>>actually i think schiff goes into why people won't want the dollar quite often. the gist of it is that the dollar is being devalued as a matter of policy. as more and more people begin to see that, more and more of them will want out of the dollar and it will become the world's hottest potato.<<
but their value is being increased due to the previous policies, too.
i think what it boils down to is that, under our current debt based monetary system, one has to decide if society can continue to take debt parabolic well into the future.
look at the 2nd chart here...
market-ticker.denninger.net
peter sees that graph resuming its parabolic assent well past the NINJA loan days - because the only way to increase the money supply is to create debt.
even with all the MASSIVE debt creation used to pay off banker losses, credit is still contracting.
i see it continuing to contract and i also see it becoming more difficult to simply hand over trillions to criminal bankers.
peter has done nothing to convince me credit can resume its parabolic assent and his "hand out $10k to every person in the nation" is nonsensical given my world view (based on empirical data) that the financial elites control money and credit will have no problem squeezing the h*ll out of the american people.
>>but schiff also made other distinctions. he was talking about nominal dollars deflating in value or inflating in cost. he said he would agree with you if you referenced value to gold instead of dollars. in other words, he thinks gold will go up faster than general prices.<<
if peter's assertion that the dollar is devaluing and that's propelling gold up were true, other commodities would be zooming up, too. silver is still less than 40% of its nominal 1980 high of $50. gas is 45% off its highs (albeit short lasting). we just saw the worst june for home sales in 47 years of record keeping - expect prices to continue to fall. and this is at record low interest rates and $1.5 trillion in deficits.
wait until rates move up and that deficit comes down - it will be BRUTAL. defaults will go parabolic, not credit creation. the velocity of money will scream to a halt as scared people stop worrying about i-phones and start worrying about eating.
i believe gold is going up for the same reason that i paid off my house - people are losing faith in a bankrupt financial system that can't handle the massive deflationary depression that is about to hit it. they see bank closures, stock market collapses or shut downs and they want their wealth protected from such events. i sure do.
silver doesn't work for these rich folks b/c it is too bulky, hence the demand has been light. this is even more true of copper, etc.
again, reference that 2nd chart in the above link - inflation DEMANDS that credit resumes it parabolic assent... do you *really* see credit going parabolic relative to the 2006 NINJA loan era? imho, that era is LONG GONE and it is credit contraction time.
inflation and net credit contraction are like oil and water - they don't mix.
>>and to be a little more accurate he said roughly "IF the supply of goods falls faster than the money supply, then price inflation will result." but i agree with you that demand could still fall faster than supply and thereby lower prices. so one doesn't necessarily bring about the other.<<
it sounds like he's looking for reasons to support his conclusions instead of analyzing the data and then reaching a conclusion.
>>on your point number 3 regarding lending, the reason he doesn't state why it's not happening is because to him it's not important, as it is to you. the important thing to him is that it is indeed happening and how to protect yourself. his clients welfare is what's important to him, not punishing who's ever responsible, like you want to do.<<
the key point is that peter is claiming that this irresponsible lending (biggest credit bubble in history) followed up by very targeted bailouts to insolvent institutions will result in serious inflation going forward. i disagree that is the case - i think it lead to bubble prices and the insolvency of a vastly larger group of people called the naive, gullible and greedy american citizenry - and they won't be bailed out.
the disaster to society is simply greater than the bailouts to the insolvent banks who need the cash in order to pretend they aren't bust.
that 2nd chart bears this point out.
trillions in debt are being manufactured and the proceeds given to banksters and credit is still CONTRACTING. we are another 20 months closer to when that debt manufacturing process will be forcibly turned off.
i can see it already - guys like peter will be blamed for the deflationary depression. the greatest depression of them all - the one that takes out and shoots the american middle class once and for all.
>>if he gets elected he will work to implement free market solutions which by necessity ends most of the corruption and tampering that's now taking place.<<
i think peter is a good guy with good intentions. we should have listened to him 15 years ago. now it is too late - damage is done. he will work to minimize the sinking of the USA Titanic, but this mother is still gonna sink.
>>he didn't say that $5k, $10k will go to every tax payer. he said that carried on for long enough he wouldn't be surprised to see something like this happen. he was just trying to point out the absurdity of what we are doing.<<
but that isn't want they are doing. under the current system of debt backed money and TBTF banks (not nations - nobody says that!), it won't happen. imho, peter should know this.
even if it did, society would be poorer immediately. one does not become more wealthy when they spend their credit card - they become less wealthy.
this is why i call out debt based money as the financial crime that it is.
MONEY IS DEBT. DEBT IS MONEY.
car note, house not, federal reserve note - all DEBT! all accruing interest!
>>and he didn't actually mention the cpi. he just asked the woman if she noticed that prices other than housing were going down. she said 'of course not'. prices in general don't seem to be falling yet, even though there are short term fluctuations in just about everything.<<
take a look at that credit chart again... note that i believe credit will likely fall to 40-75% of its current value.
get back to me at that point and then we'll check prices again. ;-)
that's equivalent to a financial atomic bomb blast. denninger thinks 40% of gdp will have to disappear to normalize. he won't be exactly right, but i will bet he's closer to the number than a 0% decline in GDP. even a 20% decline will be BRUTAL.
>>i appreciate that you took the time to listen to the podcast at all. most people wouldn't have done it. but you seem to have been in a little bit of a hurry and misread some of what he was saying.<<
technically, perhaps, but i got the gist of his ideas as he laid out. he laid them out in support of his thesis. he mentioned those items b/c he felt they were relevant. i addressed them as such.
??and like you i felt deflation was coming first. i still don't know. you might be right. but what schiff said made sense to me. however, i still consider it a strong possibility that we might not have any meaningful price deflation overall.<<
only if that credit chart begins to go parabolic.
i don't have the link to the recently updated chart, but i believe it showed a slight down trend - with all time low interest rates and $1.5+ trillion in TERMINAL government deficits.
both of those will change at some point. the deficits will be reduced - obama is already talking baout 2011 for when the "tough choices" are made. once it becomes apparent that americans are truly debt saturated, the financial vultures will jack up our interest rates and squeeze us in an effort to rake maximize their asset stripping - their sheep sheering wool, as it were.
i hope peter and rand get elected. i like most of ron paul's ideas (not all). i don't like their their belief that gold money is the solution - it isn't. we had plenty of depressions with gold backed money.
our current system was set up to avoid these problems, but congress, the president and the press allowed the federal reserve to butcher the federal reserve act law and take credit aggregates parabolic to GDP.
that's why we are here - that doesn't happen and we aren't in this mess.
like you, i don't exclude some kind of dollar devaluation, but i see it devaluing against the world's reserve currency - and that is still the dollar for now. once it is replaced as such, then the buck could be butchered beyond all recognition and the financial elite will have their money in the new currency.
right now, imho, the financial terrorists are simply trying to balance the world's currencies and make some cash trading them to facilitate their state treasury looting operations. the time for IMF riots will come, but after the private banks have looted every last dollar possible from society and society is consigned to poverty and reliant on our new feudal lords and their new authoritarian government... you know, since "capitalism" and "democracy" (really, constitutional republic) failed so miserably. of course, that's a lie, but that will be their talking point as they (their planned crisis, our reaction, their planned solution) anoint themselves the world's rulers.
usury is their chain of bondage - and muslims understand the evil of usury.
do the wars against muslims make a bit more sense now? |
