"i think you dont know the difference between making informed predictions about the future, and knowing the future with absolute certainty"
That is what you believe and I have no problem with that. You will/must act as you believe.
As I said: "I wish you sincerest good luck with your future market speculations. " I have enjoyed our brief exchange but feel it is now time for me to move on. Thank you for your time/ comments.
how perfectly pleasant of you.
I’m not sure I changed my view. It can be debated what ‘printing means’. My version of printing is taking on debt from the world at just about zero interest in short term Gov’t bonds which the auctions are still oversubscribed and then going to buy their own long term bonds to drive down rates, buy off callable bonds and so forth. The credit they are giving the banks for bailouts is not being loaned, therefore printing AT THIS TIME, is not happening. The banks in turn are buying Treasuries as to what their Charters and regulations require. You try and get a loan and see what the terms are. Now could banks end up loaning the money? Could there be hyperinflation? Could the US Government monetize and devalue the dollar to worthless paper? Sure they could but I strongly believe that will not happen. I read John Williams Inflation report and I don’t have the time, nor am I getting paid to discuss it line and verse but the very first line says it all.
‘The U.S. economy is in an intensifying inflationary recession that eventually will evolve into a hyperinflationary great depression. Hyperinflation could be experienced as early as 2010, if not before, and likely no more than a decade down the road.’
Really? Now or in 10 years? I find absolutely no benefit in making such predictions unless simply to discuss economics sitting around a poker table smoking cigars and drinking cognac. I make assessments so I can profit from them in the next year’s time. You don’t see me making vague statements like that. I will give credence to the fact that our monetary system is a joke but it doesn’t mean the most likely possibility is inflation. I can also say, ‘One day a female will be President’. Great, thanks for that. Speaking about inflation now or in 10 years is worthless in terms of making money now. Now we have price deflation and a depression coming that’s what’s next on the agenda. As I mentioned before the game plan is to suck in the unsuspecting little guy, make him think Gold is what’s going to protect him from inflation, (what a joke all this talk about Gold and it can’t break 1000, now at 879) make him believe we are in a recovery, make him believe Government bonds are a horrible investment and then, pull out the rug. This is not a novel concept it’s been the blueprint forever.
You say,
I’m not sure what the entire media is saying. It does not matter to me.
Then you say,
So because people talk about inflation on TV, that means it won’t happen? Well, I hate to break it to you, but I’ve heard countless stories about deflation on TV.
I can’t follow.
In terms of me, ‘not wanting to hear about inflation’
That’s not the case, I wanted to see if anyone here is different to anything else I hear in the mainstream about inflation. …..Not really.
BTW, do you live in the U.S? What TV programs are you hearing about deflation?
Question: What is more logical? The Fed ruining the dollar to honor the FDIC or nationalizing the banks and telling people their money is there but they can’t have it now? Duh.
FYI. Most pensions in this country right now are massively penalizing their clients for taking their lump sums out of their pension. They are telling them they must leave that amount there but will sweeten their monthly payments so they don’t take it. IT’S ALREADY HAPPENING DEBTUS, IT’S ALREADY HAPPENING. The Feds will say. You can’t have your money now BUT we’ll give you a 5% clip while it sits. Come on, your American, little Johnny needs to eat and little Suzie needs her medicine, it’s only patriotic. It’s coming.
Also you stated,
Hyperinflation does not require borrowing by consumers/businesses at all. All it requires is sustained printing of money by the Federal Reserve. They can buy whatever they like with their dollars including oil, gold, houses, commodities, etc.
Please explain how prices can go to the moon if no one has any dollars? The first chapter of econ 101 explains supply and demand. If the supply decreases which I’m sure it will in a panic some prices may go up BUT if no one has dollars to purchase goods then what? What is in oversupply will fall to meet dollars/demand. Cars are going to see a super inflation? Homes are going to see a super inflation? With no jobs oil and gold are going to see a super inflation? Please help me understand, what are you talking about?
