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Old 01-16-2009, 09:02 PM
 
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Quote:
Originally Posted by HappyTexan View Post
It's only low because energy is down over 20%.
Food on the otherhand went up and is not deflating.

The slump in oil is skewing the numbers.

Most of our food supply is based upon petroleum. The tractors to plow it and harvest it, the nitrate fertilizers to grow it, the trucks to ship it and the mills that process it all use oil. Food is about the only thing left but I doubt prices will increase if these trends continue.
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Old 01-17-2009, 03:08 PM
 
Location: Charlotte, NC
2,193 posts, read 4,615,861 times
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Quote:
Originally Posted by HappyTexan View Post
It's only low because energy is down over 20%.
Food on the otherhand went up and is not deflating.

The slump in oil is skewing the numbers.
Milk has gone down in price as well as eggs. I wouldn't be surprised to see other food items go down in price. I posted a NYT article a couple weeks ago here about the milk surplus.

Inflation though from my own definition is more money put into the system. Deflation is less money in the system circulating.

A 400,000 dollar house is now selling for 200,000 dollars. 200,000 dollars is gone from the money supply. So the money supply is deflating.

Another example are: Bankruptcies that are occurring. So if a person has 30,000 dollars in credit card debt and the bankruptcy wipes it out, there is another 30,000K gone from the money supply also.

Now we all know it's not just one bankruptcy at 30K or one house selling at a loss of 200K, it's happening at a record pace.
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Old 01-17-2009, 06:32 PM
 
3,283 posts, read 4,756,899 times
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Quote:
Originally Posted by killer2021 View Post

i think that if we didn't have a powerful military to enforce dollar hedgemony, we'd be in a similar position. just my opinion
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Old 01-17-2009, 07:55 PM
 
3,853 posts, read 11,854,256 times
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Quote:
Originally Posted by 58robbo View Post
i think that if we didn't have a powerful military to enforce dollar hedgemony, we'd be in a similar position. just my opinion
I totally agree.
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Old 01-20-2009, 10:26 AM
 
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Hyperinflation...




Amid Layoffs Companies Take Rare Step Cutting Pay: Tech Ticker, Yahoo! Finance
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Old 01-20-2009, 08:02 PM
 
Location: Texas
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how much longer can you expect the world to hold dollars when our debt to GDP ratio puts treasuries at junk status?
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Old 01-21-2009, 11:18 AM
 
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Quote:
Originally Posted by TexianPatriot View Post
how much longer can you expect the world to hold dollars when our debt to GDP ratio puts treasuries at junk status?
Hi TexianPatriot,


What does debt to GDP ratio have to do with this? Too bad most people actually think a high ratio is bad. Look at Japan

170% of GDP (2007 est.)


What does this number mean? Compare to the US

60.8% of GDP (2007 est.)

I will say it again until I am absolutely blue in the face. All money is debt. Every single dollar or Yen is another's debt. If you have a dollar it means someone else owes it to a bank. Any analysis of any kind that does not understand what this means is a complete and utter statement of nonsense of the highest possible magnitude that cannot possibly be overstated.

The 170 % of public debt in Japan represents the low personal debt of individual Japanese. Since far fewer fractionally reserve created Yen flow though the economy a much larger portion of public debt(Yen) are passed around as money and not at a debt to a bank. If personal debt went up it would inflate Yen and shrink the public,interest free currency circulating actually adding to the burden of private debt, just like us. Further more all of this debt is internally held thus Japanese trade in their own debt. The GDP ratio would have been even higher were it not for carry trade where speculators created most of the Yen credit markets.
The only real debt is that which is held overseas. If I were China and Japan I would be buying but then Japan may be a little gun shy from the Pebble Beech fiasco and the like during their last American buying spree.


So what can we conclude? The higher the ratio of public debt to GDP essentially means few dollars circulate as credit issued from a bank. In other words the public is not in debt.

The sooner ya'll figure out that private debt is far worse than public debt the better off we will be but sadly time is running out and the savior of mankind Obama is trying to encourage private debt at interest and handing money to banks along side a weak stimulus. If is works it will mean the GDP ratio will be quite low as more Americans go further into debt and increase the credit money supply. If it doesn't and as currently planned it won't we are looking at 20% unemployment as the contraction increases in severty. A nice fire sale for those who can keep getting federal bailouts but you will not be robbed by inflation but rather insolvency.
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Old 01-21-2009, 03:50 PM
 
Location: Texas
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Japan also happens to be a creditor nation that can liquidate treasuries when it gets a margin call. Us on the other hand, all we can do is print.

Quote:
Originally Posted by gwynedd1 View Post
Hi TexianPatriot,


What does debt to GDP ratio have to do with this? Too bad most people actually think a high ratio is bad. Look at Japan

170% of GDP (2007 est.)


What does this number mean? Compare to the US

60.8% of GDP (2007 est.)

I will say it again until I am absolutely blue in the face. All money is debt. Every single dollar or Yen is another's debt. If you have a dollar it means someone else owes it to a bank. Any analysis of any kind that does not understand what this means is a complete and utter statement of nonsense of the highest possible magnitude that cannot possibly be overstated.

