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

To: John Vosilla who wrote (47890)	12/21/2005 2:28:16 PM
From: ahhaha	Read Replies (2) \| Respond to of 110194

Many of his points are so dead on target it makes you think he stole some of his lines from you and me There's no question about it he agrees with you. The guy argues for inflation. We all wish there was a viable argument for it. Inflation bails us out. However, everyone knows that game. The problem now is deflation. The problem now is the billions of people who are willing to work more cheaply. Therefore, inflated or inefficient economies will deflate. You can always Keynesian pump your economy out of deflation? How about Japan? They've been pumping furiously for 3 years and maybe prices are reviving. Maybe. If FED pumped, created Permanent, it wouldn't get prices to rise. It would make them fall! Why? Because interest rates would rise more rapidly than the effect from rising cash balances. Can't push on a string. It isn't even clear that FED can create enough money without losing its market influence to keep the US out of outright deflation. Fortunately, since the growth in negative relative incomes is slow, the rate of developing deflation is slow. How do powerful entities resist deflation? By attempting to raise prices. That only screws the deflation lid on tighter especially when these entities realize their total revenues fall with increasing price. They price themselves out even though they may enjoy something of a monopoly. That's what North sees as inflation: attempts to grab for more in a declining regime. The deflation major down trend is still above, and will admit some more wiggling by the grabbers underneath.