Hyperinflation? Not in America.

[jreeves]

First of all, I think we ought to kiss TORO's ass for taking the time to put so much effort into schooling us on this issue.

Kudos are definitely in order.

Now, as to inflation and deflation?

Our economy is in the crapper because American losts the PERCEIVED WEALTH we thought we had when the market pricing was inappropriately inflated and the prices of real estate was wildly out of align with how much money most of us make, too.

Hence the "monetary velocity" has crapped out (people aren't spending)

And note that savings (which was down to 0%!!!) is now up to about 5%!! (historically what American saved)

So a people who IMAGINED they had a lots more money in stocks and real estate, upon finding that they didn't really have all that much money, stopped spending and started saving.

And what happens in a CONSUMER-DRIVEN ECONOMY, when consumers stop buying stuff?

duh!

Folks, we NEED some inflation. What we need is MORE MONEY CIRCULATING IN THE SYSTEM, not less!

And that is WHY the government is borrowing money.

Basically, to prevent our economy from going into a economic anaphylatic shock.

Of course, in my opinion, the BLEEDING ARTERIAL WOUND that is FREE TRADE is going to continue to plague us.

American didn't just lose the industrial jobs it once had, America has created a system of trade policies and tax laws which insure that we will also NOT CREATE JOBS in future's industries, either.

This faith based belief in FREE TRADE is the major problem facing this nation.

We invent industries here, and then the moment they become viable, they go offshore to make the stuff we'll need.

But unemployed pAmerican do not make great consumers, folks.

We are screwing our working class to the benefit of the investor class, and as the investor class is (hopefully) now beginning to realize, they cannot SELL to people who don't have JOBS!

duh!

We have slowly been putting ourselves into this bind by opening one market after the other to foreigh imports.

And we cannot just close the borders now, because we do EXPORT and the trade war that would ensuew would screw the entire world, us included.

But we can slowly and surely start initiating a FAIR TRADE policy to insure that Americans can work too.

And, if China doesn't want to end up holding a trillion dollars in worthless bonds, they're going to WANT to work WITH US to see to it that the trade imbalance that they have enjoyed tilts back toward the USA somewhat.

There is NO FREE LLUNCH in economics.

There is no SIMPLE SOLUTION to these problems.

There are difficult things to balance to insure that we do not DISRUPT our economy and the economies of our trade partners, too.

But the time when AMERICAN THE WEALTHY NATION can just give away the farm to other nations is past.

America is NOT a wealthy nation, right now.

We are the world's largest DEBTOR nation.

If we do not invest in AMERICAN INDUSTRY, then inflation is only a small part of the problem we're going to be facing.

Because a recently empoverished well armed people who think they are not peasants and slaves are easily driven into very unpleasant modes of thinking.

The economic destruction of Germany gave us Hitler.

Now imagine what wierdness the AMERICANS can come up with if ENOUGH OF US FIND THAT WE HAVE NOTHING TO LOSE!

Hmm...then we should have had a point in time where we have been circulating this much money right?

 

[dec8ur]

well toro i stand corrected.

 

[Toro]

well toro i stand corrected.

I don't want everyone to think that everything is hunky-dory though. I first started investing in gold in 2002, and I was told that in the fund I ran, I was the largest owner of shares in gold companies in the Southeast. I don't know if that is true or not, but that is what I was told. At various times, I have had half my net worth in gold. I own none now, but I understand the fundamental argument which says that gold is going to $2000 or $3000 an ounce, and I may own large amounts again in the future.

 

[dec8ur]

well toro i stand corrected.

I don't want everyone to think that everything is hunky-dory though. I first started investing in gold in 2002, and I was told that in the fund I ran, I was the largest owner of shares in gold companies in the Southeast. I don't know if that is true or not, but that is what I was told. At various times, I have had half my net worth in gold. I own none now, but I understand the fundamental argument which says that gold is going to $2000 or $3000 an ounce, and I may own large amounts again in the future.

let me clarify, i stand corrected on the fact that china is holding most of their reserves in debt not dollar (even though they do have a significant holding of dollars) but the fact that the fed cannot prevent hyper-inflation, i stand by that. do i personally think that hyper-inflation is going to happen? not very likely, but i am hedging right now against that possibility

 

[Paulie]

I see where Toro is going with his assertion. It's too easy to just ASSUME that other countries would massively dump dollars, but the biggest question you have to ask yourself is "what would they replace dollars with?"

