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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: longjonsilvers who wrote (29942)	4/3/2005 7:40:54 PM
From: NOW	Respond to of 110194

they would in essense print themselves out of work: "And the thing to understand is that unless they go to a pure paper inflation—which would require them to chew through the whole credit market—that would provoke such an uproar that it would force them to quit it"

To: longjonsilvers who wrote (29942)	4/3/2005 9:06:22 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Monetarists can go to great lengths to increase monetary velocity further by issuing new credit or printing new currency. But eventually they run to the end of their rope. A few years ago they were very proud of their study which suggested a quarterly tax on money (your money would not be good without the latest tax stamp). This would discourage savings and force spending and circulation. When you read this nonsense you see how crazy they are and to what degree monetarists are willing to go to stamp out any vestiges of free market activity in our economy. Yes, they can mail everyone a check for $1 million dollars and monetize every bond in the credit market. But at the end, you still get an economic collapse. A loaf of bread might cost $1 billion, but when valued in real currencies or actual things worth having, price for real estate and other items run up in price by the credit bubble will have collapsed. .

To: longjonsilvers who wrote (29942)	4/3/2005 9:18:17 PM
From: mishedlo	Read Replies (3) \| Respond to of 110194

BUT didnt bernanke say in that famous heliocopter speech that the fed did and could once again monetise bonds? is this not, unless im mistaken, equivilent to the fed printing money (not credit) to buy its own credit (treasury bonds). Pray tell, how does this then end in deflation? In theory they COULD. In practice it will not happen. Hyperinflation would bail out debtors (the mass public) at the expense of creditors (banks, financial institutions, and the wealthy). In other words, it is an unloaded gun. Finally, even IF they did try there is no guarantee of success. Japan tried for 18 years to defeat deflation with masive public spending on totally useless projects. All it got them was as federal debt of 300% of GDP and still no inflation. Mish

To: longjonsilvers who wrote (29942)	4/3/2005 10:35:17 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 110194

Of course this can be done. And then we can rename the United States "Zimbabwe". It can't and won't happen in a Democratic society, particularly the United States. That's why Deflation is inevitable, unless I suppose the world grows much faster than us and support our spending habits to infinity. Current US Monetary policy is completely predicated upon the US being a super-power and the dollar as the only reserve currency. What nation could cut its interest rates to near 0 in the misdst of massive budget and trade deficits? Historians will laugh at our hubris.

To: longjonsilvers who wrote (29942)	4/3/2005 11:55:51 PM
From: John Vosilla	Respond to of 110194

Stick around. Maybe those buffoons in the media should pick up on the discussions going on here. You sure get very little intelligent conversation on TV these days. Larry Kudlow, most money managers and all the pimps in the housing industry being paraded around these days are a ticket to poverty. Personally I'm still clueless on the hyperinflation versus deflation debate as we have not taken any decisive fork in the road as yet and perhaps never will. Seems more like a stagflationary rolling depression to me hitting different industries and geographic areas over time while others are booming with tremendous pricing power.