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To: gregor_us who wrote (15810)	10/25/2008 9:40:59 PM
From: jackjc	Respond to of 29622

Helpful analysis. Rick Rule recently reported that the response to the housing bubble is creating a T-Bond bubble which is soon to crack. Can you comment on the quantitative balance others have reported as to $60T destroyed by world defaults (inc stock mkt declines which are not objective losses, as they never were monetized, just perception) vs $7T creation by world govs in response. Does this large ratio give deflation the upper hand thus far ?? I am in the inflation camp, have seen nothing else during my 75+ yrs.

To: gregor_us who wrote (15810)	10/26/2008 1:03:12 AM
From: Aloysius Q. Finnegan	Respond to of 29622

"The private sector of the US is emitting some deflationary pressure. As I have written elsewhere, the choice is between whether an economy will experience an overall paradigm of inflation or deflation. Inflationary or deflationary pressure is subordinate to the overall paradigm. My view is that since the Great Depression, the paradigm has been inflation. But, we have deflationary flare-ups/pressures along the way. We're getting one of those now." I appreciate your enlightened response. Perhaps the above statement best describes "stagflation". An inflationary response by the government amidst decreased production and growing unemployment.

To: gregor_us who wrote (15810)	10/26/2008 2:18:27 AM
From: pogohere	1 Recommendation Read Replies (3) \| Respond to of 29622

I believe the issue of monetary velocity doesn't get enough attention. I'm in agreement with what you have written as far as it goes. However, my attention has been drawn to the issue of how to recognize when the tide turns from low velocity in the US$, i.e., it is desirable/advantageous to obtain it and hold it during a credit crunch (its relative value rises vis a vis other currencies), to high velocity i.e. when it is desirable/advantageous to spend it as fast as possible because it is apparent its purchasing power is falling. This is an aspect of inflation that I have previously ignored. There can be enormous currency printing, but if velocity is very low the increased liquidity can have quite a lagged effect. I think it is important to recognize this and not invest as if the effect of the currency printing will have a very near term impact. How will we know when there is a change in monetary velocity? I don't know, but there are signs that $US holders are getting restless: U.S. has plundered world wealth with dollar: China paper Fri Oct 24, 2008 6:14am EDT reuters.com What we are waiting for now is very simple. At some point, the present upside rampage of the US Dollar will come to an end as the demand for it to go on deleveraging dwindles and then dies. At that point, the present hugely artificial demand for US Dollars will literally vanish into thin air, leaving the Dollar suspended in mid air without a parachute. As "Bugs Bunny" once said, after landing like a snowflake after plummeting from miles high without a parachute - "you can do anything in a cartoon!" Message 25109438 Message 25109651

To: gregor_us who wrote (15810)	10/26/2008 2:25:21 AM
From: NOW	Respond to of 29622

tell that to folks portfolios

To: gregor_us who wrote (15810)	10/26/2008 4:19:54 PM
From: Jim McMannis	Respond to of 29622

most excellent...

To: gregor_us who wrote (15810)	10/26/2008 6:02:13 PM
From: ecrire	Respond to of 29622

In the meantime world deflationary pressures are spreading like wild fire, e.g. Poland, Hungary, Turkey, Iceland, Argentina, Mexico, even Brazil...industries unable to roll over hard currency debt.Baltic Dry Goods price index crashing, commerce near standstill.Seems to me, for the time being.these crises overshadow everything else unless the IMF rescues the hard currency debtors.

To: gregor_us who wrote (15810)	10/27/2008 11:56:11 AM
From: TH	2 Recommendations Respond to of 29622

Posts like this are why I've had you peoplemarked for years. I hope you post more. Also, the posts over the past few days on this thread proves that you can have a constructive debate on inflation/deflation. I do not think that topic is a waste of time, but rather the central issue at hand. GT TH