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: kingfisher who wrote (55947)	3/15/2006 3:09:34 PM
From: shades	Respond to of 110194

Japanese governments essentially SOCIALIZED all of the losses inherent in one of the greatest financial bubbles ever experienced. They feared deflation more than debt Hehe - hold up - Vosilla just wrote that we learned from the past and have an ownership society that isn't socialized!!

To: kingfisher who wrote (55947)	3/15/2006 3:40:28 PM
From: GraceZ	Read Replies (2) \| Respond to of 110194

In the thirties US deflation people's money savings were destroyed when 100s of small banks went bust setting off a chain of reactions that resulted in ever declining asset values while everyone tried at once to convert illiquid assets to currency. In Japan, money savings never got destroyed because the Japanese never lost faith in their banks even while the value of their real assets and financial assets dropped relative to any debt they owed, their money savings remained and became worth a little more each year. In fact, they continued to plow money into low yield savings accounts year after year essentially sidelining the money that the BOJ created trying to get people to spend! It shouldn't be any more difficult to adjust to declining prices at a steady low rate than it is to adjust to a low steady rate of inflation. What kills people is a rapid change in the inflation rate or a rapid change in the rate of deflation. The dislike our Fed has for deflation has to do with their fear of losing control of the money supply. If you ask me they should never have been given control of it in the first place but such is the fear of another Great Depression. Even while it is widely accepted that the Fed caused the first one the powers that be want them to save us from the next one.