Lastly, I’m not ‘dismissing’ a runaway boom, I’m just damn sure we first have a deflationary depression and that’s where my money is. …what happens after that, I don’t know, I’ll tell you after this chapter unfolds.
my bank still offer personal loans at the same typical APR’s right now in april as we were doing two years ago.
and the incentives to staff for selling personal loans are the same too.
biggest changes have been mortgage side, with loan to value rates getting stricter, income multiples being slightly more demanding, but on the other hand, banks are still duking it out over rates and fee’s to win market share, and my bank this week increased the incentives to staff to sell more mortgages to our customers.
I’m not sure I changed my view. It can be debated what ‘printing means’. My version of printing is taking on debt from the world at just about zero interest in short term Gov’t bonds which the auctions are still oversubscribed and then going to buy their own long term bonds to drive down rates, buy off callable bonds and so forth. The credit they are giving the banks for bailouts is not being loaned, therefore printing AT THIS TIME, is not happening. The banks in turn are buying Treasuries as to what their Charters and regulations require. You try and get a loan and see what the terms are. Now could banks end up loaning the money? Could there be hyperinflation? Could the US Government monetize and devalue the dollar to worthless paper? Sure they could but I strongly believe that will not happen. I read John Williams Inflation report and I don’t have the time, nor am I getting paid to discuss it line and verse but the very first line says it all.
‘The U.S. economy is in an intensifying inflationary recession that eventually will evolve into a hyperinflationary great depression. Hyperinflation could be experienced as early as 2010, if not before, and likely no more than a decade down the road.’
Really? Now or in 10 years? I find absolutely no benefit in making such predictions unless simply to discuss economics sitting around a poker table smoking cigars and drinking cognac. I make assessments so I can profit from them in the next year’s time. You don’t see me making vague statements like that. I will give credence to the fact that our monetary system is a joke but it doesn’t mean the most likely possibility is inflation. I can also say, ‘One day a female will be President’. Great, thanks for that. Speaking about inflation now or in 10 years is worthless in terms of making money now. Now we have price deflation and a depression coming that’s what’s next on the agenda. As I mentioned before the game plan is to suck in the unsuspecting little guy, make him think Gold is what’s going to protect him from inflation, (what a joke all this talk about Gold and it can’t break 1000, now at 879) make him believe we are in a recovery, make him believe Government bonds are a horrible investment and then, pull out the rug. This is not a novel concept it’s been the blueprint forever.
You say,
I’m not sure what the entire media is saying. It does not matter to me.
Then you say,
So because people talk about inflation on TV, that means it won’t happen? Well, I hate to break it to you, but I’ve heard countless stories about deflation on TV.
I can’t follow.
In terms of me, ‘not wanting to hear about inflation’
That’s not the case, I wanted to see if anyone here is different to anything else I hear in the mainstream about inflation. …..Not really.
BTW, do you live in the U.S? What TV programs are you hearing about deflation?
Question: What is more logical? The Fed ruining the dollar to honor the FDIC or nationalizing the banks and telling people their money is there but they can’t have it now? Duh.
FYI. Most pensions in this country right now are massively penalizing their clients for taking their lump sums out of their pension. They are telling them they must leave that amount there but will sweeten their monthly payments so they don’t take it. IT’S ALREADY HAPPENING DEBTUS, IT’S ALREADY HAPPENING. The Feds will say. You can’t have your money now BUT we’ll give you a 5% clip while it sits. Come on, your American, little Johnny needs to eat and little Suzie needs her medicine, it’s only patriotic. It’s coming.
Also you stated,
Hyperinflation does not require borrowing by consumers/businesses at all. All it requires is sustained printing of money by the Federal Reserve. They can buy whatever they like with their dollars including oil, gold, houses, commodities, etc.
