[smallpoxgirl]

$this->bbcode_second_pass_quote('seldom_seen', '')$this->bbcode_second_pass_quote('smallpoxgirl', 'r')ising prices is the definition of inflation.

[sjn]

$this->bbcode_second_pass_quote('DantesPeak', 'W')hat's the true value of gold? of oil? I don't claim to know, but I'm not betting on the price of either to fall.

So we might not have what is called cost-push inflation. That doesn't mean the price of gasoline and diesel won't be selling at $10/gallon while your income is still the same as now.

Unless someone can tell me why a US dollar backed by some second level mortgage derivative is going to increase in value versus common basic commodities of depleting quantity, all these other points about deflation are seem superfluous to me.

Inflation is usually about the quantity of money, but it could also be about the quality of money. This was easier to see in the gold backed system, when for example, the dollar was devalued from $20 to $35 in the 1930s depression.

[patience]

Smallpoxgirl,
Exactly, if you can't get a loan now, it's because you're not a good credit risk. Problem is, much of our economy for several years has been based on loaning money to people who were poor credit risks, so they could buy stuff they couldn't afford. Take them out of the equation, and sales go down. (Consumerism is said to be 70% of the economy in the US.) Then, the rest follows it down.

Yep, the govt AND the sheeple are all mortgaged to the hilt, and the result is, who can afford to take on MORE debt to keep this thing crankin' along? How many can be fooled into paying to much for a house that is decreasing in value? And how much more cheap imported electronic crap do we really need? How long can we convince China and the Arabs to keep propping up our insolvent banks?

The FED has, by some reports, already gone through about half of their reserves keeping the finance sector from collapsing, and some say we'll see bad results by April 1, cheap money notwithstanding.

I'm betting that this whole thing goes down like a lead duck, and what the politicians do will be too little, and it's already too late for the IB's. Rumors now say Lehman's and Goldman Sachs ain't near what they are cracked up to be. Think I heard that the Arabs don't want to put any more into Citibank. What's that sucking sound? Did somebody flush a bank?

[sjn]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('seldom_seen', '')$this->bbcode_second_pass_quote('smallpoxgirl', 'r')ising prices is the definition of inflation.

[smallpoxgirl]

$this->bbcode_second_pass_quote('patience', 'S')mallpoxgirl,
Exactly, if you can't get a loan now, it's because you're not a good credit risk. Problem is, much of our economy for several years has been based on loaning money to people who were poor credit risks, so they could buy stuff they couldn't afford. Take them out of the equation, and sales go down. (Consumerism is said to be 70% of the economy in the US.) Then, the rest follows it down.

Yep, the govt AND the sheeple are all mortgaged to the hilt, and the result is, who can afford to take on MORE debt to keep this thing crankin' along? How many can be fooled into paying to much for a house that is decreasing in value? And how much more cheap imported electronic crap do we really need? How long can we convince China and the Arabs to keep propping up our insolvent banks?

The FED has, by some reports, already gone through about half of their reserves keeping the finance sector from collapsing, and some say we'll see bad results by April 1, cheap money notwithstanding.

I'm betting that this whole thing goes down like a lead duck, and what the politicians do will be too little, and it's already too late for the IB's. Rumors now say Lehman's and Goldman Sachs ain't near what they are cracked up to be. Think I heard that the Arabs don't want to put any more into Citibank. What's that sucking sound? Did somebody flush a bank?

[smallpoxgirl]

$this->bbcode_second_pass_quote('sjn', 'I') agree with you about the availability of credit, but the issue is nobody is a good credit risk. If you need credit then you're not going to get it!

[patience]

Smallpoxgirl,
Yeah, I think they'll do that all right. I just think it'll make matters worse by far in the long run, but politicians are SHORT run thinkers. That makes my Social Security (62 in Oct '08) look like a bad bet.

Yeah, we quit using credit cards some time ago, except for mail order, and pay it online immediately. That's good personal money management. Problem is, the banksters are depending on the outrageous interest income they get from CC debt, and need it to pay for the losses on bad mortgages and derivatives. Without that income, the banks go down faster, and credit gets tighter, as the remaining banks are strapped for cash so they can't loan out 10 x the amount. A dollar in lost reserves means roughly $10 lost loaning ability. Nice on the way up, but it's BAD on the way down!

In the mid 1930's, my uncle bought a farm and had 90% of the purchase price. In order to borrow 10 of the farm's value, he had to have a CO-SIGNER, who was a property owner, as in no mortgage. That's tight credit.
$^&$!!! Every time I hit numeral eight I get that (*^&*^!! smiley!

[MC2]

Patience, yep, that's it.

Small, it takes awhile for the concepts KD lays out in his TIckers to sink in; we've all been programmed to "believe" in the ability to "inflate away" our problems. Bernanke himself published a paper in 2002 saying exactly that - that he'd operate the printing press. I suspect he's getting a reality call as to what happens if we do that about now. Instantly .gov debt costs go to 20 per cent and we are stalemated.

