..flation? Who will benefit?
I am new to SI and this thread and just enjoyed myself reading the last 2 weeks of posts. I read a lot of arguments for deflation and some for inflation.
Most agree that there will be recession when the final bubble of all ... housing deflates. But then the big question is ... will it directly result in deflation, or first in (hyper)inflation due to a 'defensive' reaction of the FED and deflation later after the destruction of the dollar.
One aspect in the discussion I have not yet seen is the question who will benefit in both scenarios. I try not be too conspiratory, but I think in the end everything boils down to human greed.
Although the FED is considered by many to be there for the greater good of the economy; in fact it is just a consortium of independent banks with unclear ties to old money. I would expect that the FED eventually will do what is good for the FED, and the fairly small elite which holds a rather large part of the wealth.
I think the question of deflation / inflation will be quite influenced not by the question what is good for the economy, or not even what is good for the US, but how 'they' can gain.... or amass even more wealth.
If there is no more bubble to blow, and average people are strapped (no savings), and maximally indebted, and there in a new bankruptcy law which ensures more return, and laws are in place to better control offshore money after 9/11 .... what would be the best way to 'enable' wealth transfer?
Without these thoughts in the back of my mind I would again expect inflation, but if there is no more bubble to blow or no more way to extract value from the average worker ..... what sense would it make for the FED ??
If they would take the deflation way, of course a lot of banks would be hurt, and bank personnel would loose their job, but would the big money of the banks also be hurt that much? Or would they have their assets already in safer places?
They could just see it as a good event to get to a fresh start and a way to pick up assets for rock bottom prices.
Do any of you have an opinion on these thoughts?
Why would the FED inflate again seen through to eyes of the owners of the FED. Just as what would a business owner (e.g. GM) do, facing an inevitable bankruptcy of his group?
And BTW, Russ thanks for pointing me to this site. |
