PatriotsReign

I found this article very interesting. But deflation in the US pales in comparison to what's happening in Japan.

"Core inflation for factory goods in the US fell to minus 0.6pc in October from a year earlier, edging the country closer towards Japanese-style deflation despite massive monetary stimulus.

Janet Yellen, the head of the San Francisco Fed, said emergency measures had prevented the US economy from sliding into a “black hole of deflation”, insisting that it is still far too early to talk of tightening policy.

A combination of “enormous slack in the economy” and fading fiscal support raised the risk that prices could fall below the Fed’s safe level. “It seems probable that core inflation will move even lower over the next few years,” she said."

Mish's Global Economic Trend Analysis: Deflation Returns To Japan; Black Hole Madness In U.S.

__________________
"No one walking this earth knows what is truly righteous"

PatriotsReign

I guess all the INFLATIONISTS out there have nothing to say....

Just what I thought!

__________________
"No one walking this earth knows what is truly righteous"

maverick4

No need to self servingly bump your own thread, especially when you're going to disappear once inflation occurs.

Over the summer, I already said we may see deflation for maybe half a year, but that hyper inflation is coming soon after.


This isn't major news you're trying to thump your chest over.

Real World

I'm not sure you can look at anything in the short term, or current, and forecast it as a long term trend. I feel that inflation is a potential problem, but this is territory, or an environment, we're simply not used to seeing. I'm not sure many people really know what to expect moving forward. I know I don't. What will happen if the commercial real estate market crashes as some expect it to? Where is the dollar going to be moving forward? Will fuel demand remain low, and what effect will the dollar have on it's cost? Then of course, there's that three letter word, J-O-B-S. We're in a bad spot, and the only thing I can say for certian, is that it's not a good one.

__________________

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

maverick4

Just look at the interest rates.

It is inevitable that they start to SPIKE big time, the Fed can't stop it, they've used all their tricks already.


There is no way you can stop inflation from happening at this point. We have FLOODED the world with more money supply, when demand isn't even that good anymore.

Real World

Interest rates do scare me mav.

__________________

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.


"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

PatriotsReign

I've never "thumped my chest" Mav. Anyone who does so is an arse. This article says deflation is here for the foreseeable future.

Mav, just an FYI, but the REAL money supply has DECREASED significantly. Just because the fed pumps money into banks, does not imply an increase in money supply.

I've explained this a few time, but I'll do so again. If the fed or the gov't prints money and gives it to companies just to write down bad loans or debt, the result is that the money disappears. If I give you money to write off 100 bad loans, all it does is balance your income statement. The net effect upon you personally is nothing.

If you look at almost ALL the money the fed and our federal gov't has given away, it is only to replace lost revenue or negative balance sheets.

Let's say the gov't decides to give everyone another stimulus check this spring. If no one spends a dime of it or if it's used to pay down debt, it has no effect upon the money supply.

If it did affect the money supply, we'd have already seen a bump in consumer spending...and we really haven't. It's the old saying "people can't spend what they don't have". and right now, the average Joe has very little.

__________________
"No one walking this earth knows what is truly righteous"

PatriotsReign

FYI Mav....The MONEY SUPPLY IS DEMAND

__________________
"No one walking this earth knows what is truly righteous"

maverick4

The rest of the world knows that you printed the money though, and that each dollar is worth less. It simply hasn't been reflected yet, but the overall value of each dollar is worth MUCH less than 2 years ago. Global demand for dollars is less too, not more or the same as you claim.

PatriotsReign

Yet, you did say "the money supply has increased"? The fact is, the money supply is DECREASING. Why? you may ask...I'll tell you why then. It's because CREDIT is disappearing. People are losing their credit cards left & right. Others (millions of them) are having their limits reduced AND their interest rates INCREASED. This all REDUCES the money supply and thus, demand for goods and services.

Interest rates will not increase any time soon because there is little demand for credit. No one wants money they can't pay back and banks don't want to lend to people who aren't super-qualified.

I just had the limits on 2 major credit cards cut in half. On top of that, they raised my interest rates to almost double what they were. I have no debt and I pay my balances in full. But the BIG thing I'm missing is "Assets"...and that is the key reason I'm going to buy a house very soon. With home values still declining, why would banks want to extend credit?

Currencies increase and decrease in value regardless. As of today, Japan's currency should be worth the least because they've printed the most money as a percent of their GDP (according to your statement). If the US economy picks up before the rest of the world, our currency will increase in value regardless of how much money we've "printed".

If US currency is so lowly valued, then we should all be paying more for goods and services...but that hasn't happened. Even goods from China have DECREASED in cost to US consumers...so how's that theory working now?

__________________
"No one walking this earth knows what is truly righteous"