Bernanke Promises More INFLATION For Us! (loans, creditors, debt, pension)
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Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
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Gawd!! I just cannot believe what I am hearing from the mouth of Ben Bernanke! He came on TV today and says that he is going to aggressively cut interest rates and PRINT more money to ward off a "possible recession". Firts of all, whether the government says so or not, anybody that has been to a gas pump or a grocery store in the past month already knows that inflation has crept back into the US economy after a 22 year absence. The government might say there is "no inflation" because they exclude food and fuel prices from the inflation indexes but anybody out here knows that our wallets are a bit more empty than they were last year. The value of our currency is already in free fall and printing up more of it will not help anything. The fact is that, yes Bernanke might cut the rate all the way to zero but it is only going to put off the day to pay the piper and the longer he puts off the economic CORRECTION which will probably be short and shallow as far as a recession goes, the MORE painful the recession is going to be when it does hit. Ask anybody that was around in the early 1980s about that when the fires of inflation raged, interest rates hit 20+ percent and unemployment was in double digits for months! That is exactly where we are headed again!
Gawd!! I just cannot believe what I am hearing from the mouth of Ben Bernanke! He came on TV today and says that he is going to aggressively cut interest rates and PRINT more money to ward off a "possible recession". Firts of all, whether the government says so or not, anybody that has been to a gas pump or a grocery store in the past month already knows that inflation has crept back into the US economy after a 22 year absence. The government might say there is "no inflation" because they exclude food and fuel prices from the inflation indexes but anybody out here knows that our wallets are a bit more empty than they were last year. The value of our currency is already in free fall and printing up more of it will not help anything. The fact is that, yes Bernanke might cut the rate all the way to zero but it is only going to put off the day to pay the piper and the longer he puts off the economic CORRECTION which will probably be short and shallow as far as a recession goes, the MORE painful the recession is going to be when it does hit. Ask anybody that was around in the early 1980s about that when the fires of inflation raged, interest rates hit 20+ percent and unemployment was in double digits for months! That is exactly where we are headed again!
Yes, unfortunately, this is true. Two scenarios could play out in this case
Fed stops injecting "liquidity" (aka inflation) after it realizes that it is truly irrelevant in curing the credit crisis. Stagflation for about 5-10 years until we revitalized our hollowed out manufacturing infrastructure and start saving again. Lower asset (house) prices and somewhat rapid rising consumer prices.
That's a BEST case scenario in my estimation.
Worst case scenario is the hyperinflation scenario. Read a little about what that entails (search on wikipedia: hyperinflation). If the government wants to switch to the "Amero" in the future, this would be an ideal strategy (not so ideal for pension recipients and cash savers). Since foreign creditors can't vote, just default on obligations and take the dollar offline. In the meantime, dollars could lose 10x, 100x, 1,000x (or more) of their current value. Germany witnessed millions of percent inflation in the 20s, and Hungary witnessed a billion million (no, really) percent inflation before crying uncle and adopting a Bolshevism as an alternative form of government.
Point is, when a heroin addict needs to get clean, you don't keep injecting more heroin. Withdrawal is no fun (wouldn't know firsthand), but it sure beats an overdose.
What you can do is consider getting out of any dollar denominated assets. It's difficult since most online trading outfits only buy this sort of stuff. Find a broker that specializes in foreign equities market. Safe, industrial countries like Switzerland, Australia, Germany, Japan, etc. short term bonds,etc. and...
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,506,201 times
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Quote:
Originally Posted by callahan12
Yes, unfortunately, this is true. Two scenarios could play out in this case
Fed stops injecting "liquidity" (aka inflation) after it realizes that it is truly irrelevant in curing the credit crisis. Stagflation for about 5-10 years until we revitalized our hollowed out manufacturing infrastructure and start saving again. Lower asset (house) prices and somewhat rapid rising consumer prices.
That's a BEST case scenario in my estimation.
