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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (503)	11/11/2009 8:47:46 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 621

"It does seem that USA people and their governments have been living beyond their means and to quite a large extent and have built up expectations of entitlements which can't realistically be met. " That's been the case at least since the year 2000 if not well before. Americans tried to maintain the standard of living that they had become accustomed to over previous decades by substituting debt for income. That works for only so long. And then it doesn't work at all, and then you spend your money servicing that debt. Or go into default. "The US$ has already taken quite a pounding. Having been a commodity salesmen, I know that it doesn't take such large shifts in pricing to make a big difference to sales, so exports should be booming. " That would be great if we were still a manufacturing powerhouse. But we're not. The bulk of our exports now have the profile of a third world nation. Raw materials, fiber, ag products, coal. America's greatness as a first world manufacturing power has been pissed away, in obeisance to the god of post-nationalism. "Big Ben's talk is of withdrawing the deluge of money at some stage, at just the right time, when the downward risk has ameliorated a bit more. There is a LOT of money to rewind so that process will be interesting." The Fed is sitting on nearly half of all the Treasury debt that has been issued since the crisis began. When they decide to fight inflation they'll be selling those T-bills into the banking system to soak up as much high-powered money as they can. Good luck to the Fed in guessing when the right time comes to do that. The gold market already thinks it's much too late.