Until another nation (or union) can back their currency with the military prowess of the US, we're going to be the issuers of the world's reserve currency.

The only thing that can change that otherwise, is for the conspiracy theory of a one world currency to come to fruition, or for the US to somehow be annihiliated.

If the US was annihilated, I'm not sure the question of "what's the next reserve currency going to be", is going to be very relevant at that point.

I'd think if China dumped dollars on our shore, we'd respond aggressively. I'm sure they are quite aware of that. What would be the point?

 

[neurosport]

Good post Toro.

now you just have to explain Stagflation ...

 

[editec]

China has a large trade surplus, but only with America. With the rest of the world, its net trade balance was in balance or a slight deficit (or at least it was before the recession). The country developed primarily to serve the US market.

FREE TRADERS, please note the above?

If, as so many of you believe, the reason that America is losing the trade war is just because of unions and our outrageous tax laws, then China would be enjoying that same kind of trade imbalance with the rest of the modern industrialized world which has stronger unions than America\ and higher taxes on their corporations, too.

So are you all getting it yet?

America is fucking ITSELF with our insane trade policies. Some of our international coporations who have factories in China might be getting richer, but WE AS A NATION (and as individuals in that nation) are getting poorer.

No nation but America is in this kind of trouble.

 

[editec]

Gold? There is not enough gold in the world. There are only 150,000 tons of gold on the entire planet. If China started buying gold in size, the price would skyrocket.

And the above addresses another DELUSIONAL belief of our libertarian gold bug chums.

GOLD cannot be specie because there isn't enough gold to make it go of it.

There it is...gold is just another commodity. A decent hege against inflation, but not a viable specie.

 

[editec]

I see where Toro is going with his assertion. It's too easy to just ASSUME that other countries would massively dump dollars, but the biggest question you have to ask yourself is "what would they replace dollars with?"

Until another nation (or union) can back their currency with the military prowess of the US, we're going to be the issuers of the world's reserve currency.

The only thing that can change that otherwise, is for the conspiracy theory of a one world currency to come to fruition, or for the US to somehow be annihiliated.

If the US was annihilated, I'm not sure the question of "what's the next reserve currency going to be", is going to be very relevant at that point.

I'd think if China dumped dollars on our shore, we'd respond aggressively. I'm sure they are quite aware of that. What would be the point?

There you go, you GOT it.

China's recent affuence is a direct result of the USA's recent empoverishment.

China cannot CRASH our currency (by dumping their dollar based bonds) because were they to do that, WALMART couldn't sell their shit.

We don't sell shit to China compared to what they ship to us.

Hence China ends up with huge amounts of US money. Money which they must invest back into the USA debts.

Basically we're transferring ownership of the USA to the allience of China's wealthy class and America's international corporate class which facilitates this trade.

Why have we created policies to allow this to happen?

I don't have a clue, EXCEPT possibly that those American corporate interests who ARE benefitting from this behavior have convinced our CONGRESS that this is a good idea.

But all our current economic problems can be ultimately traced to the DEINDUSTRIALIZATION of the USA which is in large part the result of this stupid trade policy we have with China and the third world.

Every problem in America can be traced to the fact that the American workers have been losing purchaing power thanks to thse policies.

The boom bust in investments, the real estate crises all of it has at its heart this dumb dumb policy.

People like Toro, can survive this because they can can invest based on what they see happening.

But the working classes cannot do shit to protect themselves because they cannot invest to take advantage of the changing circumstances in markets, currencies and commodities pricing.

WE either start creating policies that help the American working class soon, or this nation is going down.

Ya'll who are buying into the laizze fair nonsense about free markets making everybody richer are being mislead.

 

[Terral]

Hi Toro:

OK, it is time to put an end to this silliness. Certain people who believe every conspiracy that comes down the pike believe that America's future is Zimbabwe, where hyperinflation hit 79.6 billion percent. In fact, by one estimate, inflation in Zimbabwe hit an annualized return of 430,000,000,000,000,000,000,000,000,000,000,000,000%. I don't even know how to pronounce that number.

