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

To: GST who wrote (106928)	1/11/2010 1:59:38 PM
From: zebra4o1	Read Replies (2) \| Respond to of 110194

<i?Here is a hint: buying a house won't protect you at all. Why not?

To: GST who wrote (106928)	1/11/2010 4:43:53 PM
From: Skeeter Bug	3 Recommendations Read Replies (1) \| Respond to of 110194

>>Until then, there is only one enduring trend for the United States -- inflation.<< then enlighten me b/c i don't see it. inflation means that there must be more money in the system. money is debt, yet debt is dropping. that means money is dropping, too. money is debt. yes, this includes the $1.8 trillion annual deficit by the government. market-ticker.denninger.net even more scary, this chart doesn't include the bad debts being hidden... and that could be in the multiple trillions! we know that debts and money are declining - money is debt, after all. so, how do we get inflation with a declining money supply? we live ina fluid world, so factors change. let's discuss some factors and their impact on money supply... 1. employment is dropping fast as millions of jobs are disappearing -> deflationary. 2, Taxes are going up -> deflationary. 3. Fed to stop QE in March -> deflationary. 4. Interest rates to rise dramatically to secure money that Fed has previously printed backed by debt -> deflationary. 5. European countries set to blow before US -> marginally stronger dollar. 6. Japan set to blow before US -> marginally stronger dollar. 7. Incomes dropping -> deflationary. 8. State layoffs coming en masse -> deflationary. 9. markets at absurd levels relative to the economy -> deflationary. 10. housing still waaaay too expensive for normal times, let alone depressionary times -> deflationary. 11. Bankruptcies dramatically increasing -> deflationary. 12. Americans paying off debt at record levels -> deflationary. 13. Market speculation -> inflationary or deflationary depending on opinions and the particular market. anything that reduces debt is deflationary. if you reduce debt, you reduce money available to the economy. PERIOD. those are 13 points that argue against "enduring inflation." there is no doubt we have seen some serious inflation in the stock market. is it permanent? or is it easy come, easy go? we'll see. if the market collapses again the overall deflation will be immense - and most inflationists think that the market will at least initially crack. yes, the fed has created a lot of debt backed money, but not enough to to stop known debt from decreasing just a smidge (money supply still dropped!). guys a LOT smarter than me pound the table about hyper inflation - faber, celente, eric king and most of his guests, daniel ammerman, etc... i don't disagree with their thesis longer term, but i don't see it shorter term. i love listening to those guys because i learn a lot. other guys a LOT smarter than i see deflation hitting hard before any kind of inflation can take hold - denninger and nathan's economic edge. so smarter guys than i believe both things happen so i have to gather information and make my own decision. this leaves me with two questions. 1. how do the banks maximize their increase in wealth? 2. how can the average american take on more debt - a current pre-requisite to the money creation required to inflate? my current view is that the money printing up to this point (which didn't stop money supply from net shrinking in the US) was done solely to benefit big banks. the stock market reflation was done to benefit big banks. in short, policy up until now has been simply to benefit big banks. inflation isn't the theme, benefitting big banks is the theme. up until now, printing money and giving it to banks was done to benefit banks. the question then becomes, once the banks are holding cash instead of assets (which is the process under way - take their toxic assets and give them cash), do the big banks benefit with hyper inflation or asset deflation? i know if i had a LOT of a cash, i want to see assets deflate. the big international bankers control the money supply, not the government. they've reflated a bit to get themselves out of a jam. i think it is a mistake to be certain they will continue to inflate once they are out of the jam. if i were dr. evil and pulling the strings, i'd pull in the money supply, crash the economy, buy asstes for pennies on the dollar and then leave the serfs to pay back all the debts. after i owned the assets, i might try and inflate or i might just default on the debt and send the surfs out to fight the chinese. but i wouldn't hyperinflate as that would tend to hurt my own dr. evil position. at least not until i cracked the economy and bought up all the assets. i think the world a tad more complex than you think it is. we will know once the bankers have looted enough to feel safe that deflation won't cause their collapse - then their true motives will show. they don't mind collapses - they just want to profit off of them.