[patience]

No way to know when other countries will decide to run from Treasuries. But, I have read that China and the Saudis are buying a lot of gold, and China announced a big bailout program for their own economy, which leaves less for buying T's.

[Falconoffury]

If these were the days when Lincoln was President, the US would kill the Federal Reserve, so we wouldn't owe them money anymore. The government created the Federal Reserve, so they should be able to destroy it. The money system is ridiculous because the government has to service debt to, not only an institution that it created, but this institution can create money out of thin air through loans. The money system is a joke. It eventually collapses because the difference between capital and debt of the entire system only widens over time. There is literally no way to pay down the debt. It's a bankrupt system from the outset.

[MrBean]

$this->bbcode_second_pass_quote('Falconoffury', 'I')f these were the days when Lincoln was President, the US would kill the Federal Reserve, so we wouldn't owe them money anymore. The government created the Federal Reserve, so they should be able to destroy it. The money system is ridiculous because the government has to service debt to, not only an institution that it created, but this institution can create money out of thin air through loans. The money system is a joke. It eventually collapses because the difference between capital and debt of the entire system only widens over time. There is literally no way to pay down the debt. It's a bankrupt system from the outset.

[copious.abundance]

--> KNIL <--
$this->bbcode_second_pass_quote('', '[')b]Deflation Is Worse Than the CPI Indicates
by: Mark Sunshine November 25, 2008

Last week’s economic data is underestimating deflation. On Wednesday the Bureau of Labor Statistics ((”BLS”)) announced that the consumer price index ((”CPI”)) declined by 1.0% in October which was the biggest single one month reported decline since before World War II. Broad based deflation exacerbates the already severe credit crisis and increases cash hoarding by households and businesses. However, CPI deflation estimates are wrong because deflation is much worse than reported and the United States has already entered into a deflationary death spiral.

[...]

Since the week ending September 22nd seasonally adjusted M2 hasn’t changed very much. During the same period the Federal Reserve’s balance sheet grew from approximately $1.1 trillion to $2.2 trillion. I think that M2’s failure to grow indicates a type of cash hoarding in accounts that would have been picked up in M3 (if the Federal Reserve still published the statistic) which is consistent with deflation.

During the 1970’s President Ford started the WIN campaign, i.e., Whip Inflation Now, as he used the Presidential bully pulpit to try to jaw bone inflation down. On inauguration day President Elect Obama needs to start the DDT campaign, i.e., Defeat Deflation Today. But he needs to use more than the bully pulpit to defeat deflation, massive emergency fiscal stimulus is needed to shock the economy back to into its natural rhythm before it is too late.

[copious.abundance]

--> Marketwatch <--
$this->bbcode_second_pass_quote('', '[')b]Import prices plunge 6.7% on global slump
Big price declines seen in petroleum, nonfuel industrial supplies
By Rex Nutting, MarketWatch
Last update: 9:00 a.m. EST Dec. 11, 2008

WASHINGTON (MarketWatch) - The global economic slump is driving down the prices of traded goods and services at a record pace, the Labor Department reported Thursday.

Prices of goods and services imported into the United States plummeted a record 6.7% in November as imported crude oil prices fell a record 25.8%. It's not just petroleum prices that are falling: Prices of nonfuel imports fell a record 1.8%.

The prices that U.S. producers received for their exports also fell, dropping a record 3.2% in November. The monthly records on import and export prices go back 20 years.

The drop in import prices was larger than the 5% drop expected by economists surveyed by MarketWatch.

In the past 12 months, import prices are down 4.4%, including a 29% drop in petroleum prices. It's the largest year-over-year decline in import prices since 2002.

Import prices fell a revised 5.4% in October. Export prices fell 2% in October.

Import and export prices have fallen for four straight months, a dramatic turnaround from the earlier period of relentless inflation. A year ago, import prices were rising 12%.

[...]

[Concerned]

$this->bbcode_second_pass_quote('OilFinder2', '-')-> KNIL <--
$this->bbcode_second_pass_quote('', '[')b]Deflation Is Worse Than the CPI Indicates
by: Mark Sunshine November 25, 2008

Last week’s economic data is underestimating deflation. On Wednesday the Bureau of Labor Statistics ((”BLS”)) announced that the consumer price index ((”CPI”)) declined by 1.0% in October which was the biggest single one month reported decline since before World War II. Broad based deflation exacerbates the already severe credit crisis and increases cash hoarding by households and businesses. However, CPI deflation estimates are wrong because deflation is much worse than reported and the United States has already entered into a deflationary death spiral.

[...]