The reason that many people are concerned about hyperinflation of the U.S. Dollar is because many people are saying that hyperinflation of the U.S. Dollar is coming! The best illustration of what is coming down the pike is given by Glenn Beck in this short video:

[ame="http://www.youtube.com/watch?v=dlHBYQrCnIk"]Glenn Beck On Hyperinflation[/ame]

Nobody is saying that Zimbabwe-type Hyperinflation will happen overnight, but that country also started off with inflation that became far worse. Gerald Celente (Trends Research) makes the America/Zimbabwe connection here:

[ame="http://www.youtube.com/watch?v=4zmfTPePjgA"]America Like Zimbabwe: Total Collapse Part 1[/ame]

Gerald Celente is sending out warnings that we are entering the Greatest Depression and that the Panic of 2008 is transformed into the Collapse of 2009 that includes the crashing U.S. Economy and Dollar. Mark Farber is saying the exact same thing:

[ame="http://www.youtube.com/watch?v=2hyRPRWaPpo"]Marc Farber On Collapsing Dollar/Hyperinflation[/ame]

Now, it should be apparent why comparing America to Zimbabwe is pretty silly. Unfortunately, alarmists pray on the gullible, and sometimes the gullible can be persuasive to the less gullible. Normally I don't go to all the time and effort to do this, but since I've been called out, I thought it would be appropriate to do so.

Too many economists and commentators are saying the exact same thing that the USA is on the road to serious Hyperinflation. Even Christian Patriots are sending out warnings . . .

[ame="http://www.youtube.com/watch?v=VuoaGOYCP8E"]Economic Collapse 2009 (Hyperinflation)[/ame]

The reason why people believe hyperinflation is coming is because of the rapid expansion of the balance sheet of the Federal Reserve, particularly graphs that look like this . . .

Terry Coxon (Sr. Economist, Casey Research) is saying the exact same thing . . .

[ame="http://www.youtube.com/watch?v=OEfYY3cANqE&feature=related"]Great Depression Plus Hyperinflation[/ame]

Today is going to look like the ‘good ole days,’ when inflation mutates and the 800-pound Hyperinflation Gorilla starts to ROAR and the ‘big hammer’ drops. Peter Schiff (his Vlogs are excellent) is also saying the VERY SAME THING! He is concluding that “Ron Paul was Right.”

[ame="http://www.youtube.com/watch?v=SqLXNCtgCFc"]Peter Schiff – Hyperinflation[/ame]

Peter Schiff >> “The whole idea is to get out of the US Dollar. It is on the verge of collapse. The people who don't get out of the US dollar are going to be completely broke and that is obvious. Look at what Ben Bernanke did. Interest rates are zero. Money is free.

Bernanke is going to run up printing presses as fast as he can. This is pure inflation Latin American style. This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.

I am just as convinced that people who have their money in US dollars are going to be just as broke as people who have their money with Madoff.” (transcript)

Now Toro can be bull-headed and bring out two dozen ungodly charts to try and convince everyone that ‘no conspiracy exists’ (my signature) to lull everyone back to sleep, but far too many economist-types are saying the precise and exact same thing! Jim Rogers says that Hyperinflation WILL CONSUME US and that . . .

[ame="http://www.youtube.com/watch?v=UqQnScNE78s"]America Is Counting Its Last Breaths!!![/ame]

I am not going to paste the transcript information for all of these Hyperinflation witnesses all saying the same things, but what the U.S. Govt is doing is making the situation FAR WORSE.

[ame="http://www.youtube.com/watch?v=HzKQyBY0Qys"]Lyndon LaRouche Addresses Imminent Hyperinflation Threat[/ame]

The U.S. Govt is playing a balance game between Inflation/Hyperinflation and Deflation that either way leads to eventual COLLAPSE. The Financial Derivatives Sector is the ‘driver’ of the whole crisis and the Derivatives DEBT is measured in quadrillions of dollars (story and story)!

[ame="http://www.youtube.com/watch?v=r66MMYyz9VI"]Finanical Derivatives Explanation[/ame]

Many bets were placed on whether home loans ‘would’ or ‘would not’ be paid off and 10,000 foreclosures EVERY DAY (story) are piling up . . . and have been for some time. The best source I know on this planet for explaining what is coming down the pike is Lyndon LaRouche from the above video. His 6-part series on “What Is Empire?” is very good for getting a good handle on what is really going on.