Please explain how prices can go to the moon if no one has any dollars? The first chapter of econ 101 explains supply and demand. If the supply decreases which I’m sure it will in a panic some prices may go up BUT if no one has dollars to purchase goods then what? What is in oversupply will fall to meet dollars/demand. Cars are going to see a super inflation? Homes are going to see a super inflation? With no jobs oil and gold are going to see a super inflation? Please help me understand, what are you talking about?
Lastly, I’m not ‘dismissing’ a runaway boom, I’m just damn sure we first have a deflationary depression and that’s where my money is. …what happens after that, I don’t know, I’ll tell you after this chapter unfolds.
I’d like to address all 10 but I don’t have the time, so let’s try number 9 for now.
9. Deflation occurs when a bank goes bankrupt, and no one bails it out. At least 9,000 U.S. banks went bust, 1929-33. (No major bank did – the old boys network was protected by the FED.) When they did, the money supply shrank. There was deflation in the depression. Today, no bank is allowed to fold. The FDIC buys its assets and pays off depositors. It does this with – you guessed it – fiat money. If the FDIC ceases to cover bank losses, there could be monetary deflation. How likely is it that Congress will let the FDIC go bankrupt? That is how likely deflation is.
Is that so? Wait to see what happens. Ask this guy to address what happens in bank nationalization. FDIC is finished, kaput, they aren’t staving off a monetary collapse, and to think congress is going to drop money out of helicopters into the FDIC to do it is almost laughable. ( You still believe Bernanke huh? WOW) Congress will have no choice and the FDIC will be, for lack of a better phrase, ‘reorganized’ like bankruptcy. Loaning as we know it is coming to an end for the next several years and deflation is here to stay.
The Federal Reserve is expanding it’s balance sheet. The only way it can do this is by printing money.
The point is what the media says is irrelevant to the entire matter. You made it a point to bring up how the media is talking about inflation, and how that it somehow makes the argument that we may actually have inflation illegitimate.
Logic rarely has anything to do with decisions made by governments and central banks. Actually, I would argue fallacious thinking more often motivates the government/Fed to action rather than logical thinking.
You must have read Bernanke’s helicopter speech. I may be wrong, but I haven’t heard him, Geithner, or Obama talk about bank nationalization as a serious possibility.
The Fed prints money.
The Fed buys X with printed money. (X=Oil,gold,wheat,houses,bad debt, anything!!!)
Sellers of X receive new money
Sellers of X start spending new money.(Sellers may hoard money, but at some point, the marginal utility of hoarding dollars will become less than the marginal utility of spending dollars.
Continue ad infinitum.
I’m not sure you understand how printing + monetization works. If I hold 10 ounces of gold and can currently receive ~$9000 for 10 ounces, what happens if the Fed comes out and offers $10000 of new money/ounce for gold (which they can at any time)? Suddenly, I have $100000 which came from printed money. I then begin to spend that money on food, gas, possibly housing or cars. It doesn’t have to be gold that they buy, it could be ANYTHING! The supply of dollars can be easily increased through monetization of assets.
It does NOT matter if there is unemployment. Take a look at Zimbabwe. Their hyperinflation occured with 20%+ unemployment and now they have somewhere around 80% unemployment. Unemployment hasn’t done a damn thing to stop inflation aka increases in the money supply.
Well, since you have little idea of how monetization works, I wouldn’t expect you to expect anything other than deflation.
You are welcome. A little politeness always helps, don’t you think? 
In summary we appear to have irreconcilable differences in opinion on these matters, or, to put it in terms an “Austrian” might understand, we have fundamentally opposite opinions about the conclusions that can be drawn from our individual [and subjective] interpretations of human action theory vis a vis markets and investments.
On the one hand your understanding of human action theory leads you to conclude that markets, and therefor future economic events can be predicted with a fair amount of accuracy, while my understanding of human action theory [along with personal experience] leads me to conclude that they cannot.
