Deflation spiral is coming...

[intradaybill]

Quote from Scataphagos:

Would be surprised if anything like that occurs.

More likely, markets rally on "ECB money pump"... just like they have in the US. Faith in ECB likely to keep any crisis at bay for 2-3 years or longer.

Don't be surprised. Actually it will be one more breakup in the long history of European attempts for unification. The peoples there are so different and so fanatic about their own race that such unification is impossible.

US market will rally if EU breaks up. It will signal the beginning of another 100 years of dominance of US over these clowns.

 

[Crispy]

Bi-flation is here already

Inflation in the things you need.

Deflation in the things you dont.

 

[plyka]

Quote from MasterGambler:

What can the fed do to fight it?

Well have to start printing money for real instead of just injecting liquidity... Inflation levels are dropping like a rock at the moment.

http://www.shadowstats.com/alternate_data/inflation-charts

You people make zero sense. Governments are not all powerful. They cannot "stimulate" the economy, unless they stimulate it by cutting spending and regulations. They can't give everyone free healthcare, or free anything for that matter. They cannot do anything well.

But the one single power they have which cannot be refuted is the ability to make their currency worth less (inflation). The dollar is a fiat currency. They control the supply. The FED has been buying 60% of the bonds the government has issued over the past few years. They can purchase bonds, even more, they can purchase mortage bonds, they can even ppurchase car/credit card loans. Believe me, the private and public debt in the USA dwarfs the amount of real money in the system. If they don't watch out they will do exactly what you seem to think not possible and cause REAL inflation, and by real inflation i mean making the dollar completely worthless.

The funny thing is that you seem to be afraid of deflation. Deflation simply means that your money buys you more things. Not sure why that's so scary. Unless you have too much debt.

 

[oldtime]

Modern Monetary Theory states that we can create as much money as we need, the only constraint being inflation.

And congress has also told the fed not to worry that much about inflation if creating more money will reduce unemployment.

What I can't understand is why congress wants everybody to be employed by someone else.

I had a job once, it really sucked.

Much better to be in business for yourself.

I could get a little more enthused if congress told the fed, the goal is to get everybody unemployed and in business for themselves.

 

[MasterGambler]

Deflation spiral: Banks go under, countries go under... Bad news. Gold and silver goes to the moon.

Inflation spiral: Everything within the system stays stable for a lot longer... Gold and silver rises slowly and steadily.

Quote from plyka:

You people make zero sense. Governments are not all powerful. They cannot "stimulate" the economy, unless they stimulate it by cutting spending and regulations. They can't give everyone free healthcare, or free anything for that matter. They cannot do anything well.

But the one single power they have which cannot be refuted is the ability to make their currency worth less (inflation). The dollar is a fiat currency. They control the supply. The FED has been buying 60% of the bonds the government has issued over the past few years. They can purchase bonds, even more, they can purchase mortage bonds, they can even ppurchase car/credit card loans. Believe me, the private and public debt in the USA dwarfs the amount of real money in the system. If they don't watch out they will do exactly what you seem to think not possible and cause REAL inflation, and by real inflation i mean making the dollar completely worthless.

The funny thing is that you seem to be afraid of deflation. Deflation simply means that your money buys you more things. Not sure why that's so scary. Unless you have too much debt.

 

[oldtime]

Quote from MasterGambler:

Deflation spiral: Banks go under, countries go under... Bad news.
Inflation spiral: Everything within the system stays stable for a lot longer...

apparently you weren't trying to make a living in the 1970's.

Of all the curses God ever inflicted upon mankind, inflation is the worst, nobody can get ahead, not the rich and not the poor.

The best you can do is borrow and hope it just keeps continuing.

It really, really, really is bad, even if you think you are getting ahead when you adjust it for inflation you are at best just breaking even.

No, inflation is really bad, both for you, me, and everybody.

A little aint no big deal, but you start letting it take over and there is Hell to pay.

 

[jem]

Quote from MasterGambler:

Deflation spiral: Banks go under, countries go under... Bad news. Gold and silver goes to the moon.

The bi flation comment is pretty reasonable.

The shadowstats chart you linked to does seem to follow oil. But that does not mean that I do not think there is inflation and deflation at the same time.

The cost of real estate is really at the heart of fed policies. The fed is trying to inflate the price of Commercial and Residential real estate.

If they do not... their member banks go under. Res and Commercial showed signs of life recently... but it is already starting to slow down.

 

[piezoe]

Quote from plyka:

You people make zero sense. Governments are not all powerful. They cannot "stimulate" the economy, unless they stimulate it by cutting spending and regulations. They can't give everyone free healthcare, or free anything for that matter. They cannot do anything well.

But the one single power they have which cannot be refuted is the ability to make their currency worth less (inflation). The dollar is a fiat currency. They control the supply. The FED has been buying 60% of the bonds the government has issued over the past few years. They can purchase bonds, even more, they can purchase mortage bonds, they can even ppurchase car/credit card loans. Believe me, the private and public debt in the USA dwarfs the amount of real money in the system. If they don't watch out they will do exactly what you seem to think not possible and cause REAL inflation, and by real inflation i mean making the dollar completely worthless.

The funny thing is that you seem to be afraid of deflation. Deflation simply means that your money buys you more things. Not sure why that's so scary. Unless you have too much debt.

You have it backwards. Deflation is a disaster for those in debt. It means they will pay their loans with dollars worth more in buying power than the dollars borrowed, it's equivalent to raising the interest rate they pay. Deflation is great for those that are debt free and sitting on a pile of cash.

This is the reason the Fed will not allow deflation to take hold in the U.S.

Also, currently the proportion of Treasuries bought by the Fed is ~20%, not 60%.