Deflation Message Board - Msg: 26751618

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Non-Tech : Deflation

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To: carranza2 who wrote (524)	8/12/2010 8:09:34 PM
From: Maurice Winn	1 Recommendation Read Replies (2) of 621

C2, there certainly are NOT fewer coins in circulation though it might be true that they are moving more slowly than in bubble times when everyone was buying and selling and getting richer on each transaction with each transaction confirming yet again each "investor's" perspicacity in matters financial and economic. Central bankers are pixelating ever more mountains of their fiat fantasies and they are doing it $1 trillion at a time these days [in the big countries and Euroserfland]. Politicians dealing in $1 billion amounts are so last-century. Heck, even New Zealand's government is going down the gurgler to the tune of $1 billion per month which even in US$ is $3 billion a year [which is a lot for a nation of subsistence welfare recipients]. All that has happened in the last 3 years is that people are adjusting their expectations and buying activities to what was really their financial situation than the one they imagined they had. Spending borrowed money can make people feel wealthy. NZ is going to learn about that soon when the creditors decide that the chance of being repaid their money [even without interest] is too low so no more loans will be forthcoming. During the adjustment back to reality, people are redeployed from caviar processing and luxury car making to potato growing and bicycle manufacturing. The market clearing process takes time, so there is an economic decline while people figure out what to do next and learn how to do it. Governments mess up the process, subsidize things that should shut, keep people in high pay when they should be in low pay, make it illegal to work for lower pay and cause other strife too. Eventually, economic gravity has its way. It can [as in Zimbabwe, Argentina and a lot of other places] get very ugly before reality is accepted. Mqurice

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