Worst case scenario is the hyperinflation scenario. Read a little about what that entails (search on wikipedia: hyperinflation). If the government wants to switch to the "Amero" in the future, this would be an ideal strategy (not so ideal for pension recipients and cash savers). Since foreign creditors can't vote, just default on obligations and take the dollar offline. In the meantime, dollars could lose 10x, 100x, 1,000x (or more) of their current value. Germany witnessed millions of percent inflation in the 20s, and Hungary witnessed a billion million (no, really) percent inflation before crying uncle and adopting a Bolshevism as an alternative form of government.
Point is, when a heroin addict needs to get clean, you don't keep injecting more heroin. Withdrawal is no fun (wouldn't know firsthand), but it sure beats an overdose.
What you can do is consider getting out of any dollar denominated assets. It's difficult since most online trading outfits only buy this sort of stuff. Find a broker that specializes in foreign equities market. Safe, industrial countries like Switzerland, Australia, Germany, Japan, etc. short term bonds,etc. and...
Yep. Think you nailed it. Though I heading more for agriculture type investments. But some gold will be good to.
If you buy and sell ag in dollars, while the equities are illiquid you will likely lose purchasing power since the dollar has a LONG way to go before bottoming. So, make sure you don't see a 25% gain as something to celebrate if you have to use the same dollars to buy stuff when you sell your commodities.
What's astonishing is that Bernake announced the cut, and well before the January 29 meeting.
The economic news has been staggering. Unemployment is up, oil prices are way up, retail reports are even worse than they thought, manufacturing is at its lowest in five years, the housing market is in a free fall, the banks are in incredible trouble, and the stock market was going to tumble.
Usually, investors watch every move Bernake makes. Will he lower the rate? He raised his eyebrow, could this be a SIGN?
Today, in a panic against the inevitable recession, he announced a rate cut.
I love the new bank bail out plan.
To help squeezed banks deal with credit problems, the Fed recently created a new auction facility for financial institutions to go to for short-term loans. The Fed in December provided $40 billion worth of loans to banks and will provide another $60 billion in two auctions in January.
Bernanke said these auctions will continue “as long as necessary†to help banks get over credit humps so that they will keep lending to people and companies. The auctions, Bernanke said, “may thus become a useful permanent addition to the Fed’s toolbox.â€
Gawd!! I just cannot believe what I am hearing from the mouth of Ben Bernanke! He came on TV today and says that he is going to aggressively cut interest rates and PRINT more money to ward off a "possible recession". Firts of all, whether the government says so or not, anybody that has been to a gas pump or a grocery store in the past month already knows that inflation has crept back into the US economy after a 22 year absence. The government might say there is "no inflation" because they exclude food and fuel prices from the inflation indexes but anybody out here knows that our wallets are a bit more empty than they were last year. The value of our currency is already in free fall and printing up more of it will not help anything. The fact is that, yes Bernanke might cut the rate all the way to zero but it is only going to put off the day to pay the piper and the longer he puts off the economic CORRECTION which will probably be short and shallow as far as a recession goes, the MORE painful the recession is going to be when it does hit. Ask anybody that was around in the early 1980s about that when the fires of inflation raged, interest rates hit 20+ percent and unemployment was in double digits for months! That is exactly where we are headed again!
OMG, did somebody hijack this nickname or did KevK finally have a never-expected revelation?!
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,750,914 times
Reputation: 3587
Quote:
Originally Posted by sierraAZ
OMG, did somebody hijack this nickname or did KevK finally have a never-expected revelation?!
No! I am getting worried about our economic future. A few months ago, I was very optimistic. The worst I thought would happen is that we might have a mild short recession in the next months but it would only last a quarter or two and would be mild as far as unemployment goes- maybe 5.3% tops. And I thought that it would be needed to bring the economy back to a more realistic balance and keep inflation at bay as well as help make the dollar stronger. But Ben Bernanke is just plain nuts. If you have a small fire in your house, you don't throw gasoline on it which is what he is doing by further devaluing the dollar. I think he will cut by 50 basis points next time and, while this will make Wall Street very happy, when consumers see $4 a gallon gasoline and grocery prices up about 10% by summer, we will see a really nasty economy within a year- a recession that will last 3 or 4 quarters and go deep and wide.
