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Originally Posted by subsound
There's no analysis anywhere, just a few paragraphs of "OMG HYPERINFLATION" repeated in different ways.
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That's funny.
Quote:
Originally Posted by subsound
The guy has been predicting it for years, about every time he writes in his idiot blog it's "just about to happen".
He is a great case for the phrase "Those the gods wish to destroy, they first drive mad".
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Any moron can collect and collate data, but interpreting the data is requires some intelligence, and he repeatedly proves he has none.
Quote:
Originally Posted by subsound
He claims repeatedly that every shred of economic data the government puts out is "grossly inaccurate", which he then posts older measures for various indicators. Even though those stats are very clearly published (such as U4/6 are very clearly at the BLS site) and he has never published why or how that data is grossly inaccurate.
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It's all in the definition.
You have to define both "employment" and "unemployment." So, finally we have a 3-prong test that is an excellent definition, and that is, you have to want to work, you have to be available to work, and you have to be actively seeking employment.
Certainly, everyone can see Carter's frustration, "
Why are we counting the prison population as unemployed?" They aren't available to work, and they certainly aren't seeking employment. And everyone can see Carter and Reagan's frustration, "
Why are we counting military personnel as unemployed? The Draft. The
Draft? The Draft ended in 1976, this is 1979 and everyone in the military is a volunteer, not a draftee.
So he's actually using the pre-1994 definition. The definition of "employed" has changed and apparently under the Obama Administration, if you have a PhD in Nuclear Physics and your only job is working 8 hours a week at McDonald's, then you're "gainfully employed."
You can't read into that too much, as it might only imply that a very small sector of the economy cannot absorb Nuclear Physicists, but when you have a wide spectrum of people "gainfully employed" at part-time jobs way beneath their skill levels, that implies widespread problems in the economy.
Still, it's not enough to scream "Hyper-Inflation" on a crowded blog site.
You got 11-12 more years before that kicks in. You can look at the previous cycles. You had massive government spending because of the [1st] Great Depression [of the 19th Century] and also major drought on the Atlantic Coast and Southeast US. You shouldn't have had hyper-inflation until about 1867-68, but the Civil War causes the government to continue massive spending and so by late 1861 you have hyper-inflation at a rate of 50%, and no I'm not taking about the price of corn or cotton rising (ie Cost Inflation), I'm talking about the prices of everything doubling or tripling, everything from Room & Board to horses, horse feed, buggy whips, clothes, shoes, boots, food, land, and even the cost of shave and cut. And yes, there was Cost Inflation on top of that so the price of some things jumped 80%-125% at least briefly for a year or two.
Then again in 1916 due to government spending in the previous Depression, plus a couple of Panics and then that was exasperated by spending for WW I.
Quote:
Originally Posted by subsound
I wonder where he gets his data, since I doubt he has a large staff to count everything independently from the various entities that collect the data already. Even though it seems like his blog is the only thing keeping him busy anymore.
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He used to get it from the government (various government agencies and offices). Much of the data is still collected, it just isn't published. That led to some problems with M3, because the government still collected the data, they just stopped publishing it, and then there was a spat with FOIA requests because the government didn't want to release that info, and I don't know what happened after that. I suspect the government still collects it, but calls it something else to get around FOIA.
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Originally Posted by jtur88
Inflation is income-driven, not wage-driven.
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No, wages can drive inflation. It's called Wage Inflation. It's happened twice in the last 80 years. The solutions proffered by FDR and Nixon were Wage & Price Freezes.
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Originally Posted by Willy702
An idiot only has to be partially right once to boast about it for a decade or two.
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That's one of the, um, benefits of the internet.
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Originally Posted by zoomzoom3
I don't see it happening anytime soon. The govt. and the Fed could hold the house of cards up for 100 years or more even piling on the debt at the current rate.
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No, they can't hold it up for 100 years. At this point, the only way to stop hyper-inflation from hitting about 11-12 years from now it so run a balanced budget for the next 8 years, but that would result in an instant Recession, and possibly lead to a Depression.
Quote:
Originally Posted by JazzyTallGuy
When there was high inflation in the mid 1970's to early 1980's in the United States middle class income was growing at significantly higher rates than it is presently.
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That was in part due to Wage Inflation.
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Originally Posted by JazzyTallGuy
Again without income growth in the middle class the only threats of inflation that I see are due to increasing commodity demand due to the economic growth in emerging market nations and the corresponding increase in demand for resources.
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But that's Cost Inflation and it has no bearing on Real Inflation (except it just makes Real Inflation that much worse).
Quote:
Originally Posted by Chango
I think we've got a little longer, but not 100 years. I suspect the cards will fall after the official debt has climbed north of 20 Trillion. That will be in what, 3 or 4 more years?
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Depends. About 5 years at current government spending, but I'm not factoring in interest on the National Debt, so 3 to 4 years sounds about right if you would factor in interest.
Quote:
Originally Posted by JazzyTallGuy
You're ASSUMING the debt will continue to rise at it's present rate. That's not necessarily a valid assumption, especially with growing reality by more Americans that government spending will have to decrease and in all probablility some taxes are going to have to be raised.
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But it
is a valid assumption. The National Debt
will continue to rise, because the government
will continue to deficit spend on each budget for the next 3-5 years.
That is, for the next 3 to 5 years, the government will continue to collect about $2.2 TRILLION in revenues and spend about $3.8 TRILLION leaving an annual deficit of ~$1.5 TRILLION which will be rolled into the National Debt.
That will continue until as Standard & Poor (and now many others) have said the US bond rating will be downgraded in about 2 years.
When people stop buying treasury notes, or when there is a reduction in the number of people buying treasury notes, and worse when people start calling their notes, then the government will be forced to run a balanced budget because it will be forced to shut down.
At that point, you can say "Depression" without covering your mouth simultaneously.
The only reason you're not in a major Recession now, is because the government is continually spending $1.5 TRILLION it doesn't have each year to keep the economy moving (except that money isn't actually going anywhere).
As soon as the government runs a balanced budget, your GDP just dropped $1.5 TRILLION, and that's just for starters.
So if the GDP is $15 TRILLION when they balance the budget, it will drop to $13.5 TRILLION instantly, and consider that in the recent very mild economic downturn that most people erroneously call a "recession" the GDP only dropped about $340 Billion.
Quote:
Originally Posted by Chango
Actually we are looking at the law of exponential growth in action. It's not an assumption, it's a mathematical certainty. The dollar can do nothing but inflate over the long haul; the only question is how fast/slow it happens. But like a runaway truck roaring down the mountain, you can't just throw it in reverse and start going back uphill.
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That would be the long and short of it.
Quote:
Originally Posted by floridasandy
we also have this:
The biggest surprise was that in the just ended week, Treasury securities held in custodial accounts at the Fed, considered by some the best real-time representation of foreign holdings of US Treasurys considering that the TIC update is not only wildly inaccurate in its monthly update, but is also 3 months delayed, dropped by the largest amount in 4 years. From a total of $2.704 trillion, USTs held in custodial accounts declined by $18.7 billion to $2.685 billion. This is the second largest decline in history, only topped by the $22.1 billion in the week of August 15, 2007 which is the week that followed the great quant crash of 2007 that wiped out, among others, Goldman Alpha.
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I'm not sure what to make of that. It depends on
which custodial accounts, and not all custodial accounts are foreign investors or foreign governments. I can see a lot of Americans liquidating their accounts to make up for cash-flow, but that can't be all of it, so I'd have to assume someone is moving money.
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