[threadbear]

Asset prices could remain level or go down, everything else will go up. No imperial power, in it's twilight years, ever goes in a deflationary blowout. Pols always choose inflation. Nature is also choosing inflation as diminishing resources become scarce enough to demand top dollar.

[Don35]

Hyper-inflation for me. "We" love to print "money". Also to discuss: how do you prepare for hyper-inflation or deflation if you choose?

[thuja]

Both inflation and deflation...

Inflation of Energy, manufactured goods, food...

Deflation in Exurban homes and McMansions far from work, deflation in homes in bad areas of the country, used SUVs.

You should be able to pick up deals on used things that people are selling to get desperately needed cash.

[I_Like_Plants]

$this->bbcode_second_pass_quote('thuja', 'B')oth inflation and deflation...

Inflation of Energy, manufactured goods, food...

Deflation in Exurban homes and McMansions far from work, deflation in homes in bad areas of the country, used SUVs.

You should be able to pick up deals on used things that people are selling to get desperately needed cash.

[thuja]

That's why its called deflation...its happening now.

[Twilight]

Deflation.

That debt is imploding. You can hear the vacuum sucking.

That doesn't mean that everyday living won't get more expensive if you're poor - it will.

The US government isn't about to bail out anyone but a select few. The same is true everywhere else. You can restore your creditworthiness faster than it can restore its reputation. Thus it will watch everyone go under. But if you are one of the lucky few in the black and able to stay in the black through the transition, it will be a lot easier to bear.

[I_Like_Plants]

If I again look at my own example, I'm spending 1/10th of what I was when I was employed. And some of the examples are extreme, such as paying 50 cents for a pair of jeans at a local thrift where I used to pay $5 at a thrift in California. Or spending 30 cents for the house slippers I'm wearing right now, where I'd pay $3 for a pair at a thrift out on the coast.

Food via food stamps is $3 a day, I was spending $10 a day or a bit more, before.

So, I'm already living in my own little The Waltons bubble, and this is not unique. Every American or American family now living a tent city or doubling up with friends, has had the car repo'd or is no longer paying rent and is living in the car, is spending a lot less. And they're shopping for cheaper versions of what they need, which to me is a pretty good example of "feels-like-deflation".

And of course this whole thing feeds back on itself, the more lose jobs, the more lose jobs.

[Gerben]

It will be inflation. The housing prices may not be going up so fast any more, but the prices to build new houses are increasing. That means that housing prices will go up again also.
There is no way you can win from 'the printing press'. They can create $ 100000000000000000000 just by typing it (it would only take a fraction of a second to type another 0 and increase it tenfold). Welcome to the age of electronic banking.
If there was a risk of economic stagnation due to deflation, they would simply create another war. Plenty of cannonfodder available.

[Twilight]

$this->bbcode_second_pass_quote('Gerben', 'I')t will be inflation. The housing prices may not be going up so fast any more, but the prices to build new houses are increasing. That means that housing prices will go up again also.

[I_Like_Plants]

Gerben may be onto something though. Civilizations tend to try doing more of the same thing they've been doing, when things go wrong.

The Easter Islanders built even bigger heads, and the biggest of all heads on the island was built, actually never all the way finished, as their society collapsed.

Germany in WWII built more and more superweapons in a frenzy, so that at the end of WWII there were all these way-out weapons that never got used.

In the US, the mantra has been consume, consume, consume, so as things get worse we may yet see even bigger and more rediculous McMansions even as most of us are living in Hoovervilles..

The question is though, will there be pennies for a loaf of bread, or $1000 bills for a loaf of bread, in our pockets?

[evilgenius]

Overall, I have to say that you can't lose that much money out of the system without causing deflation. Banks create money by making loans, deflation happens in the reverse. Peak oil means, however, that we can all expect at least relative inflation of energy and food. Foreign buying of US assets could be a bit of an offset to deflationary forces. The effctiveness of foreign infusions depends upon whom the money reaches and what they choose to spend it on. If foreign money reaches those that spend it on hard goods and are incentivized to borrow in order to purchase assets, then it could have a high multiplier effect and help to offset deflation more. If those people are, however, the kind that buy booze and cigarettes mostly, then the multiplier would be low.