Since the week ending September 22nd seasonally adjusted M2 hasn’t changed very much. During the same period the Federal Reserve’s balance sheet grew from approximately $1.1 trillion to $2.2 trillion. I think that M2’s failure to grow indicates a type of cash hoarding in accounts that would have been picked up in M3 (if the Federal Reserve still published the statistic) which is consistent with deflation.

During the 1970’s President Ford started the WIN campaign, i.e., Whip Inflation Now, as he used the Presidential bully pulpit to try to jaw bone inflation down. On inauguration day President Elect Obama needs to start the DDT campaign, i.e., Defeat Deflation Today. But he needs to use more than the bully pulpit to defeat deflation, massive emergency fiscal stimulus is needed to shock the economy back to into its natural rhythm before it is too late.

[copious.abundance]

$this->bbcode_second_pass_quote('', 'A')nother point - a sustained decrease in the general price level is not possible without a sound money policy/gold standard.

[Starvid]

$this->bbcode_second_pass_quote('Concerned', 'L')et's get one thing straight. The terms deflation and inflation describe decreases or increases in the Money Supply not decreases or increases in the general price level.

[Micki]

$this->bbcode_second_pass_quote('Starvid', '')$this->bbcode_second_pass_quote('Concerned', 'L')et's get one thing straight. The terms deflation and inflation describe decreases or increases in the Money Supply not decreases or increases in the general price level.

[Micki]

$this->bbcode_second_pass_quote('OilFinder2', '')$this->bbcode_second_pass_quote('', 'A')nother point - a sustained decrease in the general price level is not possible without a sound money policy/gold standard.

[copious.abundance]

Another month of wholesale deflation.

--> Bloomberg <--
$this->bbcode_second_pass_quote('', '[')b]U.S. Producer Prices Fall 2.2%, More Than Forecast
By Shobhana Chandra

Dec. 12 (Bloomberg) -- Prices paid to U.S. producers fell more than forecast in November on a record reduction in gasoline costs, a sign the recession is cutting demand for fuel and keeping inflation contained.

The 2.2 percent drop in the producer price index followed a record 2.8 percent plunge in October, the Labor Department said today in Washington. The measure that excludes fuel and food gained 0.1 percent, after rising 0.4 percent a month earlier.

Inflation concerns are diminishing as worries about a prolonged U.S. recession intensify. With prices falling for everything from gasoline to cars, economists predict the Federal Reserve will cut interest rates again next week to revive economic growth.

[...]

[copious.abundance]

We now have 2 months of consumer deflation in a row.

--> Marketwatch <--

BTW in case anyone hadn't figured it out, since the article which opened the thread said that the bond market is expecting deflation "for several years," the purpose of this thread is to see how right (or wrong) the bond market's call is/was.

[MrBean]

I don't believe it's correct to say that bond market (meaning just T-bills) is expecting anything, except currently historically low yields. Including negative yields in latest auction. Professional commentators comment basically that the bond market has gone grazy.

It's just another bubble waiting to burst and/or to be inflated by funny money from Fed.

There has been still Real Capital (=trust) in US T-bills as a safe haven, but that capital is now being spend really fast to bail out Wall Street crooks etc. When that (last) capital is gone, so is US dollar and US Federal State.

[vtsnowedin]

On the news this AM. Vermonts government is trying to trim its budget by several million to match tax reciepts. Among the usual layoffs hireing freezes and rest area closings they put out something I have never seen before in any of these periodic debates. All state employees that make over $60,000 will get a 5% paycut. I thought they would be the last place to do this. Instead they are the first and I expect the idea to catch on throughout all government funded payroles and then spread to private industry.

[Daniel_Plainview]

$this->bbcode_second_pass_quote('vtsnowedin', '.') All state employees that make over $60,000 will get a 5% paycut.

[ReverseEngineer]

One can conclude from this that in the near future many VT State Employees who got mortgages based on their $60,000+ income will soon be falling behind on their mortgage payments.

Reverse Engineer

[mos6507]

$this->bbcode_second_pass_quote('ReverseEngineer', 'O')ne can conclude from this that in the near future many VT State Employees who got mortgages based on their $60,000+ income will soon be falling behind on their mortgage payments.

[Boo38]

I just read that FED EX was planning white collar pay cuts next year.

[ReverseEngineer]

$this->bbcode_second_pass_quote('mos6507', '')$this->bbcode_second_pass_quote('ReverseEngineer', 'O')ne can conclude from this that in the near future many VT State Employees who got mortgages based on their $60,000+ income will soon be falling behind on their mortgage payments.

[vtsnowedin]

Well for one thing there are not that many VT state employees that make over $60k. maybe the top 20%. And a 5% cut is a hell of a lot better then being laid off. The ones that are taking the biggest hit are the rest area attendents. They lose the whole job.