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The Inflation Time Bomb

Discussion in 'Political Discussion' started by maverick4, Jan 17, 2009.

  1. maverick4

    maverick4 Banned

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    This is an intelligent yet sobering view about how the 8Trillion the Fed has spent in propping up an inevitable American economic collapse, will ultimately result in hyper-inflation (looking at you, PatReign). They also explain why we haven't experienced it yet (taking a look at M2 data), why we will likely see deflation for about 12 months, but that once banks start lending again (supposedly 'the recovery' period) inflation will begin to skyrocket. Something similar happened in the 1920's when the Fed printed tons of paper, leading up to the Great Depression.

    The Inflation Time Bomb -- Seeking Alpha

    Knowing this information, it really doesn't make any sense to save money anymore, it's going to be worth toilet paper in a few years...
  2. MrBigglesWorth

    MrBigglesWorth Rookie

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    so what should i do with my money? should i rack up debt and by goods?
  3. IcyPatriot

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

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    #87 Jersey


    Well ... I am no financial expert but if I didn't know better I would say Uncle Sam wants very much for people to invest in government securities as they are the safest bet of all. Let's face it ... if they aren't worth anything we're all screwed anyways.
  4. MrBigglesWorth

    MrBigglesWorth Rookie

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    it seems to me uncle sam is helping everyone except the middle class worker.

    why can't a person own their home or should houses be hoarded in the name of capitalism?

    Uncle sam should underwrite mortgages just like federal student loans. all the interest they accumulate on these loans could be utilized for medicare and SSI and to the debt.

    until corporations are disssolved and their interests are no longer above the people nothing is really going to change.
  5. IcyPatriot

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

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    #87 Jersey


    That line pretty much sums up where all our problems lie ... no question.:mad::mad::mad:

    I wouldn't say dissolve them but put a crimp in their tax havens, campaign finance laws, Congress term limits, lobbying on Capitol Hill ... all of that stuff. They are in everyone's back pocket then they make their money outside of the country.

    The problem is though that when Obama starts trying to change business as usual he puts his own life and Presidency in peril with the power brokers who will want him gone ... they can more easily work with Biden I hate to say or even think.

    Sorry to derail Mav's thread though ... back to inflation.
    Last edited: Jan 17, 2009
  6. wistahpatsfan

    wistahpatsfan Rookie

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    #75 Jersey

    I'm convinced now that the government, based on its actions over the last 6 months, does not care what the currency is worth anymore. The currency is not relevant, anymore. Paper is just paper.
  7. MrBigglesWorth

    MrBigglesWorth Rookie

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    ya their plan wasn't thought out at all.
  8. IcyPatriot

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

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    #87 Jersey


    Yeah it was ... they will roll out the 'Amero'.
    [​IMG]
  9. MrBigglesWorth

    MrBigglesWorth Rookie

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    it would be interesting if they did force a new type of currency on people how the people would respond.
  10. Run DMC

    Run DMC Rookie

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    #24 Jersey

    Here's a new site for your bookmark, Mav:
    33 Watch
  11. IcyPatriot

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

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    #87 Jersey


    They forgot Larry Bird
    [​IMG]
    Last edited: Jan 17, 2009
  12. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    If that scenario comes true, it would make lots of elementary sense to right now buy much real estate at these low fixed rates, get 40 year mortgages.
  13. Run DMC

    Run DMC Rookie

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    Ah yes, Wawwy Bewhd.
  14. PatriotsReign

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    Of course this is possible, but definately not a certainty. If you look at Japan's lost decade of the 90's, they printed a similar amount of money (on a relative scale) and they never experienced hyper-inflation.

    If our economy "bounces back" suddenly and strongly, it could very well happen. But if we creep back slowly year after year, it will be unlikely.

    Below is the definition of Hyperinflation;

    "In economics, hyperinflation is inflation that is "out of control", a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month." In informal usage the term is often applied to much lower rates. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month."

    So if we end up with 10-20% annual inflation, that will mean it's not hyperinflation. The author of this articles talks about pent-up demand being released with a little positive change in consumer confidence. Guess what? Consumers are not going to even want to spend the way they used to whenever confidence does come back. We have entered an age (not a period) of frugality. It will be a lasting change in the American consumer psyche.

    You will not see a surge in increased consumer spending, so that will my true hyperinflation very difficult to ocurr.
    Last edited: Jan 18, 2009
  15. PatriotsReign

    PatriotsReign On the Roster

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    Any prediction of inflation or deflation is just a guess and another opinion among thousands of them. In that spirit, here's another opinion on this topic;

    "I know that in theory a determined government can always produce hyperinflation if it wants, I have heard that story 1000 times. If it was so simple in practice, however, yields would not be at 0%. Right now, the important thing to note is that even with massive "stimulus", thus far it's dwarfed by the implosion of credit and the trillions of dollars worth of writedowns and bankruptcies that are coming. Japan tried for years to combat deflation and failed.

    Most simply do not grasp the once in a multi-generational pendulum shift from risk taking to risk aversion. The credit bubble has burst and we are on the back side of Peak Credit.

    As determined as Bernanke is, the best he will be able to do is drag things out for years, making zomibified banks in the process. Those who suggest The US Government Will Not Choose Deflation, simply have it wrong. Attitudes are the key and a secular change in attitudes from consumption to savings is now underway. And that attitude is what is going to define the deflationary years that follow, regardless of what government wants."


    Mish's Global Economic Trend Analysis: Social Mood Will Define The Future
  16. sdaniels7114

    sdaniels7114 Rookie

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    With interest rates at about zero in some cases, I think we're ready for the inflation that will come in the future. Personally, I've gone from near depression about the economy to cautious optimism. I don't think its bottomed out just yet, but I think we've got everyone around the world on the right page for getting through it as painlessly as possible.
  17. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    Not to mention Rolling Rock.

    [​IMG]
  18. IcyPatriot

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

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    #87 Jersey

    Right up there for sure.;)

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