[CrudeAwakening]

I think we'll see deflation of credit, along with an attempt to ameliorate this via inflation of base money supply - effectively what is already beginning to happen.

I think true hyperinflation will be difficult to achieve without significant credit inflation, which requires a willingness to lend and borrow, and contains the seeds of subsequent deflation within it. Plus it depends on the extent to which inflationary psychology kicks in - in the early stages of Weimar inflation, prices rose faster than money was being printed.

But by directly monetising greater and greater amounts of government debt, the Fed could cause significant inflationary impetus.

The way I see it, the central bank has no interest in seeing the value of it's assets inflated away to nothing. But perhaps it will have no choice?

[Kingcoal]

Whatever happens, the big boys are not going to lose. Look at what they do and do the same. Cheney and company seem to be relocating to Dubai, does that tell you anything?

I think that thuja has it right. What is in the control of the big boys will continue to be floated, what is not, will go up in price.

[I_Like_Plants]

The only bright spot about that is Dubai is built on a base of slavery, and many of the slaves speak a different language than the owners, so it would seem ripe for slave revolt to me.

If we can sneak little manuals into the place written in Tagalog etc on how to destroy infrastructure, we could really mess up their party.

Too many rioters and freedom fighters spend too much energy breaking windows and not enough breaking up the local electricity substation for instance. I smile every time I hear about the slaves (or near-slaves) on cruise ships crapping in the meat loaf...

[Fiddlerdave]

Hyperinflation. We have already printed the massive warehouses (figuratiively AND literally) of $100 bills out in the world, that people sat on because they thought they were worth something. Now that it is becoming apparent the currency is not going to hold up it to its promise, and will be worth even less in the near future, that money is going to become crawling out in a frenzy of purchase and exchange woth p[eople trying to get whatever they can for them before it loses more value each day, which even if we stopped the presses entirely, is going to drag the dollar down in value by several zero's.

It is already over, its a Dead Dollar Walking!

[LoneSnark]

$this->bbcode_second_pass_quote('', 'I') smile every time I hear about the slaves (or near-slaves) on cruise ships crapping in the meat loaf...

[I_Like_Plants]

$this->bbcode_second_pass_quote('LoneSnark', '')$this->bbcode_second_pass_quote('', 'I') smile every time I hear about the slaves (or near-slaves) on cruise ships crapping in the meat loaf...

[LoneSnark]

I guess you have never been on a cruise ship. The companies need to employ people with a minimum understanding of english in order to follow orders and communicate with the rest of the crew and passengers. As such, the cruises I have been on were divided evenly between white people from Eastern Europe and Asians where learning English is popular. To my knowledge I have never seen an African or South American working on a cruise ship.

This is only because cruise ships empoy too many crew to hire exclusively from one region, which means they must pick one common language, which is almost always English. Freighters which have dramatically fewer hands on board can simply pick a local language (such as Mandarin or Spanish or Russian) and hire native speakers. As such, a ship flagged in the Netherlands will have an all Chinese crew so they can easily comunicate with each other.

[heroineworshipper]

Here's a clue about inflation. No-one is giving houses to people making dollars unless it's either 25% interest or millions of dollars in a down payment because the dollars are worthless.

Here's another way of looking at the headline. In 2007, dollars could buy 20% less houses than they could in 2006.

That's the true story U won't hear in the media.

[threadbear]

$this->bbcode_second_pass_quote('heroineworshipper', 'H')ere's a clue about inflation. No-one is giving houses to people making dollars unless it's either 25% interest or millions of dollars in a down payment because the dollars are worthless.

Here's another way of looking at the headline. In 2007, dollars could buy 20% less houses than they could in 2006.

That's the true story U won't hear in the media.