[gollum]

$this->bbcode_second_pass_quote('Sixstrings', '')$this->bbcode_second_pass_quote('evilgenius', ' ')God help us if the US military loses an engagement while this is all going on.

[Pops]

Pretty good read via ferfal, check out the whole thing

$this->bbcode_second_pass_quote('', 'B')ut hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

[gollum]

$this->bbcode_second_pass_quote('Pops', 'P')retty good read via ferfal, check out the whole thing

$this->bbcode_second_pass_quote('', 'B')ut hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

[americandream]

The top percentage anywhere WILL NEVER quit the US$ anytime. They may shuffle a percentage of their equity into risk in say China or a global index or some sexy sector on the way to a bubble, and another percentage into Euro, Sterling and the Swissie in order to hedge their safety, but quit aircraft carrier USA in a world awash with intrigue and drama, not very likely.

$this->bbcode_second_pass_quote('gollum', '')$this->bbcode_second_pass_quote('Pops', 'P')retty good read via ferfal, check out the whole thing

$this->bbcode_second_pass_quote('', 'B')ut hyperinflation is not an extension or amplification of inflation. Inflation and hyperinflation are two very distinct animals. They look the same—because in both cases, the currency loses its purchasing power—but they are not the same.

Inflation is when the economy overheats: It’s when an economy’s consumables (labor and commodities) are so in-demand because of economic growth, coupled with an expansionist credit environment, that the consumables rise in price. This forces all goods and services to rise in price as well, so that producers can keep up with costs. It is essentially a demand-driven phenomena.

Hyperinflation is the loss of faith in the currency. Prices rise in a hyperinflationary environment just like in an inflationary environment, but they rise not because people want more money for their labor or for commodities, but because people are trying to get out of the currency. It’s not that they want more money—they want less of the currency: So they will pay anything for a good which is not the currency.

[Sixstrings]

$this->bbcode_second_pass_quote('americandream', 'T')he top percentage anywhere WILL NEVER quit the US$ anytime. They may shuffle a percentage of their equity into risk in say China or a global index or some sexy sector on the way to a bubble, and another percentage into Euro, Sterling and the Swissie in order to hedge their safety, but quit aircraft carrier USA in a world awash with intrigue and drama, not very likely.

[americandream]

The efficiency or otherwise of this model, I agree, are the subject of another topic. But any suggestion that the US is about to fail for one or other reason misses that point that America is the global elites vault, is funded and sustained by them and will continue to for as long as the global model of wealth creation is in surplus mode.

Once this ceases to be the case, expect to see protectionism rear its head, the flight of the vast bulk of the world's capital (being Western), back to the fold and the onset of the sort of regional dynamics that led to the Great Depression.

$this->bbcode_second_pass_quote('Sixstrings', '')$this->bbcode_second_pass_quote('americandream', 'T')he top percentage anywhere WILL NEVER quit the US$ anytime. They may shuffle a percentage of their equity into risk in say China or a global index or some sexy sector on the way to a bubble, and another percentage into Euro, Sterling and the Swissie in order to hedge their safety, but quit aircraft carrier USA in a world awash with intrigue and drama, not very likely.

[Pops]

That guy's explanation of the difference in plain old inflation and hyperinflation was enlightening for me at least.

His description of a "flash crash" in treasuries and Bernanke buying them as fast as he can to the point everyone piles on - and then of course the sellers having nowhere to put their money except commodities made sense to my little brain.

It dovetails well with just about everything I'm reading, I obviously have no idea how likely it is but there is more to it than just sticking with Uncle Sugar since the original dumpers are US fund managers and TBTF banks.

[americandream]

It's fair to say that capital that is not working is being misapplied. One minute its full on risk mode and into commodities for example, the next, safety and into US government securities.

However, were there to be some calamitous event that shook the world, capital will invariably park itself in the US (Swiss neutrality means very little these days so Switzerland's haven status is not what it used to be).

The state of US currency means little when you are looking at the calamitous loss of complete market functioning and thats the nature of American haven status. Obviously those connected enough to lay their hands on hard commodities and gold would add that to their basket of safety measures, but to suggest that the market players would fatally wound their safe haven is to absolutely ignore realities on the ground when the explanation is a simple one.

Obviously, were the US currency to deflate to Weimar levels, then capital would shift to Europe/Japan and commodities en masse but for the moment, that is clearly not the case and does not warrant alarmist analysis of close term trends in the Greenback. When we get to the state that the Greenback is on its back, I suspect that will be the state with much of the world and we will in effect be in a global Depression never to emerge again except under some other dispensation.

But for the moment, I am quite sanguine about global markets, including America.

$this->bbcode_second_pass_quote('Pops', 'T')hat guy's explanation of the difference in plain old inflation and hyperinflation was enlightening for me at least.

