my view, what would likely to follow this blow off top is likely to be far worse than the blow off top itself. In other words, I think deflation is coming in the future and I think it's going to be very bad.
"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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There has been continuous inflation, of varying degrees, in
the U.S., for many years including after the 70s. The general trend has been to inflate. I used the word "eventually" because governments will ride the inflation engine as long as they can but, as in inflating a balloon, it will eventually deflate; one way or another. We are still very much in an inflationary cycle, although there are brief periods of contraction and adjustment after which the inflation throttle is once again pressed further to the floor. You can find relatively brief periods of stability and even brief periods of price-deflation for some things, but I directed my post to encompass a longer view of history and not simply with respect to the U.S. economy. As long as inflation remains profitable to those who are in charge of creating it, it will continue.
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"An economy built on fiat money is a society on its way to ashes."
as Ron Paul said.... we are
as Ron Paul said.... we are into stagflation... the question is how soon does it progress into an INFLATIONARY DEPRESSION.. you will have both!
as for me and my home, we shall worship the LORD
I think Ron Paul is RIGHT. In fact, I don't disagree
with the idea that we are in a stagflationary recession right now and I think that this trend would continue for a little while and I think there is a good chance that things would get worse in an inflationary way for a little while. If you want to call that "an inflationary depression", that's fine with me.
BUT, in my opinion, a deflationary depression that is likely to follow would be far worse and far longer than the stagflationary recession that we are probably having right now and the inflationary depression that we might have in the near future. Therefore, I don't feel like paying much attention to these stagflationary or inflationary condidtions. So, while I think Ron Paul is right and I think that Ron Paul is in a postion that he must talk about what is happening today and what is likely to happen in the near future, I am paying attention to a little bit more in to the future.
One thing that I tend to disagree with the author of this article is the timing. I think we have a little more time before we go in to a deflationary depression and until then, I think that the inflationary condition would continue. In my opinion, the deflationary depression is likely to start sometime between Q3 2009 and Q2 2010. But, it's just my guess and I can easily be wrong.
"Only a virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters." Benjamin Franklin
Interesting article
We've not had a decline in real estate prices here; but then again we never really had a run-up like the other areas on the east & west coasts did. Things are basically still holding steady in my local area.
Prices for raw land in the rural areas has continued to rise; I think maybe people are catching a clue and looking for a place to get out of the cities.
I do know that things are getting tight....People are worried, in kind of a general way. Jobs are fewer and retailers offering more sales and incentives...But really just the beginning of what I expect to see.
Big-ticket durable goods like refrigerators, stoves, TVs, etc seem to be getting cheaper by the day so there may be some merit to the arguement.
Unfortunately, I don't know enough about economics to have even understood all of the article....
some prices going down, others going up
like food and gas.
I'm no expert but it seems like things are still chugging along here in Chicago. I haven't seen anything change here anyway to say that we are in a deflationary market. Real estate is down maybe 5% if that in the city. Starbucks is more expensive. You can't walk into Wrigley Field for less than $60 - $100 for a ticket and it seems like most bars are restaurants are still packed. Maybe we are in the middle of the shake up and most people are still putting stuff on the credit card and paying the price. Not sure when it's going to hit people here. Luckily I feel like those of us who are aware have been able to buy time. We'll see....
btw - this silver and gold market is annoying. It's always up in the morning and falls into the day. I know we have talked about it, but seriously the short selling etc. makes me wonder what is up. Will the real demand ever be recognized or have I read too many pro gold/silver articles?
Absolutely everything
is manipulated, that is the problem. Nothing is real any more. It is all whatever "they" want it to be. None of this has to be happening. People try to analyze it as if we live in an honest world, uncontrolled, but nope.
Excellent article
Thank you for the post.
I agree with the author. Debt is imploding now, and that is deflationary. The government is trying its best to reflate, but the question comes down to whether the government will be able to print money faster than it is being destroyed. I don't think that it will. Trillions in wealth is being destroyed, and the gov't doesn't have the capacity to make that up.
As I am fond of saying, everything - from the house down the street to a cup of coffee at Starbucks is overvalued due to the existence of easy money debt. If you can't afford it, just put it on the credit card. This drives prices up as it gives people a false sense of wealth.
But now that credit is harder to get, what do we see happening? People spend less. Prices go down. But they still have to pay off their debts. So they start bringing things to market - houses, cars, jewelry, even gold! They trade it in for FRNs, but it drives prices down. This is deflationary.
Thank you for the reply. As for gold,
I think it will roughly keep its value in the long run. For example, if you are a rich man, where would you keep your wealth while financial institutions like banks fail in a deflationary depression? I think that the demand for gold would go up. In fact, I think that gold typically did better during deflation than druing inflation in the past.
However, in the short run, I have concerns about gold especially after going up for 8 years with lots of people buying to hedge against inflation.
I think there is a chance that gold would pull back when the economy goes in to a deflationary depression.
"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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Hummm...I thought this was a very interesting article.
"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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Anybody else found this interesting?
"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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The war of inflation vs.
The war of inflation vs. deflation goes on.
Yes, but this consept of inflation vs. deflation is a mistake,
in my opinion. It is actually a fight against aging of the population, in my opinon. I think this is the real reason why they want Mexico, the young population.
"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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