The 170 % of public debt in Japan represents the low personal debt of individual Japanese. Since far fewer fractionally reserve created Yen flow though the economy a much larger portion of public debt(Yen) are passed around as money and not at a debt to a bank. If personal debt went up it would inflate Yen and shrink the public,interest free currency circulating actually adding to the burden of private debt, just like us. Further more all of this debt is internally held thus Japanese trade in their own debt. The GDP ratio would have been even higher were it not for carry trade where speculators created most of the Yen credit markets.
The only real debt is that which is held overseas. If I were China and Japan I would be buying but then Japan may be a little gun shy from the Pebble Beech fiasco and the like during their last American buying spree.


So what can we conclude? The higher the ratio of public debt to GDP essentially means few dollars circulate as credit issued from a bank. In other words the public is not in debt.

The sooner ya'll figure out that private debt is far worse than public debt the better off we will be but sadly time is running out and the savior of mankind Obama is trying to encourage private debt at interest and handing money to banks along side a weak stimulus. If is works it will mean the GDP ratio will be quite low as more Americans go further into debt and increase the credit money supply. If it doesn't and as currently planned it won't we are looking at 20% unemployment as the contraction increases in severty. A nice fire sale for those who can keep getting federal bailouts but you will not be robbed by inflation but rather insolvency.
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Old 01-23-2009, 06:27 AM
 
706 posts, read 1,187,523 times
Reputation: 438
Quote:
Originally Posted by gwynedd1 View Post
Hi TexianPatriot,


What does debt to GDP ratio have to do with this? Too bad most people actually think a high ratio is bad. Look at Japan

170% of GDP (2007 est.)


What does this number mean? Compare to the US

60.8% of GDP (2007 est.)

I will say it again until I am absolutely blue in the face. All money is debt. Every single dollar or Yen is another's debt. If you have a dollar it means someone else owes it to a bank. Any analysis of any kind that does not understand what this means is a complete and utter statement of nonsense of the highest possible magnitude that cannot possibly be overstated.

The 170 % of public debt in Japan represents the low personal debt of individual Japanese. Since far fewer fractionally reserve created Yen flow though the economy a much larger portion of public debt(Yen) are passed around as money and not at a debt to a bank. If personal debt went up it would inflate Yen and shrink the public,interest free currency circulating actually adding to the burden of private debt, just like us. Further more all of this debt is internally held thus Japanese trade in their own debt. The GDP ratio would have been even higher were it not for carry trade where speculators created most of the Yen credit markets.
The only real debt is that which is held overseas. If I were China and Japan I would be buying but then Japan may be a little gun shy from the Pebble Beech fiasco and the like during their last American buying spree.


So what can we conclude? The higher the ratio of public debt to GDP essentially means few dollars circulate as credit issued from a bank. In other words the public is not in debt.

The sooner ya'll figure out that private debt is far worse than public debt the better off we will be but sadly time is running out and the savior of mankind Obama is trying to encourage private debt at interest and handing money to banks along side a weak stimulus. If is works it will mean the GDP ratio will be quite low as more Americans go further into debt and increase the credit money supply. If it doesn't and as currently planned it won't we are looking at 20% unemployment as the contraction increases in severty. A nice fire sale for those who can keep getting federal bailouts but you will not be robbed by inflation but rather insolvency.
Hi Gwynned,

I'm curious, you are obviously well educated in economics. Doesn't the high Debt to GDP explain their lack of ability to sustain growth and isn't that what we are faced with?
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Old 01-23-2009, 09:12 AM
 
18,347 posts, read 16,300,603 times
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Quote:
Originally Posted by jimmyP View Post
Hi Gwynned,

I'm curious, you are obviously well educated in economics. Doesn't the high Debt to GDP explain their lack of ability to sustain growth and isn't that what we are faced with?
Hi jimmyP,

I don't think a GDP to national debt ratio tells much beyond the current ratio of public debt to private debt. Japanese don't like to take on debt. Japan tried the government spending approach of public works which is just another way easy money for insiders. This results in a high ratio of GDP since much Yen was not created as private debt.
Also the problem with Japan for the average Japanese was their Yen was constantly being weakened by complicity of their export market and carry trade. The buying power of the Yen would naturally move up but is was prevented by the purchase of treasuries and Yen financing by speculators. If Japanese found themselves ever more wealthy they would buy. So the reason why Japan was so sluggish is because no matter how much they produced the Yen just would not budge.

We can see the pent up buying power now with Yen actually in more demand than dollars as Yen financed positions are being liquidated.


http://www.nytimes.com/2008/10/28/bu...ess/28yen.html
For much of this decade, Japanese and foreigners alike borrowed money in Japan, where interest rates were very low and money was therefore cheap. They invested that money in higher yielding assets across the world, from home loans in Budapest and Seoul to equities in Mumbai.
It really is amazing how banks can agree to lend money overseas and weaken the buying power of the Yen at the expense of the over worked Japanese. Its just accepted as just the way it is. With buying power constantly being siphoned off, how could Japan itself grow? Yen was spent outside the country.

If the rest of the world had escaped the same fate of depression that was exactly what we would have faced. At current interest rates any economic movement overseas would have taken dollars in carry trade overseas. Banks would not lend to Americans with bad credit but rather off shore to those with good credit. Bailing out banks in that situation would have resulted in our banks loaning money overseas doing absolutely nothing here just like in Japan(who just refused to go into debt). Since no one can or will borrow anywhere the dollar will go up in buying power.
Too bad for a nation in private debt since dollars increasing in value actually works against us unlike in Japan who would have had a wad full of hard currency with every pay check.

Thats how I see it anyway.
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