Deflation is the solution

[jimhcom]

Originally Posted by mathjak107

its said japan is the best example of deflation.. its more then 20 years now they have been trying to get out.

from what ive read its far easier to increase rates and slow or stop inflationary spirals.in comparison there is little to do to stop deflationary spirals.

Japan is an example of what happens when the government tries to intervene in interest rates and banks refuse to write off losses. The recession and deflation that could have been swift, lingers for decades. It is a perfect example that you cannot stop deflation, you can only drag it out and make the suffering go on far longer than it needed to. Of course the banks made billions from the taxpayers in government bail outs so I guess it depends on if you are a taxpayer or a banker when you consider if it will be beneficial or harmful.

[mathjak107]

i think its more a case of what happens when the government does the wrong things . they did the opposite of what should have been done in the beginning including tightning when they should have eased and it caused deflation and shows how hard a deflation spiral is to break once its well under way.

[jimhcom]

THE FED’S GREAT EXPERIMENT | PRAGMATIC CAPITALISM

If you want an example of doing the wrong things this article outlines the Feds failed attempts at reviving the economy, and why things will get worse going forward.

[mathjak107]

if you change the words will get worse to can get worse it could be a posibility... i just cant stand these definitive 'will " happen things about future events still unknown

[jimhcom]

Originally Posted by mathjak107

if you change the words will get worse to can get worse it could be a posibility... i just cant stand these definitive 'will " happen things about future events still unknown

Sorry, it is just I am yet to hear anyone put up a plan or a solution to the ongoing problems.
All I hear is denial the problems exist.
At the point I see the problems being acknowledged, and solutions being tabled, I will begin to have some confidence in the future.
So long as we continue with the behaviors that caused the problems to begin with, I can only conclude we will get more of what those behaviors caused before.
The problems we face come from 2 sources.
One we are too far in debt both public, and private.
Second we have too wide of an income gap between the working class and the upper class.
Neither of those things are changing, therefore we will reap more of what we have sown.

[jazzlover]

Originally Posted by jimhcom

Sorry, it is just I am yet to hear anyone put up a plan or a solution to the ongoing problems.
All I hear is denial the problems exist.
At the point I see the problems being acknowledged, and solutions being tabled, I will begin to have some confidence in the future.
So long as we continue with the behaviors that caused the problems to begin with, I can only conclude we will get more of what those behaviors caused before.
The problems we face come from 2 sources.
One we are too far in debt both public, and private.
Second we have too wide of an income gap between the working class and the upper class.
Neither of those things are changing, therefore we will reap more of what we have sown.

You have missed the third big problem: There are too many of us demanding ever more natural resources--most of which are now declining in cheaply producable quantity or are simply declining in availability at all. That will be the defining problem of the decades ahead, and it promises to be ugly and violent. The "sideshows" of excess debt, speculative bubbles, income gaps, governmental interference in markets, re-distributionist schemes, moral decay, etc. are both a symptom of those resource shortages and an aggrevator of them as time goes on.

Just a bad place to be, but long-predicted and warned about. Check out these quotes from Theodore Roosevelt from a century ago. He saw what lay ahead way back then--quite prophetic:

"The conservation of natural resources is the fundamental problem. Unless we solve that problem it will avail us little to solve all others."

"The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life."

"Optimism is a good characteristic, but if carried to an excess, it becomes foolishness. We are prone to speak of the resources of this country as inexhaustible; this is not so."

"We of an older generation can get along with what we have, though with growing hardship; but in your full manhood and womanhood you will want what nature once so bountifully supplied and man so thoughtlessly destroyed; and because of that want you will reproach us, not for what we have used, but for what we have wasted...So any nation which in its youth lives only for the day, reaps without sowing, and consumes without husbanding, must expect the penalty of the prodigal whose labor could with difficulty find him the bare means of life."

"This country has nothing to fear from the crooked man who fails. We put him in jail. It is the crooked man who succeeds who is a threat to this country."

"There is not in all America a more dangerous trait than the deification of mere smartness unaccompanied by any sense of moral responsibility."

[jimhcom]

Originally Posted by jazzlover

You have missed the third big problem: There are too many of us demanding ever more natural resources--most of which are now declining in cheaply producable quantity or are simply declining in availability at all. That will be the defining problem of the decades ahead, and it promises to be ugly and violent. The "sideshows" of excess debt, speculative bubbles, income gaps, governmental interference in markets, re-distributionist schemes, moral decay, etc. are both a symptom of those resource shortages and an aggrevator of them as time goes on.

Just a bad place to be, but long-predicted and warned about. Check out these quotes from Theodore Roosevelt from a century ago. He saw what lay ahead way back then--quite prophetic:

Great post, It is a shame we do not have that caliber of man in government today. But in the end the people get the government they deserve.

[JohnVosilla]

Very low interest rates are an incredible driver to recovery. We are not nor will ever be Japan as we have lots of open land for our ever growing population and never had the extremes of overvaluation and leverage on such a national scale at the same time as the stock and RE markets did in Japan over 20 years ago. If we lose our status as reserve currency before we get out of this mess then the dynamics change and Fleckenstein will be right..