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Old 01-13-2016, 08:18 AM
 
Location: City of the Angels
2,223 posts, read 1,522,135 times
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Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
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Old 01-13-2016, 09:22 AM
 
8,279 posts, read 3,452,461 times
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Quote:
Originally Posted by NickofDiamonds View Post
Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
Prices typically drop when there is a lack of available consumer money.
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Old 01-14-2016, 08:04 AM
 
33,046 posts, read 20,708,082 times
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Originally Posted by Hoonose View Post
Prices typically drop when there is a lack of available consumer money.

Then consumer poverty is good for the poor and consumer prosperity is bad for the poor?
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Old 01-14-2016, 08:41 AM
 
8,279 posts, read 3,452,461 times
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Originally Posted by freemkt View Post
Then consumer poverty is good for the poor and consumer prosperity is bad for the poor?
If everyone is poor, then what is 'good' must change in a relative sense.

What is typically best for the poor is jobs and supports.

If the middle class is also poor, jobs will diminish.

If the middle class is poor, social supports may also diminish as do taxes.
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Old 01-14-2016, 09:34 AM
 
1,789 posts, read 1,345,713 times
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I feel like I just stumbled into the twilight zone.
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Old 01-14-2016, 03:12 PM
 
3,529 posts, read 2,172,235 times
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Quote:
Originally Posted by NickofDiamonds View Post
Remember, their money supply fell, not ours.
It may become inflationary for them as things may now cost more because they don't have the money to pay for it.
You have that backwards, buddy.
Quote:
Originally Posted by freemkt View Post
Then consumer poverty is good for the poor and consumer prosperity is bad for the poor?
Sure, if you define "the poor" as people who are immune to pay cuts and job losses, and have no net debts.
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Old 01-15-2016, 09:57 AM
 
3,454 posts, read 1,694,791 times
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Quote:
Originally Posted by freemkt View Post
"The equivalent of millions of dollars" suggests the destroyed money was in some currency OTHER than USD, and thus a currency considerably smaller than the dollar.
Even if it were in hard US currency, any deflationary impact would be as near to zero as conceivable. Depending on how you count, the US monetary supply is from $3 trillion to $10 trillion--and either of those numbers does not account for capital assets.
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Old 01-30-2016, 02:18 PM
 
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Quote:
Originally Posted by MTAtech View Post
Just as increasing the money supply isn't necessarily inflationary, reducing it isn't necessarily deflationary.
Good point.
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Old 01-30-2016, 07:39 PM
 
Location: San Diego California
6,797 posts, read 6,119,545 times
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Quote:
Originally Posted by freemkt View Post
An airstrike by the U.S. blew up an ISIS warehouse in Mosul, Iraq where the terror group stored the equivalent of millions of dollar in cash to finance their operations, a senior U.S. defense official told Fox News on Monday.

The cash storage facility in the Iraqi city was hit by two 2,000-pound bombs, according to the official.

It was unknown how much money was in the facility, but it is estimated to be “in the millions,” the defense official said.

US airstrike in Mosul blows up 'millions' in ISIS cash | Fox News


The physical cash in circulation is a tiny fraction of the total money supply. The vast majority of money is virtual and is created whenever debt is incurred.

Deflation in todays world has nothing whatsoever to do with the physical cash in circulation. Deflation is a function of the default of debt. When ever a loan or debt is defaulted on, the virtual money which was created when the loan was made simply disappears.

That is the reason the FED needed to inject billions of dollars into the banks and begin QE to replace the money that was destroyed during the 2008 fiasco.
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Old 01-31-2016, 05:10 AM
 
Location: Long Island, NY
19,712 posts, read 11,013,106 times
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Quote:
Originally Posted by jimhcom View Post
The physical cash in circulation is a tiny fraction of the total money supply. The vast majority of money is virtual and is created whenever debt is incurred.

Deflation in todays world has nothing whatsoever to do with the physical cash in circulation. Deflation is a function of the default of debt. When ever a loan or debt is defaulted on, the virtual money which was created when the loan was made simply disappears.

That is the reason the FED needed to inject billions of dollars into the banks and begin QE to replace the money that was destroyed during the 2008 fiasco.
Deflation isn't directly associated with the money supply, just like inflation isn't associated with the money supply.

During the economic downturn, economists that didn't believe in Keynes predicted that the Fed increasing the money supply was going to result in hyper-inflation. They couldn't have been more wrong.



Let us remember that deflation is a decrease in the general price level of goods and services.
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