Welcome to PatsFans.com

Is hyper-inflation coming?

Discussion in 'Political Discussion' started by Tunescribe, Feb 13, 2011.

  1. Tunescribe

    Tunescribe PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Oct 21, 2004
    Messages:
    16,240
    Likes Received:
    232
    Ratings:
    +494 / 5 / -10

    #61 Jersey

    People like Porter Stansberry, etc., are making some pretty dire predictions about what's just around the corner re., the dollar tanking and the U.S. getting plunged into deep depression by hyper-inflation. Anyone here have any insights on what protections (if any) are built into the system presently? Or is there genuine reason to worry? It's hard to discern what's really just scare tactics and whether our monetary system is ripe for a collapse of unprecedented proportions due to national debt. Just curious what others here think.
  2. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    This is a very real possibility. The government has printed a trillion dollars and funnelled it to the banks in exchange for their toxic CDS an mortgage backed securities. This in addition to the TARP and corporate bailouts. With QE2 another 3/4Trillion was released. Under normal circumstances this would deflate the dollar drastically, and you can remember the outrage by Europe and especially by China when the govt did it. It prompted the urgency of the visit recently. Our banker came to town to make sure we were paying in real money. Serious stuff.

    Right now there are some mitigating factors. Americans aren't spending. They aren't buying homes, (or cars as much0 and are putting off all but the most necessary major purchases. Instead they are paying down their debt and deleveraging themselves. (there is a hint here...) This is in effect taking that money out of the supply as the government has been pouring it in.

    This upcoming budget battle is of the highest importance. It is imperative that the debt ceiling is not allowed to rise and that some real cuts, serious bigger cuts than even Rand Paul is proposing be accomplished. If this can is allowed to be kicked down the road again, then it is likely we could look at a double dip stock drop, and this time it could be accompanied by stagflation. Weimar levels are possible, but doubtful, at this point.

    Here is an article that adressed this stuff back in Nov.

    Quantitative Easing: It's Sinking the Fed's Status - Robert P. Murphy - Mises Daily
  3. IcyPatriot

    IcyPatriot ------------- PatsFans.com Supporter

    Joined:
    Sep 13, 2004
    Messages:
    38,134
    Likes Received:
    302
    Ratings:
    +611 / 4 / -12

    #87 Jersey

    FT.com - Markets Data - Commodities


    • [FONT=times new roman,times]heating oil +41%[/FONT]
    • [FONT=times new roman,times]copper +59%[/FONT]
    • [FONT=times new roman,times]silver +91%[/FONT]
    • [FONT=times new roman,times]palladium +212%[/FONT]
    • [FONT=times new roman,times]corn +91%[/FONT]
    • [FONT=times new roman,times]wheat +79%[/FONT]
    • [FONT=times new roman,times]cotton +143%[/FONT]
    Central Banks Now Creating Hyperinflation?
  4. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    Nice links and here is where the tires meet the pavement.

    The problem here is compounded by an increasingly dependent population on the public dole. As the new budget is discussed and debated, and without massive tax hikes across the board (they are obviously off the table now), the two other options are to make significant cuts in the budget, especially the big three, (Europe has started doing this, and these austerity moves have resulted in riots in the streets. The pols look at this like the third rail, for it will surely by political suicide) or, to create more money and allow it into the supply to offset the debt. This will result in far worse inflation than we saw in your link over the last year. Funny how the two rounds of "easing" have resulted in these inflationary effects. With a higher debt ceiling and no cuts, and no increases in revenues via taxes, this cannot be the end of the printing cycle or the inflation it creates.
  5. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

    Joined:
    Jan 4, 2005
    Messages:
    24,659
    Likes Received:
    67
    Ratings:
    +130 / 7 / -13

    A bloated government is killing the economy. Bernanke is figuring out it is game over for the shell game of the spenders.

    News Headlines

    from his prepared text


    BTW we are using 40% of the corn we grow to make ethanol to supposedly solve a non existant problem (MMGW).
  6. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

  7. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

    Joined:
    Jan 4, 2005
    Messages:
    24,659
    Likes Received:
    67
    Ratings:
    +130 / 7 / -13

    the pyramid for the house of cards:

    [​IMG]
  8. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    "Tax the RICH!!!" activist leftist response in 3..2..1..
  9. Titus Pullo

    Titus Pullo Banned

    Joined:
    Dec 31, 2009
    Messages:
    2,613
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    lulz

    Ah, no. We expand (granted, foolishly) ethanol because of a very real problem (man-made global resource depletion).
  10. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

    Joined:
    Jan 4, 2005
    Messages:
    24,659
    Likes Received:
    67
    Ratings:
    +130 / 7 / -13



    There is no global resource depletion see the thread this week on energy for an explanation. There is the MMGW scam and the eco lobby which opposes homo sapiens using energy.
  11. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    That was a nice treatise on the subject. Not to hijack here.

    Back to the Weimar, er Federal debt and inflation subject.
  12. Titus Pullo

    Titus Pullo Banned

    Joined:
    Dec 31, 2009
    Messages:
    2,613
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    LOL. As if your comments in said thread nailed it shut. I saw the thread, and it was wholesale fail.

    You couldn't be more wrong. Nuclear via thorium reactors will not do much of anything.
    Last edited: Feb 13, 2011
  13. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Mar 19, 2006
    Messages:
    20,185
    Likes Received:
    228
    Ratings:
    +346 / 6 / -8

    http://www.bls.gov/cpi/cpid1012.pdf

    Last available CPI report, December 2010

    The question at present is whether the current commodities spike is speculative or tied to the so-called real economy.