At the present time you have no incentive or need to learn why your understanding of human action theory might be incorrect, and in any case, even if you did so suspect, I have no incentive to spend a lot of my time showing you why it might be so and what to do about it. And exploring all of [or many of] the important ramifications of beliefs about human action as it relates to the subjects of economic prediction and investing etc. is a time intensive affair that I am unwilling to pursue on a public message board, regardless.
However I will still try to answer any other questions/observations you make directly concerning any of my other comments in this or any other section- although, of course, I cannot guarantee answers that you will agree with.
Interesting enough, CPI, PPI/ wholesale prices are dropping all around world.
Right, now the personal attacks, I don’t know how monetization works. Look guy the Feds offer government bonds. Japan, China, etc buy these bonds and this money finances the whole bailout…any other expanding of the monetary base is not inflation at this point, whether it will or not is another story, your joke Williams said 2010 or 10 years, please. What hole did you crawl out of? I read Bernanke’s book but his comments about dropping money out of a helicopter are as wide spread as apple pie and hot dogs. They were plastered over every newspaper, internet, TV, and media outlet; you must live in Zimbabwe yourself. I only hope your backwards brain is on this board one year from now when all of my predictions about this economy come true so we can see who doesn’t know about what. You may understand some theory but that’s all you understand. You don’t know how it applies or works in the real world, you just graduated from college, or sorry, University, with high scores in econ and now you think you know it all. How old are you 22? You interpret text and nothing more. I would bet donuts to dollars your net worth is that of a donut hole but you know how it works. When it comes to application you are a babe in the womb but I’m glad you’re telling it like it is. Your right, I admit it, I don’t know how monetization works, right. [:^)] My friend you believe theory and what you’re told by the media or your books about what the Feds are doing, but I know different. I have no more time for you or any of your questions. Go ahead and get the last poke, I’m getting off this post. To the rest of you, good luck and remember what I’ve said here. I maybe a bit crass and may not be the best writer but when you look back you will see what I said here will make me look like a prophet. I say that because you can’t find 10 people that say the same thing that I do but you can find 1000 that say what this joker, debtus says. Peace.
No one has been attacking you but all you’ve done so far is say “Oh you must be 22- you must earn no money- you can’t think for yourself- I’m right you’re all wrong hahahahahah inflation lol hahaha”. I don’t know why you’re so hostile-just relax and make your points without the nonsense. Everytime I read a post by you most of it is a bunch of garbage about how the poster you’re replying to is an idiot- then there’s maybe one or two sentences about a deflationary depression.
What specific predictions have you made that is new to anyone here? No one here is disagreeing that there is a deflationary bust after an inflationary boom.
Dear Ryan and all -
While I can understand all the interest in what the future will bring, I don’t think there is enough data to decide. If somehow all the dark derivatives were exposed, then I think it would be possible. Without it, we are in monetary inflation - by the strictest Austrian definition, price X-flation is completely different story - and what I termed credetary deflation. If you want to read Parts 9 and 11 here you can decide for yourself. I can be reached in the comments fields.
Jake
Knowledge is finite. We can never even have full knowledge of what occurred in the past, let alone the present … and the future? Forget it.
I’m not sure why I’m still getting emails, I want off. WE ARE NOT IN INFLATION. YOU PEOPLE ARE CRAZY TO THINK THE GOVERNEMENT IS GOING TO ATTEMPT TO PRINT ITS WAY OUT. THEY’VE READ THE BOOKS TOO, YOUR NOT SMARTER THEN THEM; THEY KNOW EXACTLY WHAT THEY ARE DOING. YOU ALL ASSUME, 'THEY’RE STUPID THEY DON’T KNOW WHAT THEY ARE DOING, YOU ARE WRONG!!! IT IS ALL ORQUESTRATED AND RUINING THE ONLY MEDIUM THEY HAVE, THE DOLLAR, IS NOT GOING TO HAPPEN. JUST BECAUSE YOU READ MISES AND AUSTRIAN ECONOMICS IT DOES NOT GIVE YOU AN AUTOMATIC PLAYBOOK OF WHAT THEY ARE DOING, IT’S SO SHORTSIGHTED THINK YOU KNOW AND THEY DON’T. I WILL NOT CONTINUE THIS DISCUSSION WITH YOU PEOPLE, STOP ADDRESSING ME, PLEASE.
