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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (75130)12/9/2006 8:45:00 PM
From: Tommaso  Read Replies (1) of 110194
 
Mish, it all had to do with the fact that a dollar was a dollar was a dollar, even after Roosevelt seized gold and devalued the dollar against gold.

For the previous sixty-five years, prior to 1930, the U. S. government had pursued a hard money policy, and even during the inflation of about 1915-1920, you could still get gold coins any time you wanted to for your dollars.

In the Great Depression, it was literally profitable to bury your paper money in a Mason jar in the back yard. When you dug it back up, you had a lot more purchasing power.

Now all we have a fiat currency.

How can you ignore the steady rise in prices of commodities?

The most amazing in the last 3-4 years is uranium, rising from about $10 to $65 (latest inside estimate as of yesterday).

To expect a 1930s-style deflation now is like expecting the return of the mule as the chief agricultural machine.

You are comparing Japan with the United States of 1930. That makes some sense and is at least provocative of useful discussion.

When you try to compare the United States of 2006 with the Japan of 1990, you have strayed into indefensible absurdity.

Of course, if all the world central banks suddenly cooperate in raising short term lending rates to 20%, you might be right.
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