[ame="http://www.youtube.com/watch?v=-dOaHgkAHP4&feature=PlayList&p=E141DDF52609A4D0&index=0"]LaRouche: April 28, 2009 – What Is Empire? 1/6[/ame]

What I would like to see from El Toro is a series of economists (like in my post) that agree with his rosy outlook for what is coming down the pike . . .

GL,

Terral

 

[Toro]

Terral

"Many economists" are not saying that hyperinflation is coming. Very few of them are.

And you are missing the point. I am not saying that the scenario is "rosy." I just finished putting on a big short position on the market right here. What I am saying is that hyperinflation is not coming. And BTW, Jim Rogers, Peter Schiff, Gerard Celente, let alone Glen Beck and that douchebag Lyndon LaRouche are not economists, though Marc Faber is, and though I respect him greatly as he is the author of one of the best investment books I have ever written, he is wrong about hyperinflation and America defaulting on its debt. BTW, I have a degree in economics and lectured finance at a university, if you are keeping score. And my track record is better than Peter Schiff and I believe Marc Faber over the past decade.

Here is Nobel Prize winning economist, Alan Binder, explaining why there won't be hyperinflation.

The mountain of reserves on banks’ balance sheets has, in turn, filled the inflation hawks with apprehension. But their concerns are misplaced. To understand why, start with the basic economics of banking, money and inflation.

In normal times, banks don’t want excess reserves, which yield them no profit. So they quickly lend out any idle funds they receive. Under such conditions, Fed expansions of bank reserves lead to expansions of credit and the money supply and, if there is too much of that, to higher inflation.

In abnormal times like these, however, providing frightened banks with the reserves they demand will fuel neither money nor credit growth — and is therefore not inflationary.

Rather, it’s more like a grand version of what the Fed does every Christmas season. The Fed always puts more currency into circulation during this prime shopping period because people demand it, and then withdraws the “excess” currency in January.

http://www.nytimes.com/2009/06/21/business/economy/21view.html

 

[Terral]

Hi Toro:

Terral

"Many economists" are not saying that hyperinflation is coming. Very few of them are.

And you are missing the point. I am not saying that the scenario is "rosy." I just finished putting on a big short position on the market right here. What I am saying is that hyperinflation is not coming . . .

Put down the Loyal Bushie/Obama Kool-aid and back away from trying to convince anyone about what is 'not' coming. BTW, I will take the word of all these witnesses than anything coming from you. This is about transferring liquid assets now in U.S. Dollars into something else, OR go down with the U.S. Dollar Ship. Too simple . . .

The privately-owned FED has been propping up components of the U.S. Economy that have IMPLODED and very soon the balancing act will hit a snag (Treasury Bond Auctions). . . Watch and see . . .

PS. If you want to talk up the Economy and Markets, then go ahead and explain how to solve the Derivatives Fungus Problem.

[ame=http://www.youtube.com/watch?v=nLV1DBmr4xc]Derivatives And HyperInflation[/ame]

GL,

Terral

 

[Toro]

Put down the Loyal Bushie/Obama Kool-aid and back away from trying to convince anyone about what is 'not' coming. BTW, I will take the word of all these witnesses than anything coming from you.

I'm sure you would. Your hurdle of credulity is if it is a mind-blowing conspiracy and its on youtube.

Feel free to make an argument without youtube videos, Terral. That last one, BTW, did not tell you how an implosion in the derivatives market leads to hyperinflation, though I suppose I could see someone who doesn't understand the subject at hand might find it believable.

An implosion of the derivatives market is not inflationary. It is deflationary for all the reasons I listed in the OP. A collapse of the derivatives market reduces the amount of credit in the economy.

A few more articles why hyperinflation is not coming, though I'm not so sure about the second article.

We know that the Fed's balance sheet has exploded (to $2.07 trillion), but that is only half the story. Data from the St Louis Fed shows that the "monetary multiplier" has collapsed from a decade-average of 1.6 to the depths of 0.893. The "velocity" of money has slowed to a crawl.

Professor David Beckworth from Texas State University said the Fed's efforts to boost the money supply are barely keeping pace with the deflation shock. Stimulus is not gaining traction. The credit system is broken.