lol And the State says jump and we’re supposed to say how high! [:P]
gotta love it…lol
If the government knew what it was doing we wouldn’t be in this mess… unless you believe they deliberately created this financial problem. Why? Because they want a crisis in order to seize more power from the state? If course, if you believe that, then you believe in conspiracy theories.
Bernanke already said he’d drop money from a helicopter to flood us with dollars. So far he’s been living up to his promises.
Wow, this is a quote to remember.
Truly, though, I’m sorry to see this thread degenerate into ad hominem attacks.
I enjoy hearing both the deflation and inflation viewpoint as it helps me to see possible problems with my logic and make my arguments stronger.
That’s unfortunate that you do not feel the same.
“Hyperinflation does not require borrowing by consumers/businesses at all. All it requires is sustained printing of money by the Federal Reserve. They can buy whatever they like with their dollars including oil, gold, houses, commodities, etc.”
Most of the huge sums probably aren’t even printed anymore…its just changed on a computer somewhere.
“from my understanding, inflation can be caused by several things. 1. An increase in the supply of money in circulation. 2. A decrease in the overall supply of goods while the supply of money in circulation holds constant. 3. Some semi-magical set of circumstance including mass irrationality.”
1] may be true, but only under certain conditions, depending on whether your phrase “in circulation” means, what was put into circulation [ie. what is supplied for circulation- that is, the actual money supply], or, if you mean what remains in circulation after demand has taken some out [of circulation].
In the 2nd., narrower definition your statement would correct as by talking about an end result it already accounts for demand.
2] is wrongheaded.
Back to statement [1]
My Definitions: “inflation”: a general decrease in the relative per unit purchasing power of the currency.
“Deflation”: a general increase in the relative per unit purchasing power of the currency
“money supply” : the rate at which new money is produced , relative to the previous rate.
“money demand” the general demand to hold onto cash/money and not spend it, [i.e to keep it out of circulation] by individuals, businesses etc. ,relative to the previous general demand to so do.
Assuming you meant the broader [pure pre-demand supply] definition and are talking about the actual supply of money [i.e new money creation] you say :
1] "inflation can be caused by several things 1. An increase in the supply of money in circulation. " :
It is not quite as simple as that.
An increase in supply that occurs when demand holds steady or is falling would be inflationary, however, an increase in supply that occurs when demand is increasing at an even faster clip, will not cause inflation, but would have deflationary implications .
Even if supply were falling, but demand for that supply is falling even faster, then inflation is the result, not deflation as might at first be thought.
Also, an increase in supply which occurred when the demand was also increasing, but demand was not increasing as fast as the supply , would also be inflationary.
2]: "inflation can be caused by several things 2. A decrease in the overall supply of goods while the supply of money in circulation holds constant. " :
No , wrongheaded, i believe, however a decrease in the demand for money under those circumstances [i.e. a steady supply of new money] will have inflationary effects.[i.e steady supply+ falling demand for that supply= inflation, or decreased value per currency unit].
And even if supply were falling, if demand falls even faster, inflation is the result.
As Von Mises showed in “The Theory of Money and Credit” the inherent value of all money [its final price/worth] at any point in time, no different from any other economic goods, is wholly dependent on the outcome of the interaction of the 2 factors: 1] the supply of the goods and 2] the demand for that supply.
From my examples, it should be clear that when the demand factor is properly considered, that there are several circumstances when increasing or decreasing money supply alone does not /will not have the “normally” presumed effects.
Mr. Morelli, if you would still like to make logical arguments regarding deflation vs. inflation, please post it here on this thread.
Until then, don’t privately message me as if we have some personal rivalry.