PeakOil is You
THE Deflation Thread (merged)
Re: Deflation is a good thing
by vision-master » Thu 20 Nov 2008, 19:01:01
$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('Tyler_JC', 'N')onsense. Do you think your wages/benefits will stay the same if their is widespread deflation?
Tyler, for you and other members trying to keep scores straight at home, Vision is a proud 55-year old former servant of the Great State of Minnesota, who in numerous occasions has said he's on a state pension guaranteed by law, and actually said pension is going up. Vision doesn't care about our wages/benefits; he's got his and that's all he cares.+1 Bring it on baby.........
- vision-master
Re: Deflation is a good thing
by Tyler_JC » Thu 20 Nov 2008, 22:04:12
And if Minnesota has less and less tax revenue every year thanks to falling incomes, falling property values, falling sales taxes, etc..
Does he really think the state will be able to meet its obligations in that scenario?
Regardless, it's not going to happen.
Deflation, fiat currency, and a heavily indebted federal government do not mix.
Which scenario seems more likely to you?
1. Deflationary depression in which VM still gets his yearly COLA.
2. The Federal Reserve buys lots and lots of Treasurys (aka, prints money) and the Federal Government throws the money into the economy in accordance with basic Keynesian principles. You know, the same theory that has guided global economic policy since the 1930s.
Does he really think the state will be able to meet its obligations in that scenario?
Regardless, it's not going to happen.
Deflation, fiat currency, and a heavily indebted federal government do not mix.
Which scenario seems more likely to you?
1. Deflationary depression in which VM still gets his yearly COLA.
2. The Federal Reserve buys lots and lots of Treasurys (aka, prints money) and the Federal Government throws the money into the economy in accordance with basic Keynesian principles. You know, the same theory that has guided global economic policy since the 1930s.
"www.peakoil.com is the Myspace of the Apocalypse."
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Re: Deflation is a good thing
by EnergyUnlimited » Fri 21 Nov 2008, 04:33:41
$this->bbcode_second_pass_quote('Tyler_JC', '2'). The Federal Reserve buys lots and lots of Treasurys (aka, prints money) and the Federal Government throws the money into the economy in accordance with basic Keynesian principles. You know, the same theory that has guided global economic policy since the 1930s.
I think, we are running out of resources required to run economy as per Keynesian principles.
Current levels of debt are also IMO too high to allow that.
However we are likely to attempt Robert's Mugabe principles.
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Re: Deflation is a good thing
by Zardoz » Fri 21 Nov 2008, 10:16:21
Central bankers wary of deflation
$this->bbcode_second_pass_quote('', 'E')uro zone demand is plunging and price pressures vanishing, business surveys showed on Friday, while central bankers weighed the bleak prospect of deflation.
The Bank of Japan left its key interest rate at just 0.3 percent and said there would be a long road to recovery.
The United States, Britain and Europe are expected to ease their rates further next month as the worst financial crisis in 80 years hastens recession across much of the globe.
BoJ Governor Masaaki Shirakawa said he was on watch for the risk of deflation as Japan lapses into recession, although he did not forecast its return.
"The global economy is expected to experience a severe adjustment for some time," he told reporters.
St Louis Federal Reserve President James Bullard said with interest rates already low, the U.S. central bank may have to rely on "quantitative easing" to ward off deflation, recalling large BoJ liquidity injections during the 1990s to jump start the economy by flooding it with cash once rates reached zero.
"It would take some doing to get some deflation. But what I do think is the inflation expectations are very fluid right now," he told a regional economics conference. "If we do our job it won't happen and we're dedicated to that."
$this->bbcode_second_pass_quote('', 'E')uro zone demand is plunging and price pressures vanishing, business surveys showed on Friday, while central bankers weighed the bleak prospect of deflation.
The Bank of Japan left its key interest rate at just 0.3 percent and said there would be a long road to recovery.
The United States, Britain and Europe are expected to ease their rates further next month as the worst financial crisis in 80 years hastens recession across much of the globe.
BoJ Governor Masaaki Shirakawa said he was on watch for the risk of deflation as Japan lapses into recession, although he did not forecast its return.
"The global economy is expected to experience a severe adjustment for some time," he told reporters.
St Louis Federal Reserve President James Bullard said with interest rates already low, the U.S. central bank may have to rely on "quantitative easing" to ward off deflation, recalling large BoJ liquidity injections during the 1990s to jump start the economy by flooding it with cash once rates reached zero.
"It would take some doing to get some deflation. But what I do think is the inflation expectations are very fluid right now," he told a regional economics conference. "If we do our job it won't happen and we're dedicated to that."
"Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
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