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Old 09-13-2009, 09:12 AM
 
Location: US Empire, Pac NW
5,008 posts, read 10,772,863 times
Reputation: 4125

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Quote:
Originally Posted by wheelsup View Post
Our money was still on the gold standard during that time period until the Government made it illegal to even own gold in 1933. Instantly deflation turned into inflation. The "great depression" deflation was due in part to the money being still backed by gold and silver.



Inflation During The Great Depression

There is a difference between "deflation" and "correction". I'm not sure where you shop but my prices on bread, milk, eggs, etc. have been going up still. The Government has thrown and is throwing boatloads of money into the system. Deflation IMO is the last of our worries.

+1 to you sir.

There is actually a bigger risk of inflation now as the Fed has instituted a policy of printing money and hoping that foreign governments will still fund the debt. I certainly hope that it doesn't get too out of hand ...
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Old 09-13-2009, 08:37 PM
 
Location: Heartland Florida
9,324 posts, read 23,768,138 times
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Inflation is the only thing the Fed can do. Thank you for debunking the myth of deflation with this thread. The real deflation will be priced in gold bullion.
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Old 09-13-2009, 08:42 PM
 
Location: San Diego California
6,797 posts, read 6,307,947 times
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Quote:
Originally Posted by eskercurve View Post
+1 to you sir.

There is actually a bigger risk of inflation now as the Fed has instituted a policy of printing money and hoping that foreign governments will still fund the debt. I certainly hope that it doesn't get too out of hand ...
The problem with your position is that we do not have a "money" based economy; we have a "credit" based economy. No one pays for what they purchase, they finance it. It really does not matter how much money the FED prints because the money is only going to the banks to balance their books and to run government. The banks are not still loaning because they have no confidence in the value of assets at present levels, or the ability of borrowers to repay the loans in a high unemployment environment. The level of credit, which is the real currency of our economy, is shrinking. Therefore there is less currency (credit), and that is deflationary.
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Old 09-14-2009, 10:13 PM
 
Location: Marietta, GA
7,846 posts, read 14,862,082 times
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Inflation is almost inevitable given that there are only two ways for the country to get out from under the mound of debt we've accumulated. One is to tax our way out, and the other is to print our way out. I believe we've already started down the second path.
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Old 09-14-2009, 10:24 PM
 
Location: Conejo Valley, CA
12,476 posts, read 17,421,122 times
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Quote:
Originally Posted by neil0311 View Post
Inflation is almost inevitable given that there are only two ways for the country to get out from under the mound of debt we've accumulated. One is to tax our way out, and the other is to print our way out. I believe we've already started down the second path.
If the FED could actually create inflation at will the depression would have never occurred. Looking at the money supply without looking at the velocity of the money supply does not make much sense.
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Old 09-15-2009, 04:17 AM
 
12,870 posts, read 13,122,563 times
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the recovery, when it comes, will combine slow economic growth, unusually long un- and underemployment, stagnating real incomes, rising interest rates and inflation. There is little that policymakers, having made colossal mistakes, can do to prevent such an outcome.

first of all, i don't even think we have a recovery yet so it will be deflation until then. why do you think the oil is not selling and cargo ships, instead of moving cargo, can sit idly by holding oil for speculators? once we are out of deflation, then i think stagflation will be the result.
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