[MonteQuest]

$this->bbcode_second_pass_quote('PieceOfMine', 'T')he monetary definition of inflation is an increasing money supply.

[MonteQuest]

$this->bbcode_second_pass_quote('Loki', 'T')hat's the "problem," most of the hot-off-the-presses money isn't entering circulation. It's being used to prop up the financial sector's books, to wipe out their debt.

Fed prints money and gives it to the financial sector, financial sector adjusts some decimal points on their balance sheet and newly printed money disappears into black hole never to be seen again.

[MonteQuest]

$this->bbcode_second_pass_quote('Loki', 'T')he banks simply aren't loaning like they used to and/or people aren't borrowing/spending like they used to, which means less money being created, reduced velocity of money, and an overall deflationary trend. If the hot-off-the-presses money was entering general circulation, household debt levels would be rising, not declining.

[DesuMaiden]

I guess the general consensus to this question is a resounding NO. No, the economy will NOT get better after peak oil. Our economy will spire into an ever-worsening great depression that will make the great depression of the 1930s look like child's play by comparison. Pretty much the answer to my question can be found in this Youtube video entitled

Peak Oil strikes 2020: Oil price spike causes Worldwide Depression and Food shortages

https://www.youtube.com/watch?v=8j4Tyy5nsQ8

The economy will not collapse because of the peak of oil production, but rather the remorseless decline that happens after the peak. After the peak of oil production, our oil production will only continue to decline. This will result in the economy only getting worse until it completely collapses.

[Loki]

$this->bbcode_second_pass_quote('MonteQuest', '
')
The Fed does not give hot-off-the-press money to the financial sector. They buy financial assets from commercial banks and other private institutions which inflates the price of those financial assets and lowers their yield, while simultaneously increasing the monetary base.

[Loki]

$this->bbcode_second_pass_quote('MonteQuest', '
')What you mean is that if the FED was buying peoples homes and inflating their value, people would have more money to spend. Just because they aren't, doesn't mean that money isn't going into circulation.

[Pops]

Pointing to the scary "Weimar Boogieman" is a favorite, the only problem is we didn't lose a world war, don't owe reparations, and so have no reason to hyper inflate as the Germans did. What is more, half the US debt is held by Americans; SocSec, mutual funds etc - hardly a note holder the US government would be anxious to short. Additionally, most countries love the dollar, they think it is safe or at least safer than other currencies, which is why it is still the reserve currency of choice after all these years of gold-buggery. LOL

I think the one thing that is certain, is any prediction of the PO economy is likely to be right - at least at some point, because the economy is likely to gyrate wildly. Picking the time frame for a particular gyration, now that's the hard part.

Having said that I'll take a WAG that the basic outline is a recurring cycle of debt deflation and reflation - bubbles - starring private debt - not government debt as hyper-inflationists typically threaten but private debt; exactly as happened in '08.

$this->bbcode_second_pass_quote('', '(')1) Debt liquidation leads to distress setting and to
(2) Contraction of deposit currency, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of deposits and of their velocity, precipitated by distress selling, causes
(3) A fall in the level of prices, in other words, a swelling of the dollar. Assuming, as above stated, that this fall of prices is not interfered with by reflation or otherwise, there must be
(4) A still greater fall in the net worths of business, precipitating bank-ruptcies and
(5) A like fall in profits, which in a " capitalistic," that is, a private-profit society, leads the concerns which are running at a loss to make
(6) A reduction in output, in trade and in employment of labor. These losses, bankruptcies, and unemployment, lead to
(7) Pessimism and loss of confidence, which in turn lead to
(8) Hoarding and slowing down still more the velocity of circulation.

[MonteQuest]

$this->bbcode_second_pass_quote('Loki', 'N')o, I meant exactly what I said.

[MonteQuest]

$this->bbcode_second_pass_quote('Loki', 'B')uying assets at inflated prices is tantamount to giving them free money.

[PieceOfMine]

$this->bbcode_second_pass_quote('MonteQuest', 'I') explained it that way because many people believe inflation is rising prices.

[MonteQuest]

$this->bbcode_second_pass_quote('PieceOfMine', '')$this->bbcode_second_pass_quote('MonteQuest', 'I') explained it that way because many people believe inflation is rising prices.

[dolanbaker]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('PieceOfMine', '')$this->bbcode_second_pass_quote('MonteQuest', 'I') explained it that way because many people believe inflation is rising prices.

[MonteQuest]

$this->bbcode_second_pass_quote('dolanbaker', 'T')he problem with that standard definition is that it assumes that the paper money is a constant, which it isn't. In reality there is deflation as the costs of goods & services is shrinking relative to the volume of money available to purchase.

[MonteQuest]

$this->bbcode_second_pass_quote('', 'I')f we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source. We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation. We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country. If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.

[dinopello]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('', 'I')f we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source. We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation. We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country. If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.