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Old 12-14-2008, 07:34 PM
 
Location: State of Superior
8,632 posts, read 14,237,613 times
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The Chinese are still a ways behind the West , as far as the masses are considered. They can change quickly , and start to self contain their wealth. It will slow down their progress , but , remember , they are still a Communist Country.
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Old 12-15-2008, 04:10 AM
 
12,869 posts, read 13,435,706 times
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Quote:
Originally Posted by scuba steve View Post
The big question I keep hearing about in the two financial forums I browse is when we'll move from a deflationary environment to inflation. Any guesses when it'll happen?

Aside from gas prices I haven't seen any deflation btw.
the biggest foreign-exchange strategists and investors say the best may be over for the dollar after a four-month, 24 percent rally.

The currency weakened 5.9 percent measured by the trade- weighted Dollar Index after strengthening between July and November as investors bought the greenback to flee riskier assets and repay dollar-denominated loans from lenders reining in credit. Ever since peaking on Nov. 21, the dollar fell against all 16 of the most-widely traded currencies, according to data compiled by Bloomberg.
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Old 12-15-2008, 04:36 AM
 
370 posts, read 937,102 times
Reputation: 674
Quote:
Originally Posted by KevK View Post
I am not worried about the recession. I think all the gloom and doom was way overblown to begin with and caused an over reaction that all of us will regret soon enough.
The fact that we are printing and throwing maybe trillions of dollars at this thing is going to lead to things you do not even want to think about. Things that will make today seem small.
Eventually and soon, the Arabs and Chinese who buy our debt are going to quit being stupid and figure out that this stuff is never going to get paid and they are going to quit showing up at the auctions. And, since nobody else wants to buy trillions in worthless paper, that means the Fed itself is going to have to buy it by printing money.
I predict that, in a few years, this recession will be a memory. Nobody will be talking about it anymore. What they will be talking about is the hyper inflation beginning to creep into the economy. And in 4 years, when it is running at 15% or more a year, people will REALLY be talking about it!
Im not as knowledgable about some of this and without sounding too much like an idiot could you please give some examples. I think people who are not as smart about this stuff are the ones who really panic because they don't understand it(me). Will we have inflation because our money will be worth less than other countries due to our actions now? I think Im understanding that as the reason. Please clarify if not. And, how much more will things cost for example say a gallon of milk? Will the inflation affect different products differently? and What will be the end result after this happens?
All of this has me and my husband worried. I was raised on a farm and we are now looking at moving to a rural area where I actually got a much better job offer recently(Im a nurse). We are going to try and live at a place where we can grow our own garden. He already hunts so we regularly stock our freezer with venison, turkey, etc and go fishing for fish. Im worried about the prices of food going too high. Maybe we will even get a goat or cow for milk for our child. Do you think I am worrying too much?
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Old 12-15-2008, 05:20 AM
 
Location: Beautiful Lakes & Mountains of East TN
3,454 posts, read 6,719,197 times
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I think in its simplest terms, we'll have inflation because there is simply too much of it.

The "rescues" and bailouts are flooding the markets with money. However, right now, nobody's spending it (i.e. the banks that it was given to, so they could "give more credit" aren't giving more credit). So the money hasn't reached the market yet.

Hence, we're not seeing inflation yet. In fact, the dollar's doing pretty good because the rest of the world's economy stinks too.

Once all those dollars wind up in the market, we'll see things start to go up. Look up Zimbabwe Hyperinflation on google to see how effective it is to solve a problem by simply printing more money.

p.s. You're not worrying too much. Get the preps now and learn to use them before it's an emergency and you're forced to all at once.
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Old 12-15-2008, 08:21 AM
 
3,283 posts, read 4,756,564 times
Reputation: 753
Quote:
Originally Posted by scuba steve View Post
The big question I keep hearing about in the two financial forums I browse is when we'll move from a deflationary environment to inflation. Any guesses when it'll happen?

Aside from gas prices I haven't seen any deflation btw.

huh? home prices, sales before xmas, car prices, boats, restaurant deals.... everything is going down.
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Old 12-15-2008, 05:00 PM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,896,726 times
Reputation: 3587
Quote:
Originally Posted by runrgirl View Post
Im not as knowledgable about some of this and without sounding too much like an idiot could you please give some examples. I think people who are not as smart about this stuff are the ones who really panic because they don't understand it(me). Will we have inflation because our money will be worth less than other countries due to our actions now? I think Im understanding that as the reason. Please clarify if not. And, how much more will things cost for example say a gallon of milk? Will the inflation affect different products differently? and What will be the end result after this happens?
All of this has me and my husband worried. I was raised on a farm and we are now looking at moving to a rural area where I actually got a much better job offer recently(Im a nurse). We are going to try and live at a place where we can grow our own garden. He already hunts so we regularly stock our freezer with venison, turkey, etc and go fishing for fish. Im worried about the prices of food going too high. Maybe we will even get a goat or cow for milk for our child. Do you think I am worrying too much?
Inflation is a nasty thing and much harder to deal with than recessions. Anybody that lived in the 70s can tell you of the inflation of that decade which was relatively "mild" at about 10% a year- meanning that the prices on everything double about every 10 years. It took a year of very nasty recession in 1981 and interest rates of over 20% to finally break it. Since then we have had virtually almost 0 inflation and pretty good times- until now.