His description of a "flash crash" in treasuries and Bernanke buying them as fast as he can to the point everyone piles on - and then of course the sellers having nowhere to put their money except commodities made sense to my little brain.

It dovetails well with just about everything I'm reading, I obviously have no idea how likely it is but there is more to it than just sticking with Uncle Sugar since the original dumpers are US fund managers and TBTF banks.

[Revi]

Can't we be headed into stagflation, like in the 70's? The price of silver and gold have gone up by about 10% in the past couple of weeks, and I imagine that will begin to ripple through commodities and eventually into the economy so that everything costs 10% more. That doesn't sound like much, but for people on the edge a ten percent rise in the cost of everything is a big deal. Right now people here in the US can barely afford the stuff they have now and when it's 10 percent higher they may be in real trouble.

[the48thronin]

"removing the volitile food and energy sector" LOL inflation will be low LOW I tell you! ( so sayeth the government)

[the48thronin]

http://www.harperpetersen.com/harpex/harpexRH.csv

look at 10 years class 6 7 and 8 only to see it plainly even in this "recession". Then look at 3 months, This summer.

These are the ocean crossing container ships. Usually in the summer rates skyrocket as Christmas and harvest seasons collide, this year FLAT. Not even the opening of the Mexican port and rail link that allows Asian containers to bypass the high dollar U S port fees has helped raise the shipping rates..

Conclusion.. Unemployment and riots for late October through December in CHINA. more bankruptcies for American trucking and retail. Lots of store closings when the Christmas season does not appear.

They already have Christmas trees decorated and for sale at LOWES nation wide.

[Cid_Yama]

$this->bbcode_second_pass_quote('', 'T')he Dow industrials rose 7.7% and the S&P 500 gained 8.8%, with both scoring their best September in 71 years.

For the third quarter, the Dow has risen 10%, the S&P 500 has gained 11% and the Nasdaq Composite has advanced 12%.

Stocks rallied early in the session after reports pointed to strength in the U.S. economy, including a bigger-than-anticipated drop in weekly jobless claims and a slight upward revision to U.S. economic growth for the second quarter.

[dissident]

Truly detached from reality.

Reduction in jobless claims is an example of wishful thinking:


(from a post by Kingfish at http://www.theoildrum.com)

Consistent with the reality that there is no real job recovery the confidence index took
a dive in September:

Conference Board

So the stock speculators are clearly picking and choosing what bit of information to believe in their idiotic rallies. From what I hear the trading volume is actually quite low, so there is some market distortion as a big moves are being driven by a few players.

[Pops]

$this->bbcode_second_pass_quote('', ' ')Readers may be surprised to discover that beginning in April, of 2010, continuing through today, there have been 22 out of 23 consecutive upward prior weekly revisions! In other words, the BLS has a definitive mandate to underrepresent the "current" weekly data and to allow it to catch up with reality once it has become "prior", and thus no longer market moving, when in reality should the BLS present true data it would have likely missed estimates on more than half the occasions it has "beaten" and caused ridiculous market spikes like the one experienced earlier.

[Lore]

The run-up in September is a head fake and a pure market trader bluff based on news being less bad. Participation, as said, is not widespread. How is less bad good? Only if you’re a hedge fund operator that needs to show double digit gains for the year to your clients.

That's not to say that the economy will try to get itself up off the mat, only to be greeted by the blow of hyperinflation sometime near the end of next year. Meanwhile, commodities are starting to show fundamental supply side constraints in a global environment.

[Plantagenet]

The FED is doing Quantitate Easing (QE). That means it is printing money in order to devalue the US dollar.

As QE causes the dollar to fall in value relative to other currencies, it takes more dollars to buy things like an ounce of gold, so the gold price continues up. So does oil, most other commodities and stocks, especially those of European or Asian countries, and even the stock prices of US multinationals and tech companies that get some of their earnings from sales in other countries with more valuable currencies.

[Revi]

Why are stocks and commodities rising so fast? Could it be that QE2 is floating around out there and when it docks in November like a plague ship it will bring hyperinflation with it?

[Cog]

How do you get hyperinflation with stagnant wages? My boss isn't going to magically give me a $10hr/pay raise just because gasoline and food prices have increased.

[dolanbaker]

$this->bbcode_second_pass_quote('Cog', 'H')ow do you get hyperinflation with stagnant wages? My boss isn't going to magically give me a $10hr/pay raise just because gasoline and food prices have increased.

[Lore]

$this->bbcode_second_pass_quote('Cog', 'H')ow do you get hyperinflation with stagnant wages? My boss isn't going to magically give me a $10hr/pay raise just because gasoline and food prices have increased.