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Old 12-19-2018, 09:20 PM
 
798 posts, read 443,266 times
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Our economy stopped expending in 2001. Greenspan understood that 2001 was the end of the Business Cycle. That is why he raised rates in 2005 and 2006. He knew he was supposed to begin raising rates, to limit more debt. He also knew that if he kept doing that he would be blamed. This is the guy who was a hero in 1999, cover of time magazine, the committee to save the world. So he retired. Turned it over to Bernanke, who had no clue and was still trying to fIX the 1930's.

Bernanke is a Mad Men. Instead of limiting debt he encouraged it, chose to delay deflation. So now we have a HUGE FED balance sheet (and HUGE CB balance sheets in Japan and the EU) that will and must be unwound. Rates will go up, currencies will strengthen. And we will get that necessary DEFLATION the Bernanke Put only delayed. The good side? Prices will collapse; housing will become affordable; homelessness will be largely solved. Medicine will become affordable. Education (higher) will become affordable. Food and cars will see prices cater.
Savings will grow. The Speculator class will be driven off with the wind.

It won't all be bad.

Debt will face the Big Crunch.

Good Luck!!!
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Old 12-19-2018, 10:03 PM
Status: "43 restaurants within 6 blocks of my house" (set 13 days ago)
 
Location: The Berk in Denver, CO USA
13,405 posts, read 19,136,503 times
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Quote:
Originally Posted by C2BP View Post
Medicine will become affordable.
Including your meds.
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Old 12-19-2018, 10:54 PM
 
Location: Thailand
5,154 posts, read 2,451,250 times
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Originally Posted by C2BP View Post
Here it comes now
Why do I get the feeling that "now" will very liberally interpreted by C2BP when we don't get this massive deflation he's been clucking about for years now?

Either that or he'll just disappear like lots of doomsdayers who get tired of being wrong.
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Old 12-20-2018, 01:41 AM
 
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C2BP: I hope you're right, but IMHO you've got it backwards. The US will face a debt crisis that will result in a massive devaluation of the dollar and a number of years of very high inflation (> 10%) coupled with a contracting economy. Think Argentina.

This is Ray Dalio's prediction. Given I'm 62 and want to hold out until 70 to start drawing from SS, I hope the debt crisis can wait for 8 years.

https://www.bloomberg.com/news/artic...ligations-loom

Last edited by mitchmiller9; 12-20-2018 at 01:53 AM..
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Old 12-20-2018, 01:52 AM
 
798 posts, read 443,266 times
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Quote:
Originally Posted by mitchmiller9 View Post
C2BP: You've got it backwards. The US will face a debt crisis that will result in a massive devaluation of the dollar and a number of years of very high inflation (> 10%) coupled with a contracting economy. Think Argentina.

This is Ray Dalio's prediction.

https://www.bloomberg.com/news/artic...ligations-loom
Ray Dalio..... no comment.
We have trillions of FED balance sheet excess being UNWOUND. This makes the US DOLLAR stronger, not weaker. FED UNWIND kills dollars, which makes them more costly and more in demand.

A Strong Dollar deflates the economy. A Weak Dollar inflates it.

Good Luck!
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Old 12-20-2018, 02:08 AM
 
798 posts, read 443,266 times
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Quote:
Originally Posted by lieqiang View Post
Why do I get the feeling that "now" will very liberally interpreted by C2BP when we don't get this massive deflation he's been clucking about for years now?

Either that or he'll just disappear like lots of doomsdayers who get tired of being wrong.
There is a depression (serial recessions) every certain number of years. Expansion is always followed by contraction. Day followed by Night. We can pretend this is not so, by stealing money from the future to keep spending today, during the deflation season, as Bernanke's FED did this cycle, but then we do not get the benefits of the deflation - reduced debt, earnings through saving, a stronger currency. The Night Cycle is supposed to make one leaner and stronger, ready for the next expansion. If you "trick" the Night Cycle to keep necessary deflation from happening, then you end up tricking yourself.

The easy way out (in the short term) is not always the best way to go Lieqiang. There are thousands of badly-managed global Zombie companies today that should have died in 2001 but were put on zero-interest rate fixes by the central banks (money provided by taxpayers) so they could survive. They survived on debt rather than sales. Now they are addicted to low interest rates - and a weak dollar. Now that the Dollar is stronger, and rates are higher, they are facing reality = bankruptcy.

As in nature, Winter is a time of death. Companies that are strong enough to survive the stress of deflation survive. Those that aren't, die. But then we have a whole new generation of companies that spring up when every new Business Cycle returns. Welfare for corporations defeats the process.

Americans need strong US DOLLAR. STRONG DOLLAR, enhances American Buying strength. We can buy world companies with a strong dollar; with a weak Dollar, China can buy our companies.
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Old 12-20-2018, 02:40 AM
 
Location: Thailand
5,154 posts, read 2,451,250 times
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That's a great speech, it's almost like stumbling onto Goodfellas when channel flipping... it's still great the 67th time!

However economic contraction is not equivalent to deflation or civil war or whatever other stuff you've been spinning up whenever Nurse Ratched gives you internet time.
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Old 12-20-2018, 09:04 PM
 
8,449 posts, read 3,597,169 times
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Quote:
Originally Posted by C2BP View Post
Ray Dalio..... no comment.
We have trillions of FED balance sheet excess being UNWOUND. This makes the US DOLLAR stronger, not weaker. FED UNWIND kills dollars, which makes them more costly and more in demand.

A Strong Dollar deflates the economy. A Weak Dollar inflates it.

Good Luck!
Aha! IMO some sense here. Only that the magnitude of the unwinding's economic effect will be another large MEH, similar to QE and its weak effect on the general economy.

As the fed unwinds, the USD's it created out of thin air and raising national debt with QE, will invert. USD's will be destroyed as USD returns are swept back to the Treasury, and so goes some national debt.

Can you imagine national debt going down by $T's? lol
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Old 12-20-2018, 10:16 PM
 
Location: Thailand
5,154 posts, read 2,451,250 times
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Originally Posted by Hoonose View Post
As the fed unwinds, the USD's it created out of thin air and raising national debt with QE
I never cease to amazed how educated people have such incredibly poor understanding of QE.
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Old 12-20-2018, 10:33 PM
 
8,449 posts, read 3,597,169 times
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Originally Posted by lieqiang View Post
I never cease to amazed how educated people have such incredibly poor understanding of QE.
Cognitive dissonance.

Creating money causes inflation. Period.
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