Firts of all, whether the government says so or not, anybody that has been to a gas pump or a grocery store in the past month already knows that inflation has crept back into the US economy after a 22 year absence. The government might say there is "no inflation" because they exclude food and fuel prices from the inflation indexes but anybody out here knows that our wallets are a bit more empty than they were last year.
The question of including, or excluding (as with core inflation models), food and energy prices is a good one. The site below discusses the pros and cons of using either approach, and has several other references to explore. It's worth the read.
The question of including, or excluding (as with core inflation models), food and energy prices is a good one. The site below discusses the pros and cons of using either approach, and has several other references to explore. It's worth the read.
OMG, did somebody hijack this nickname or did KevK finally have a never-expected revelation?!
Was thinking the same thing, but did not really have the heart to dog him. But since you started . . . . .
Quote:
Originally Posted by KevK
No! I am getting worried about our economic future. A few months ago, I was very optimistic. The worst I thought would happen is that we might have a mild short recession in the next months but it would only last a quarter or two and would be mild as far as unemployment goes- maybe 5.3% tops. And I thought that it would be needed to bring the economy back to a more realistic balance and keep inflation at bay as well as help make the dollar stronger. But Ben Bernanke is just plain nuts. If you have a small fire in your house, you don't throw gasoline on it which is what he is doing by further devaluing the dollar. I think he will cut by 50 basis points next time and, while this will make Wall Street very happy, when consumers see $4 a gallon gasoline and grocery prices up about 10% by summer, we will see a really nasty economy within a year- a recession that will last 3 or 4 quarters and go deep and wide.
KevK, you are heading in the right direction, but still a ways to go.
This is a money = energy thing. Sort of like old school money = Gold = money. Things since about 1970-something have been a world where Money = energy, but oil in particular. From the 70s until now we have been feeding the margin with debt. Reagannomics, Greenspan and all the rest were no miracles -- they were merely idiots with National Credit Cards. Net result, we are now deeeeeep in debt.
Reason it hit in the 70s was that was when the US hit the upper limit of energy production. For a grow-or-die based model of economics that we use, hitting the upper level or "peak" means death. Now we have hit the same upper limit on the world-wide scale. You have probably seen this covered under some discussion of Peak Oil?
Callahan12's comparison of this to an addiction is quite true. But with Bush/Cheney we drew the dirty end of the sh1t stick when it comes to endinig our oil addiction. One might think with their common addiction backgrounds (both nabbed for drunk driving earlier in life, along with Cocaine, etc.) they would understand the long term cause and effects of addictive disorders, but they are still hard charging down the path as far as (mis)leading US deeper into this oil addiction.
A real decision point on taking US off oil, was the fake-believe war into Iraq, which really has become little more than a home-invasion robbery for the oil to feed our corporations. Long term it still leads to a crash, but addicts live for their next fix -- not tomorrow or the long-term.
Think if the resources and lives wasted so far on the oil wars were instead spent of taking US off oil. Our entire balance of trade would go positive and we would be facing a new Golden Age. As is, nothing but debt and death looking into the future. This is a far longer problem than "we will see a really nasty economy within a year- a recession that will last 3 or 4 quarters and go deep and wide."
Only real path out is for US to get off oil -- and most other carbon fuel, as well. Not reduce, not steal, not trade "credits," but actually get off the stuff. If not, it will destroy US economically before this is over.
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btw, for any folks that figure that was some sort Bush-hater routine, etc. -- dunno how to think of that as anything other than retarded. Both the D and R are owned by the corporations and most of both sides support the oil wars. If help is coming it is not from the top. We are on our own.
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