Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: mishedlo who wrote (49514)	1/12/2006 12:29:56 AM
From: kris b	Read Replies (1) \| Respond to of 110194

A time line is not possible This might be of interest to you. rickackerman.com January 11, 2006 Published Daily -------------------------------------------------------------------------------- Inflationist North Dodges a Debate Eager to alert readers to the imminent danger of deflation, I tried unsuccessfully to draw Gary North, a well-known inflationist, into an edifying debate. Why North? Well, for one, I haven't come across an inflationist argument yet that couldn't be flattened by a fart. It stood to reason that North, a heavyweight when it comes to economics, would be able to throw a few argumentative punches that might cause us all to reflect more deeply on the inflation-vs-deflation conundrum. Unfortunately, North has turned out to be just another flyweight, unwilling even to step into the ring. The following note from him was the penultimate in an exchange of e-mails between us: “ I have no thought of persuading you,” he wrote. “My target is anyone who cannot make up his mind between inflation and deflation. I honestly do not care what you argue. [That’s for sure. RA.] I do care that the people who read me may read you. You are a threat to them. I will do what I can to immunize them.” I replied: “Great! Immunize away.” But I have my doubts that North is up to the task. For one, in the half-dozen or so e-mails that passed between us, he never once attempted to rebut any specific point that I’d made. The same is true of a series of exchanges he had with Jas Jain, a hard-core deflationist like me. And neither did North attempt to rebut me in an essay he wrote after our correspondence ended. A piece by him published a week ago at lewrockwell.com attempts this, but virtually every point North makes falls a step or two behind arguments that I’ve already knocked down. A Task for Readers At this point, I am no longer inclined to sift through Gary North’s writings to determine whether he may have said something about deflation worth responding to. Most of his essays, manifestly including the one linked above, are so loaded with non sequiturs that the discerning reader’s eyes are likely to roll about midway down the page. However, if any diligent Rick’s Picks subscribers or lurkers who are familiar with my deflationist arguments can detect something in North’s essays warranting a response, I would be pleased to provide one. My thoughts on the topic are widely disseminated on the Web and can be found merely by Googling my name. Meanwhile, if you’re interested only in the bottom line in the inflation-vs-deflation debate, you need only track the progress of the dollar. If North’s prediction of inflation is right, then the dollar will fall relative to other currencies. If I am right, though, and deflation is coming, the dollar will rise. North and just about everyone else except Bob Hoye have been wrong about this for at least the last two years. In fairness, given the many seemingly solid reasons why the dollar should have collapsed over this time, you can't blame them for keeping at it. All that these gurus lack is a proper understanding of an incipient deflation's role in, as Hoye puts it, causing the senior currency to strengthen. Would it be churlish of me to end today's commentary by pointing out that, even if North is right about inflation, he will only be right for a little while? That’s because the wholesale bailout of debtors around the world that North and most others expect would require not an administered inflation but an administered HYPERinflation. After all, we are talking about remedying the deflation of a global debt bubble amounting to hundreds of trillions of dollars, not some piddling, trillion-dollar S&L bailout. Nearly anyone can understand why the resulting hyperinflation – which, by definition, is unsustainable -- could end only in deflationary collapse. Anyone, apparently, but North and his inflationist cohort. I’ve made this point a dozen times before but have yet to elicit a response, much less a rebuttal, from North or anyone else.