Inflation is what happens when there are "too many dollars chasing too few goods" and the only cures for it are to either cut the supply of money or raise the output of goods. For the past several years technology has increased productivity greatly which has been a force in checking inflationary pressures and allowed the government to deficit spend without inflation. But that party may be over because you cannot print trillions of dollars and dump them into the economy.
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Old 12-15-2008, 05:25 PM
 
Location: San Diego California
6,797 posts, read 6,483,155 times
Reputation: 5180
Quote:
Originally Posted by KevK View Post
I am not worried about the recession. I think all the gloom and doom was way overblown to begin with and caused an over reaction that all of us will regret soon enough.
The fact that we are printing and throwing maybe trillions of dollars at this thing is going to lead to things you do not even want to think about. Things that will make today seem small.
Eventually and soon, the Arabs and Chinese who buy our debt are going to quit being stupid and figure out that this stuff is never going to get paid and they are going to quit showing up at the auctions. And, since nobody else wants to buy trillions in worthless paper, that means the Fed itself is going to have to buy it by printing money.
I predict that, in a few years, this recession will be a memory. Nobody will be talking about it anymore. What they will be talking about is the hyper inflation beginning to creep into the economy. And in 4 years, when it is running at 15% or more a year, people will REALLY be talking about it!
Kev, are you still making predictions? There are a few missing pieces to your puzzle. First of all in order to predict what is going to happen, you must understand how things work to begin with. While it is true that the Government is printing massive amounts of money, it is unlikely to cause inflation in the foreseeable future; in fact we can expect more deflation for the next few years. The reason for this is that you are not taking into account the amount of money which is being destroyed. In a fiat money system whenever debt is paid off or written off, that amount of money disappears. In the same way the money is produced out of thin air when money is loaned by banking system, it disappears when the debt disappears. There is currently hundreds of billions in debt disappearing. The other thing that is wrong with your statement is that while hundreds of billions are being given to banks, the money is not being loaned and put into circulation; it is being kept in reserves in order to make the banks solvent. Banks need to have reserves to cover every foreclosure; they are so short on reserves even with the bail out money they cannot foreclose on homes that are now delinquent without becoming insolvent themselves. Unless the money gets into the hands of the public it is not inflationary. Now for my prediction, deflation and recession will continue and become worse. Unemployment will spike after the New Year causing people to deleverage more of what they have to sell. Bankrupt businesses will flood the marketplace with inventory that needs to be liquidated in a market with few buyers, causing prices to fall further and making it harder for surviving businesses. Those businesses lay off workers, who default on mortgages, and the cycle repeats. This is what is called a feedback loop and for those of you who have not experiences a recession it is what drives the process. As far as no market for Treasury Debt the return on 3 mo Treasuries is currently 0%, because there is huge worldwide demand. The reason for that is smart money knows all they have to do is hang onto cash to reap huge profits in the future because of deflation. If you really believe what you say you should invest heavily in commodities and real estate, personally I will keep mine in cash.
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Old 12-15-2008, 05:43 PM
 
Location: Road Warrior
2,015 posts, read 5,089,539 times
Reputation: 798
Quote:
Originally Posted by darstar View Post
The Chinese are still a ways behind the West , as far as the masses are considered. They can change quickly , and start to self contain their wealth. It will slow down their progress , but , remember , they are still a Communist Country.
That is questionable - there is one party controlling the country without a doubt, the communist alright, but the system it runs by is so-called Type B socialism with sort of an under the veil capitalism. There is no way China could have risen so rapidly if it were strictly communism. It is projected in 2025 that China will become the 2nd superpower, in part well thanks to us. We opened the doors to China in the Nixon era, sent about a trillion dollars and manufacturing jobs their way. It really says something or demonstrates rather how patriotic our leaders really are by selling our jobs overseas and amassing debt our children will have to unfortunately carry one day.
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Old 12-15-2008, 06:39 PM
 
Location: State of Superior
8,632 posts, read 14,237,613 times
Reputation: 2777
Quote:
Originally Posted by RangerDuke08 View Post
That is questionable - there is one party controlling the country without a doubt, the communist alright, but the system it runs by is so-called Type B socialism with sort of an under the veil capitalism. There is no way China could have risen so rapidly if it were strictly communism. It is projected in 2025 that China will become the 2nd superpower, in part well thanks to us. We opened the doors to China in the Nixon era, sent about a trillion dollars and manufacturing jobs their way. It really says something or demonstrates rather how patriotic our leaders really are by selling our jobs overseas and amassing debt our children will have to unfortunately carry one day.
The party controls the money , manipulates it , and prints it , like no other place on earth. They may have embraced capitalism , but with a flavor all their own. US industries were looking at greed , they saw a billion people as potential customers. Funny how the Chinese turned the tables the other way....
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Old 12-16-2008, 06:00 AM
 
12,869 posts, read 13,435,706 times
Reputation: 4453
Quote:
Originally Posted by RangerDuke08 View Post
That is questionable - there is one party controlling the country without a doubt, the communist alright, but the system it runs by is so-called Type B socialism with sort of an under the veil capitalism. There is no way China could have risen so rapidly if it were strictly communism. It is projected in 2025 that China will become the 2nd superpower, in part well thanks to us. We opened the doors to China in the Nixon era, sent about a trillion dollars and manufacturing jobs their way. It really says something or demonstrates rather how patriotic our leaders really are by selling our jobs overseas and amassing debt our children will have to unfortunately carry one day.
you are right about our country's biggest mistake being job exportation. i think that the only reason our dollar isn’t worth one penny is due to our rivals keeping it afloat for us, but not much longer! We are now borrowing time itself.
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