<<dilution of currency is a given, it is governments easiest way out of the mess they create. they have been doing it for ages and I don't expect them to change in our lifetime.The hard part is figuring how best to profit from it>>
yeup, the end-game chapter, section one, would and must involve inflation, which can neither help industry in general, nor salvage debtors in particular, but will very easily pulverize the savers just so that they would plead for the same policies that the earlier bankrupted debtors would. which is after all how the markets, casinos all, should work, mess up the greatest number of people in the harshest way at the most inconvenient time, i.e. just about every babyboomer, by making them penniless, just as they are about to do the golden years.
the counter to price deflation is to hold that which cannot be easily deflated given that people will be begging for inflation, the beast which they mistakenly think they understand and can deal with, and by and by, buy into that which has been deflated, just to ride the subsequent recognition phase for hyper inflation.
the script is Message 24743545
and the obama fire chat rehearsal is here Message 24745846 - listen to fdr lie
whatever will happen would be a variation of 1929 with fiat money (as opposed to 1929 gold-linked) difference, which may change the numbers indicated but the the truth that the numbers measure
imo, recommendation: save gold, ride the deflation, then buy real estate in secure locations with true yields, and do so on sorry leverage
realistically, the switch to gold and real estate can happen at the same elapsed time, and leverage can be astutely added by and by, backed by gold, to buy more real estate
btw, just in in-tray
player #1: Cover for Bernanke, etc? This time will be remembered as the silly season in economics.
In case anyone missed this this morning:
The idea appears to be to coerce the savers into spending by making their savings worth less...
Who is going to lend money under these circumstances, other than a central bank?
Up go the hard asset prices.
bloomberg.com
U.S. Needs More Inflation to Speed Recovery, Say Mankiw, Rogoff
By Rich Miller
May 19 (Bloomberg) -- What the U.S. economy may need is a dose of good old-fashioned inflation.
So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations. It might also help the economy by encouraging Americans to spend now rather than later when prices go up.
“I’m advocating 6 percent inflation for at least a couple of years,” says Rogoff, 56, who’s now a professor at Harvard University. “It would ameliorate the debt bomb and help us work through the deleveraging process.”
[BA: Back of napkin -- $1000 depreciating at 6%/year is devalued by roughly half in 10 years. This is something your government should do for you].
Such a strategy would be risky. An outlook for higher prices could spook foreign investors and send the dollar careening lower. The challenge would be to prevent inflation from returning to the above-10-percent levels that prevailed in the 1970s and took almost a decade and a recession to cure.
“Anybody who has been a central banker wouldn’t want to see inflation expectations become unhinged,” says Marvin Goodfriend, a former official at the Federal Reserve Bank of Richmond. “The Fed would have to create a recession to get its credibility back,” adds Goodfriend, now a professor at Carnegie Mellon University’s Tepper School of Business in Pittsburgh.
player #2: as an aside, the idea that higher inflation would make the debt burden easier to bear is one that could backfire very badly. it assumes that the markets will sit still while this happens and not demand higher interest rates!
furthermore, the price effect of inflation percolates through the economy unevenly, which is something i suppose even Mankiw should know? maybe? there is only a certain class that benefits from inflation - and it is most definitely not the lowly wage earners! their wages will be the last thing that goes up, and it won't be enough to catch up with the price rises!
player #3:
Sale to Gov't? WTF?
GM bankruptcy plan eyes quick sale to gov't
reuters.com
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