Read back a few weeks in the Tickers, pretty sure it was covered in there. The big problem is there's really nothing left to make a good "bubble" out of! The debt money system has reached its natural conclusion: the available money is insufficient to service the debt that's been generated. Reset time.

[seldom_seen]

When the subject of the definition of inflation comes up. It is a good time to ask why is there so much head scratching as to its real meaning? There doesn't seem to be such much confusion surrounding the meaning of other economic terms.

The reason is that inflation is a "secret weapon" of the government. It can tax you without ever passing a law or letting you know. It purposefully under reports inflation in hopes you won't wake up in the middle of the night and realize that someone is stealing from your 401k or pension fund.

The federal reserve no longer reports M3 money supply anymore. That says it all right there.

As for the definition of inflation, it's has been twisted and warped and stretched and mangled to conceal the con job.

How can we discuss an increase in the money supply if it's not reported and there's no word to describe it?

[patience]

Mc2,
I'm convinced that Karl and Nothing have the eventual outcome NAILED. What I'm wondering is how much can the gov/ FED dilute the buck before that happens, and what happens to other currencies in the mean time? And my purchasing power, of course.

[smallpoxgirl]

$this->bbcode_second_pass_quote('MC2', 'I') suspect he's getting a reality call as to what happens if we do that about now. Instantly .gov debt costs go to 20 per cent and we are stalemated.

[patience]

I think it's wrong for CB's to control the money. But is the govt any better? Who knows. Andy Jackson tried to end that, and they tried to kill him. The word is, that's what got Lincoln shot, and maybe Kennedy. Both tried to get out of the clutches of the bankers. Any volunteers? Not me, thank you very much.

[smallpoxgirl]

$this->bbcode_second_pass_quote('seldom_seen', 'H')ow can we discuss an increase in the money supply if it's not reported and there's no word to describe it?

[DantesPeak]

I don't read the Ticker Forum or know KD is.

So far I don't know any reason to think he or she may be right, except that he/she posts a lot there. What exactly is his/her track record as compared to, for example, mine?

Did he specifically predict the price of oil these last few years as well as I, or gasoline shortages last spring, or that gold would go from $850 in December to $1000 before April 1?

[threadbear]

What I have difficulty with is the means of money delivery, even if they do start printing like crazed counterfitters, if so many no longer qualify for loans. If banks seize up more than they already are how is this cash going to circulate? The Japanese had this problem of getting cash into the hands of people, and tried dealing with it in a number of different ways, one of which was launching massive infrastructure projects, subsidizing banks and sharply lowering their interest rates.

Wikipedia:
The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many "zombie businesses".
The time after the bubble's collapse (崩壊 hōkai?), which occurred gradually rather than catastrophically, is known as the "lost decade or end of the century" (失われた10年 ushinawareta jūnen?) in Japan. The Nikkei 225 stock index eventually bottomed out at 7603.76 in April 2003 before resuming an upward climb.

http://en.wikipedia.org/wiki/Japanese_a ... ice_bubble

[threadbear]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('seldom_seen', 'H')ow can we discuss an increase in the money supply if it's not reported and there's no word to describe it?

[smallpoxgirl]

$this->bbcode_second_pass_quote('threadbear', 'W')hat I have difficulty with is the means of money delivery, even if they do start printing like crazed counterfitters, if so many no longer qualify for loans. If banks seize up more than they already are how is this cash going to circulate? The Japanese had this problem of getting cash into the hands of people, and tried dealing with it in a number of different ways, one of which was launching massive infrastructure projects, subsidizing banks and sharply lowering their interest rates.

[MC2]

$this->bbcode_second_pass_quote('patience', 'M')c2,
I'm convinced that Karl and Nothing have the eventual outcome NAILED. What I'm wondering is how much can the gov/ FED dilute the buck before that happens, and what happens to other currencies in the mean time? And my purchasing power, of course.

[roccman]

$this->bbcode_second_pass_quote('patience', 'M')c2,
I'm convinced that Karl and Nothing have the eventual outcome NAILED. What I'm wondering is how much can the gov/ FED dilute the buck before that happens, and what happens to other currencies in the mean time? And my purchasing power, of course.

[sjn]

Treasury auctions won't matter when the printing press is running full tilt. What are foreign creditors to do while the debts are inflated away? Sure, the current system has relied on foreign purchase of US debt, but the purpose was to get the rest of the world to pay tribute to the US by artificially supporting the Dollar, the system was structured to make it in their interest to do so (and if they disagreed the military/CIA was there to make the point). That system can't operate anymore in the interest of the creditors, as we know it was predicated on constant growth. We now get to see how well the US millitary backing of the system works out.