    I've long assumed that oil prices would recover along with the industrial economy. Shuttered plants are reopening, and others are coming online that did not exist in 2008. Existing plants are coming up closer to using full capacity. More competition for oil, higher price for end product.

    Pesek on Roubini on food costs -
    Roubini?s Next Crisis Is Scary Food for Thought: William Pesek - Bloomberg

    Weather's not a constant, transportation costs are not constant, the diet of newly prosperous Asian nations is not a constant. So Everything Is Explained By Stimulus Run Amok may seem a satisfying conclusion, but it is by no means the be-all and end-all of the commodities spike.

    The simple connect-the-dots vision of "hyperinflation" based on a big increase in the money supply is only relevant if the money is chasing goods. So if you have a sustained move away from any and all financial markets (stocks, bonds, etc.) and toward commodities, and it is not a commodities bubble, the theory is confirmed. If not, you have a food spike, an oil spike, and a metals spike, all w/their internal logic (& with energy costs affecting all the others.)

    The future of inflation depends on whether the big slushy pile of new money can be pulled back out of circulation through rising interest rates and of course the tightening of lending... after so many people have those new jobs we don't have yet, that the possibility of late 70s style wage inflation comes into the equation (& therefore the structural inflation you need to cross over into hyperinflation.)

    I don't see anybody going begging for labor right now, however.

    PFnV
  14. PatriotsReign

    PatriotsReign Rookie

    Joined:
    Jan 15, 2007
    Messages:
    25,939
    Likes Received:
    92
    Ratings:
    +208 / 3 / -10

    The price increases you list above haven't ocurred purely due to increased demand...they are ARTIFICIALLY INFLATED.

    Artificial inflation is what our gov't excels in. They believe it's an acceptable means of "fixing" our economy. But the truth is, it's totally unacceptable. QE2 has had the effect of a commodities bubble and all economic bubbles are artificial. These price increases are not due to natural (real) demand increases or a shortage of them.

    One other factor to counter Tunescribe's opening post is that the value of the dollar won't/can't crash relative to other advanced nations' currency because the majority of them are in much worse shape than the US. Unless of course we do nothing about our rapidly growing debt. Ireland's bonds just got a "junk-rating" as one example. And the rest of Europe is teetering right there with them.
    Last edited: Feb 14, 2011
  15. shirtsleeve

    shirtsleeve Rookie

    Joined:
    Nov 20, 2005
    Messages:
    2,730
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    This is exactly correct. I should read back and see if I already said this, or not. Two rounds of QE. The banks, dispite begging from the govt, until recently, have sat on their reserves; but since the extension of the Bush cuts was announced this money is starting to go into circulation. This is a bad thing when considering inflationary influences.
    Excess Reserves of Depository Institutions (EXCRESNS) - FRED - St. Louis Fed

    But the whole thing is really simple to understand. Lets look at any commodity. If it cost a dollar to get say coffee to market, but now the government has printed enough new money that a dollar is now worth say fifty cents (its not quite that bad, this is an illustration) it now costs two dollars to get that same coffee to market. Even though the cost of the coffee has not gone up, its price has doubled. Yet salaries have not responded in a corrosponding manner. So to the average household these new prices reflect true cost to the consumer.
  16. The Brandon Five

    The Brandon Five Rookie

    Joined:
    Aug 21, 2010
    Messages:
    6,348
    Likes Received:
    50
    Ratings:
    +130 / 0 / -4

    #75 Jersey

    What will?

    Wind farms?

    Return to an agrarian society?
  17. Titus Pullo

    Titus Pullo Banned

    Joined:
    Dec 31, 2009
    Messages:
    2,613
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    Probably nothing. America is too fat and satiated to ever unify on an issue it can politicize. We'll do nothing about it.

    And, it's hardly "artificial."
  18. PatriotsReign

    PatriotsReign Rookie

    Joined:
    Jan 15, 2007
    Messages:
    25,939
    Likes Received:
    92
    Ratings:
    +208 / 3 / -10

    The key with inflation is that demand has to increase and money must be spent. If we look at today's economy and compare it to pre-2007, we'd see that the supply of money today is miniscule compared to pre-recession levels.

    Why? Because available CREDIT is almost non-existent compared to what it was. If you recall, people were spending almost every penny of their home equity and they spent more than they earned.

    Today, you have be super-qualified to buy a home and no is stupid enough to borrow on their equity even if they could get it. Now take this scenario worldwide and we find that total available credit virtually disappeared. The net effect is that disposeable income (plus available credit) has dwindled back down to where it should be.

    People forget that "available credit" adds or subtracts from the available money supply. The reason Bernanke is trying to increase the money supply is because the money supply had dramatically DECREASED.

    Unless he tries to come up with QE3 and QE4, the current levels will not create hyper-inflation....not even close
  19. The Brandon Five

    The Brandon Five Rookie

    Joined:
    Aug 21, 2010
    Messages:
    6,348
    Likes Received:
    50
    Ratings:
    +130 / 0 / -4

    #75 Jersey

    What is? You mean the threat formerly known as global warming? That kung fu is weak.
  20. Ilikehappyppl

    Ilikehappyppl Rookie

    Joined:
    May 9, 2010
    Messages:
    1,743
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0


    You mean the same rich people that ran our country into a ditch??? lmao, yeah poor rich people....don't blame them!:cool:

Share This Page

unset ($sidebar_block_show); ?>