U.S. Inflation to Approach Zimbabwe Level, Faber Says

[Dr. Zhivodka]

The wife and I got Swiss/EU passports 5 years ago. I'm gonna move in right next to him and then act totally stereotypical American. Put a few cars up on blocks and have about 30 satelite dishes up on the roof of the flat. Gonna hire about 25 domestic help and make sure they bring all their babies and all their cars to park up and down the strasses

I'll have him crying like a baby in no time.

Quote from Cutten:

"100% sure"?

What odds is Dr Faber offering, I'd quite like to take the other side of that trade. I'll even offer him 99-1 odds instead of infinity/100-0.

 

[Debaser82]

Quote from Dr. Zhivodka:

The wife and I got Swiss/EU passports 5 years ago. I'm gonna move in right next to him and then act totally stereotypical American. Put a few cars up on blocks and have about 30 satelite dishes up on the roof of the flat. Gonna hire about 25 domestic help and make sure they bring their babies and cars to park on the strasses

I'll have him crying like a baby in no time.

He lives in Thailand.

 

[piezoe]

Quote from makloda:

A little reality check for the Shadowstats non-sense: According to his numbers the US has been in a constant recession since the 1980s as real GDP (using his CPI) was constantly in negative territory -- which of course is a ridiculous conclusion.

For a more practical inflation analysis consider Shedlock's Case-Shiller modified OER CPI: http://globaleconomicanalysis.blogspot.com/2009/04/cs-cpi-negative-50-third-straight-month.html

The CS OER-adjusted CPI is now in deeply deflationary territory.

"According to his numbers the US has been in a constant recession since the 1980s as real GDP (using his CPI) was constantly in negative territory -- which of course is a ridiculous conclusion."

I'm not convinced Williams numbers based on the 1980 Government formula is as "ridiculous" as you say. Since the Government has succeeded in making inflation disappear, why would you think it ridiculous if the Government were also to make a recession disappear using calculation and massive borrowing?

Spending borrowed money is fun until you have to repay it, or in the Government's case, monetize you debt.

The current Official Government CPI is negative 0.8%. Is that "deeply deflationary territory"?

I've never been much entertained by science fiction, it bores me. I much prefer reality.

I'm certainly not expecting "hyperinflation" any time soon, just plain old fashioned double digit inflation (by the 1980 formula). The U.S. has the rest of the world, which is awash in dollars, over a barrel!

 

[Dr. Zhivodka]

Well fuck it then...I'll take my act to Thailand.

And then deny him all of his pre-pubescent boy consorts(IMHO). Regardless ...he will pay for his insolence.

Quote from Debaser82:

He lives in Thailand.

 

[Debaser82]

From Faber's latest newsletter:

The crux of the problem most deflationists do not understand.

By keeping short term rates artificially low and by monetizing the growing fiscal deficits a central bank digs its own grave in terms of its ability to pursue tight monetary policies when such policies become necessary. Why?

I explained that the US Treasury and the Fed are attempting to offset the private sector credit contraction through fiscal deficits and monetization. The problem may, however, be that there is already excessive leverage in the private sector because the central bank may have previously kept interest rates artificially low (read the period between 1997 and up to this very
date). In case there is excessive leverage in the system, it is likely that the economic contraction will be accompanied - or more likely will even have been caused - by the inevitable collapse in asset prices.

If the US Fed failed to tighten monetary policies after the US economy began to recover in November 2001, what are the chances of tight monetary policies in the future (which would significantly increase in the short run the cost of
servicing the government’s debt) when both the US government and the Fed will be loaded with toxic assets and burdened by all kinds of other liabilities?

The chances of the US government implementing tight monetary policies in the next few years are exactly zero.

 

[Cutten]

Quote from Dr. Zhivodka:

The wife and I got Swiss/EU passports 5 years ago. I'm gonna move in right next to him and then act totally stereotypical American. Put a few cars up on blocks and have about 30 satelite dishes up on the roof of the flat. Gonna hire about 25 domestic help and make sure they bring all their babies and all their cars to park up and down the strasses

I'll have him crying like a baby in no time.

IIRC he lives in Thailand.

 

[Random.Capital]

Quote from Daal:

There will be some monetization but faber is just saying what his target audience of fed bashers wants to hear

Sounds about right, as Faber is basically a shill.

People in the West will start dropping dead from starvation long before the inflation cycle can kick up in earnest. Still don't understand why so many people have a problem understanding that you cannot draw conclusions about THE global currency from what happens in an ass-backward place like Zimbabwe.

 

[Debaser82]

Quote from Random.Capital:

Sounds about right, as Faber is basically a shill.

People in the West will start dropping dead from starvation long before the inflation cycle can kick up in earnest. Still don't understand why so many people have a problem understanding that you cannot draw conclusions about THE global currency from what happens in an ass-backward place like Zimbabwe.

1. Why is that?

2. Zimbabwe was Africa's breadbasket before they crashed their currency and turned the place into a living hell.

But wait, that couldnt happen to the US right.


After all, we have our unshakable democratic constitutions, very honest government officials, far-sighted economic policy makers, a Christian religion, an irreplaceable Caucasian race, and most of all, we have outstanding academic skills in terms of our superior ability to comprehend, invent and innovate - in particular in the for humanity crucial field of new financial products and cutting edge financial technologies.

©Marc Faber.

 

[gigsup]

Quote from Random.Capital:

Sounds about right, as Faber is basically a shill.

People in the West will start dropping dead from starvation long before the inflation cycle can kick up in earnest. Still don't understand why so many people have a problem understanding that you cannot draw conclusions about THE global currency from what happens in an ass-backward place like Zimbabwe.

Comedy of errors at the fed and bailout city have opened them up to mockery from sources outside the US. You are surprised?

 

[JJacksET4]

What a joke. Inflation is one thing, but come on. BTW - fear mongerers always forget to point out the good in inflation - people could easily pay off their home, car and other loans. Think about it - multiply your income and some expenses by 10 fold, except the mortgage, car payment, other loans, etc. would not go up. That would actually be good or even great for alot of people. Not saying it's going to happen though.