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To: TH who wrote (258236)	7/2/2010 7:14:10 PM
From: Skeeter Bug	Respond to of 306849

>>That is the real driver and there is no solution possible, for no one will really cut the spending and entitlements in any meaningful way.<< i'm not convinced of this. the bankers have a real big incentive to do exactly this. the politicians do not. it all depends on who is calling the shots - and i believe the bankers are in complete control at this point in time. now, if they are able to peg the dollar to something else and the wall street banks move out of the dollar, then all bets are off. they want to do this, but i don't think it happens quickly. they may force the deflation first and then, after spending their pretty digital dollars buying assets for pennies on the dollar, create some serious inflation. i've observed in history that the american banker "sheer the sheep" game is typically inflation -> deflation -> buy assets cheap -> inflate -> sell assets at full price, wash, rinse, repeat. see "the money masters" on google videos for said history. i could be wrong - i am often. but i haven't seen anything to indicate inflation is a worry. gold going up alone doesn't signal inflation to me at all, it signals rich people with paid off home(s) are looking to get their cash out of the collapsed banking system. gold is the place they've chose - and rightly so. however, perception of inflation may remain at some level as the banker losses are back stopped by the trillions. this isn't new money as much as it is back filling the smoldering hole of banker bankruptcy. no matter how much money they print, the associated debt is always greater - we are getting poorer and poorer as they take on more debt. pulling in more and more future demand so that future demand is dramatically reduced. we'll see - and we have a lot of excellent analyzers on silicon investor to work through this real time. a lot does depend on decision as of yet implemented, but i wouldn't be too quick to gamble on what those decisions are just yet. i can't get a serious deflationary depression that just rips the face off of J6P out of my head - and even i hope this view is not correct. i know you are nimble on your feet, though, so you will be fine, if not do very well (but make sure if we really crash that your counter party pays what they owe you). with $600 trillion, at a minimum, out in derivatives (over 10x world GDP), a complete collapse of the banking and markets is not out of the question.

To: TH who wrote (258236)	7/2/2010 7:57:28 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 306849

TH, correct me if i'm wrong or missing a nuance but, ultimately, supply and demand set prices. if raw materials go up 3 fold and US wages get cut in half, that's a 6 fold increase in prices. america's economy would shut down well before we got that to that point. given that we are the world's economic engine, the commodity producers would either have to lower prices at some point or go bust. my guess is they lower prices. yes, the buck is devaluing in the sense that money is being created and given to a special interest (and the associated debt being given to society), but i don't see how pricing power sticks as american society won't be able to afford items and we are an engine that drives the world's economy.