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Old 01-13-2009, 09:19 PM
 
Location: Raleigh, NC
9,043 posts, read 11,334,173 times
Reputation: 1383

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Hyperinflation is 100% guaranteed, and Peter Schiff is an economic prophet.

Go at it my son.

Last edited by Waterlily; 01-13-2009 at 09:34 PM.. Reason: edited out comments that are off topic
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Old 01-14-2009, 09:33 AM
 
Location: Londonderry, NH
41,505 posts, read 49,625,513 times
Reputation: 24548
I am praying for a massive deflation.
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Old 01-14-2009, 11:50 AM
 
17,750 posts, read 15,051,082 times
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Quote:
Originally Posted by NewToCA View Post
Well, a little inflation actually can be beneficial for an individual. It depends upon a couple of items, having a fixed rate mortgage on a home you plan on staying if for an extended period of time, the home value increasing at the inflation rate, and and individual's monthly income keeping up with the rate of inflation.

What happens is you have a "base year" where the home was purchased, and let's say that the mortgage equals 30% of monthly take home pay. Using my assumptions in the previous paragraph, if inflation is 3%, over a 10 year period the mortgage payment actually drops to about 22% of monthly take home pay. All things being equal, this frees up 8% of your monthly take home pay.

Not arguing in support of inflation, just pointing out how it can be beneficial for an individual.
Hi NewToCA,

3% inflation is built into the system. Without it the system spirals into deflation. Debt based money at interest must exist in an inflationary environment else the money supply shrinks from the interest payments. The general lowering of prices will decrease the value of the collateral as a bases for new loans which causes a vicious cycle.
The complete folly is exposed. Banks will not loan to people who are increasingly less credit worthy nor will they lend in similar quantities to those who are since their collateral has been decimated. a house that was $500,000
and is now worth $350,000 will result in smaller loans and a shrinking money supply. Adding to this ever shrinking pool of new borrowing capacity is the lack of default credit swaps which makes the shrinking pool even narrower. This means that banks that used to loan to 4 out of 5 people a will now loan to 3 out of 5 people for 3/4 as much.
Just the removal of credit default swaps alone( a means to hedge against defaults) represents trillions of dollars currency destruction.
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Old 01-14-2009, 11:55 AM
 
Location: Londonderry, NH
41,505 posts, read 49,625,513 times
Reputation: 24548
I own my house with the mortgage nearly paid off and I am about to retire on a fixed income. Inflation is anathama to me because it reduces my purchasing power every year. I want a deflating economy where dollars become more valuable not an inflation where they loose value. maybe it is about time we tried an economy that ran on savings and wealth creation not mortgage and credit card debt and funny money. Might do most of us some good although the financiers would take a hit because they would have to repay loans with real money not inflated paper.
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Old 04-08-2009, 06:22 PM
 
3,720 posts, read 4,445,722 times
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The private federal reserve bank seems to be worried about delfation.

Fed sees economy sliding further (http://news.yahoo.com/s/nm/20090408/bs_nm/us_usa_fed_5 - broken link)

Quote:
"Several expressed concern that inflation was likely to persist below desired levels, with a few pointing out the risk of deflation," the minutes said.
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Old 04-08-2009, 07:32 PM
 
Location: Raleigh, NC
9,043 posts, read 11,334,173 times
Reputation: 1383
With all this rush to cash and supposed deflation, I'm sure glad prices at the market and my energy bill have drastically fallen
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Old 04-08-2009, 10:33 PM
 
Location: Marietta, GA
7,844 posts, read 14,531,375 times
Reputation: 3484
Short term deflation is a possibility, but long term we are planting the seeds of massive inflation. The Fed has never been good at pulling the right levers at just the right time, despite their claims to the contrary. Bernanke says he can unwind all the programs and reduce the balance sheet at just the right time, and I hope he's right, but I wouldn't bet the house.
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Old 04-08-2009, 11:22 PM
 
Location: Heartland Florida
9,324 posts, read 23,259,690 times
Reputation: 4895
Nothing has gone down in price, and the money supply is expanding exonentially. Only phony asset values like selected real estate have fallen. We are already inflationary and it will only get worse. WHen nodody buys us debt anymore the printing presses will run in overdrive. The result will be hyperinflation.
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Old 04-08-2009, 11:42 PM
 
Location: Charlotte, NC
2,193 posts, read 4,452,545 times
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Quote:
Originally Posted by tallrick View Post
Nothing has gone down in price,
How can you say that? Oil went down and so did milk. While grocery store prices haven't gone down as a whole, commodities futures did crash.

Quote:
and the money supply is expanding exonentially.
Yes the money supply increased, but much of that money hasn't gone into the hands of people. Do you have more money? The money that people lost is wayyyy more than the money injected by the Fed.

In Zimbabwe, their wages went up so they had more money in their accounts. That's why they were taking wheelbarrows of money to purchase bread.


Quote:
We are already inflationary and it will only get worse.
No, we are not inflationary right now, we are deflationary.
There's many companies that have cut wages. Here's a slew of articles showing wage deflation. Not only are wages cut, people's work week's have reduced also as well as hours.

Mish's Global Economic Trend Analysis: Wage Deflation Sets In


You hyperinflationists keep preaching for years about hyperinflation. Maybe in 30 years you will be right finally. I guess even a broken watch is right twice.
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Old 04-09-2009, 06:05 AM
 
12,870 posts, read 12,785,187 times
Reputation: 4446
Quote:
Originally Posted by gwynedd1 View Post
Hi StoneOne,

Unfortunately that is a misunderstanding of what money is. The more we pay off debt in a fractional reserve system, the more deflationary it becomes. If all private debt were to be paid down we would need somewhere in the neighborhood of a 60 trillion dollar public debt just to keep the supply we have.
The US, when it went off the gold standard entirely, pretended a dollar had the same ‘weight’ as gold even though the gold was removed from the equation. This was a lie.

The next lie was worse: debts are assets! ONLY TO THE CAPITALIST. we now have a negative GDP and no wealth. individually the debt-to-disposable income ratio of American households more than doubled from 60% in 1980 to 133% in 2007. If there is no capital, the debt is pure poison! It is a destroyer, not a creator force. We owe money to China and China does have capital! So they are the ones who are getting wealth out of debt. Not anyone or anything in the US. If any banker was to make money this way, it will be owed to China.

Last edited by floridasandy; 04-09-2009 at 06:21 AM..
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