Inflation // Deflation ... why not start again?

[Spectrism]

Since we have most of the good ole players from GIM... and hopefully more old-timers will show up, for old-time's sake, why not open this topic?

I have been solidly in the DEFLATION camp since studying the ideas of Hypertiger, Carl, and others. The loss of digital money through defaults, realization of hollow bets, and an imploding economy make the deflating money supply an insurmountable problem.

My caveat to this, is that they (US Treasury & federal reserve) have to follow the rules. Since we have seen that in this Obama regime with its higher ownership controlling them, that even the US constitution is meaningless. They don't follow the rules.

Is there a wall of money ready to crash into the marketplace? Will the upcoming defaults act like a black hole to suck up any money that can be borrowed into existence? Will the federal reserve release "unborrowed" money into the system to counter this?

ed: I just saw that Carl already opened a similar topic....
http://gold-silver.us/forum/index.php?topic=379.0

[Gknowmx]

;D I will take the bait.


Show me the 'money'. Why not start again indeed, as in start auditing the FED, Ft Knox, and BIS for starters. Until then, its INFLATION all the way baby.

[Spectrism]

;D I will take the bait.


Show me the 'money'. Why not start again indeed, as in start auditing the FED, Ft Knox, and BIS for starters. Until then, its INFLATION all the way baby.


LOL- audit the FED! If that were to ever happen, people might get a little glimpse of what their "money" really is. Can you imagine the $billions that have been sent out of country by the FED?

As for inflation.... I am wondering how the money will seep into the marketplace. It sure is not coming through jobs.

Maybe we will see inflation in some areas and deflation in others. The equation is a little more complex than how many dollars are borrowed. The decrease in credit is also countered by a decrease in purchasing power (dollar devaluation).

[Trinity]

I'm in the inflation camp. It seems the government and fed are too. If the Greatest generation did it ,we can too!

Pray For Inflation -- It's Our Only Hope


Everyone thinks the Fed's job is to fight inflation, but right now the Fed is actually doing everything it can to cause inflation.

Why?

It part to help the economy get cranking again. Inflation provides an incentive for people to spend cash rather than saving it, because if they save it, the cash will lose value rapidly.

Inflation also helps solve another problem, though--our debt problem. The more inflation we have, the less our dollars will be worth. Because our debts are based on a specific number of dollars and not a specific value, the less our dollars are worth, the easier it will be for us to pay off our debts.

(Imagine owing someone 100 Zimbabwe dollars at a time when the currency is collapsing. If you wait a week, the value of the Zimbabwe dollar will have collapsed, and you'll be able to pay off your 100 Zimbabwe-dollar debt with currency that is only worth half as much as it was the week before).

The Fed can't admit that one reason it wants high inflation is to reduce the real burden of our debt, but you can bet that that's one of its objectives. What's more, says Nobel-winning economist Paul Krugman, inflation should be one of the Fed's objectives. Because that's how we've gotten out from under debt burdens in the past.

Here's Krugman:

So how did the U.S. government manage to pay off its [World War 2] wartime debt? Actually, it didn’t. At the end of 1946, the federal government owed $271 billion; by the end of 1956 that figure had risen slightly, to $274 billion. The ratio of debt to G.D.P. fell not because debt went down, but because G.D.P. went up, roughly doubling in dollar terms over the course of a decade.

In other words, after World War 2, we didn't "pay down" our debt. We grew into it.

And, importantly, this growth came from a combination of real growth AND inflation:

The rise in G.D.P. in dollar terms was almost equally the result of economic growth and inflation, with both real G.D.P. and the overall level of prices rising about 40 percent from 1946 to 1956.

So inflation is an important tool in getting us out of this mess. It's painful and unfair--those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford. But it's what the Fed is (quietly) aiming for.


http://finance.yahoo.com/tech-ticker/pray-for-inflation----it%27s-our-only-hope-464142.html?tickers=^dji,^gspc,spy,dia,udn,tip&sec=topStories&pos=9&asset=&ccode=

[Spectrism]

So inflation is an important tool in getting us out of this mess. It's painful and unfair--those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford. But it's what the Fed is (quietly) aiming for.

We are in VERY different times. This is unlike any time in history. We are on the verge of a global government where a global currency and global controls will be established. I think we need to disregard, or at least be prepared to devalue the concept that the federal reserve (and our govt) wants what is good for us.

No! The system is OWNED by the global bankers. Think about what is good for them and you can figure out what comes next.