[Quinny]

Hyper inflation mmmm..

I'm not going for a pint tonight love. I'm gonna pay the mortgage off tomorrow instead.

or...

can't afford food have to riot.


Deflation mmmm..

Negative equity we'll have to stay here.

or

lets go and buy loads of stuff with our surplus cash.


Personally I think we'll see massive asset devaluation alongside hyperinflation for essentials. Thats why a good stash will be invaluable!

[vision-master]

A long haul food trucking broker friend say's - food prices are going to go DOWN!

[eastbay]

Well, if printing a few trillion dollars makes food drop in price, maybe we should print tens of trillions of dollars... no... hundreds of trillions so food and everything else will drop in price so low they'll be just about free!


When you have more of 'something' its value erodes. It's the same with cash. In this case, we'll just have to give it some time. Be patient. Inflation will soon be tearing at us.

[3aidlillahi]

$this->bbcode_second_pass_quote('vision-master', 'A') long haul food trucking broker friend say's - food prices are going to go DOWN!

[seldom_seen]

$this->bbcode_second_pass_quote('eastbay', 'B')e patient. Inflation will soon be tearing at us.

[PenultimateManStanding]

As I said in the op, deflation is what's happening now. They're pouring funny money into the system and it just sits in the banks' vaults who are worried about solvency. We'll just have to wait and see what happens in the long run.

[DantesPeak]

First, I challenge the deflationists to find any long term period, more than 2 years, in a modern economy where more than marginal deflation continued. It didn't in the US, and in fact, inflationary government action caused commodity prices to rise 75% in the middle of the 1930s depression.

Second, I challenge the deflationists to explain why M1, M2, and M3 money supply measures are rising at the fastest rates in history lately. Haven't deflationists always claimed the reason deflation would occur is because money supply would fall?

It takes about two years for increases in the money base to be fully reflected in consumer prices. Let's see what happens in the next year before rushing to judgement.

[smallpoxgirl]

$this->bbcode_second_pass_quote('miles392', 'W')ell isn't the concensus short term deflationary and longterm infationary?

[3aidlillahi]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'A')s I said in the op, deflation is what's happening now. They're pouring funny money into the system and it just sits in the banks' vaults who are worried about solvency. We'll just have to wait and see what happens in the long run.

[DantesPeak]

The Treasury's Supplementary Financing Program is still inflationary, even if viewed a sucking up money the Fed creates.

Since the Treasury turns the money over to the Fed, the Fed relends the money. It's unlikely all the borrowers will be buying treasury bills with the money, so there's extra money going into financial firms. Due to leverage, the extra money in the financial sector would expand the money supply.

Granted you can bet that interest rates of 0.01% on some treasuries won't last much longer, and the Treasury may reduce the SFP. This creates a new problem - wil the Fed call back its loans? I don't think so. Then the Fed/Treasury working together will go from somewhat of a mixed deflationary/inflationary force to a solidly inflationary policy.

[PenultimateManStanding]

Well, llaidilllladilaihi, grain prices are falling. I suspect food prices aren't far behind. But as I said, that just for now. Who knows what the future will bring.

[3aidlillahi]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'W')ell, llaidilllladilaihi, grain prices are falling. I suspect food prices aren't far behind. But as I said, that just for now. Who knows what the future will bring.

[perdition79]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'A')s I said in the op, deflation is what's happening now. They're pouring funny money into the system and it just sits in the banks' vaults who are worried about solvency. We'll just have to wait and see what happens in the long run.

[threadbear]

$this->bbcode_second_pass_quote('3aidlillahi', '
')
And again, in case it's been since the Hoover administration that you've had an econ class, that's not deflation. That's a correction. That's why the government seasonally adjusted inflation. We're still in an upward trend for pretty much everything, except luxury SUV's and shitty homes around where you live.

$this->bbcode_second_pass_quote('', 'W')ho knows what the future will bring.

[smallpoxgirl]

$this->bbcode_second_pass_quote('DantesPeak', 'T')he Treasury's Supplementary Financing Program is still inflationary, even if viewed a sucking up money the Fed creates.

Since the Treasury turns the money over to the Fed, the Fed relends the money.

[evilgenius]

Since nobody has yet to stand with PMS on this one I will. I don't count much as I have long been a proponent of the deflation model, but I'll have a go anyway.

You all are not listening to PMS when he is telling you that something new is happening. He is attributing it to the banks stashing away money, thus its failure to enter the system. What he is really describing is that the system is broken. The money that is being thrown at it is being thrown into a black hole. Bernanke's helicopter speech was all about his being able to take the wealth stored in the financial system as illiquid assets and quickly turn it into liquid assets. He is finding out that you can't do that with a broken system.

The only way out of this is going to be the way that involves rebuilding the parts of the existing system that will fit into an entirely new system. That's right folks, it is that bad.

I suggest right away that the short term loan situation be addressed in a way that does not involve leveraging a certain amount of invested money several ways, but instead seeks a one on one financing, allowing those that will fail to do so by their lonesomes, thus shrinking the money supply at a natural rate and giving the old system some place to at least ventilate while something new is built is its place.

If you don't at least do that then there is no legitimate place for the busted semi-legal and illegal off-shore and hedge fund money to go through its death throes except in violent market swings that seem to have no explanation. We are far better off allowing the 'hidden' money to materialize in the overt forms that it has always managed to hide behind in the past and see those overt forms go bust, in other words.

[PenultimateManStanding]

$this->bbcode_second_pass_quote('evilgenius', 'S')ince nobody has yet to stand with PMS on this one I will. I don't count much as I have long been a proponent of the deflation model, but I'll have a go anyway.

You all are not listening to PMS when he is telling you that something new is happening.

[Hawkcreek]

To me, it seems that there is deflation only in items that can't be sold - houses, SUV's, and the components of those items - copper, steel, etc.
All the stuff that I like to buy (or have to buy) ---guns, ammo, food, etc, has all gone up in price quite a bit.
So I call overall deflation as not true at this point. If I see a lot of deflation in essential stuff like the above, I will believe it.
It just doesn't make sense that increasing the amount of money in the world would lead to deflation.
If I am wrong, someone please educate me.

[AgentR]

The factor that insures inflation isn't here yet... ie, medicare, medicaid, and social security.

When they come, there is no other option.

[PenultimateManStanding]

$this->bbcode_second_pass_quote('Hawkcreek', 'T')o me, it seems that there is deflation only in items that can't be sold - houses, SUV's, and the components of those items - copper, steel, etc.
All the stuff that I like to buy (or have to buy) ---guns, ammo, food, etc, has all gone up in price quite a bit.
So I call overall deflation as not true at this point.