Where will the inflation impulse come from given that capacity use is at a post-war low of 68pc in the US, and nearer 60pc worldwide? The immediate threat is wage deflation.

Tim Congdon – a hard-money Friedmanite from International Monetary Research – says the Fed is still not easing enough, perhaps because it is spooked by so much criticism or faces a mutiny by its own hawks. "If Ben Bernanke and his officials are listening to this sort of stuff and taking it seriously, they are making the same mistake as the Fed in the early 1930s," he said. The US "output gap" is near 7pc. That is a powerful lid on inflation.

The sin has been to let M2 money growth wither since January, to let bank lending contract at a 5pc annual rate, and to let 10-year bond yields rise to nearly 4pc. The Fed pays lip service to the Friedman-Schwartz theory of the Depression, but has not digested the lesson.

Don't believe the hyperinflation hype - dare to make cuts - Telegraph

Why the Fed Isn't Igniting Inflation - BusinessWeek

 

[neurosport]

I am sorry if i missed it Toro but did you address Stagflation yet ?

Your Keynesian ass thinks inflation can only come during a period of economic growth so how come history says otherwise ?

 

[Toro]

I am sorry if i missed it Toro but did you address Stagflation yet ?

Your Keynesian ass thinks inflation can only come during a period of economic growth so how come history says otherwise ?

You can kiss my Keynesian ass. I was raised on monetarism. Pay attention.

I didn't say inflation comes only in a period of economic growth. I explained why in this deflationary environment hyperinflation isn't going to happen.

 

[neurosport]

I am sorry if i missed it Toro but did you address Stagflation yet ?

Your Keynesian ass thinks inflation can only come during a period of economic growth so how come history says otherwise ?

You can kiss my Keynesian ass. I was raised on monetarism. Pay attention.

I didn't say inflation comes only in a period of economic growth. I explained why in this deflationary environment hyperinflation isn't going to happen.

well i also think inflation may not happen.

that is not my concern with our economy.

my concern is that we do not have an economy.

 

[Terral]

Hi Toro:

I'm sure you would. Your hurdle of credulity is if it is a mind-blowing conspiracy and its on youtube. Feel free to make an argument without youtube videos, Terral.

El Toro is wrong about 9/11 and he is wrong about Hyperinflation and the collapsing U.S. Dollar. Those of you with wealth in dollars are about to be burned and those with dollars in U.S. Stocks (OMG!!!) are about to get the double wammy!!! Everyone should be aware of the . . .

[ame="http://www.youtube.com/watch?v=uE82gMk-lJ4&feature=channel"]Shocking Macro-Economic Numbers!![/ame]

That last one, BTW, did not tell you how an implosion in the derivatives market leads to hyperinflation, though I suppose I could see someone who doesn't understand the subject at hand might find it believable.

What a complete IDIOT!!!! The entire U.S. Economy is going down the tubes and El Toro is happy to continue with the condescending BULLSHIT. The ‘Depression’ is gaining steam and DUPES (pic) like Toro have U.S. Dollars in the artificially-inflated stock markets! Nations around the globe know the U.S. Dollars is collapsing, but Toro will be the LAST person on earth to have one clue! Even Bible Teachers like David Wilkerson know FOR A FACT that the U.S. and Global Economies are going to COLLAPSE.

[ame="http://www.youtube.com/watch?v=szx0vurf8ko&feature=related"]David Wilkerson: The Current Economic Situation[/ame]

An implosion of the derivatives market is not inflationary. It is deflationary for all the reasons I listed in the OP. A collapse of the derivatives market reduces the amount of credit in the economy.

Every thesis, claim and conclusion by this stupid OX is a hypothesis about what is NOT.

[ame="http://www.youtube.com/watch?v=uizqjFgpr08"]Derivatives And The Hockey Stick Collapse For Dummies[/ame]

Listen to the nice lady using her chart to explain the “Derivatives Beast” and speaking really slow about how the Derivatives Bubble grew into the current (OMG!!) MONSTER.

A few more articles why hyperinflation is not coming, though I'm not so sure about the second article.

Stop wasting our time with nonsense about what is NOT coming and try to describe what is clearly coming down the pike! El Toro cannot be considered a ‘victim’ of the coming U.S. Dollar and U.S. Economic Collapse, because he stood in front of the Train and talked about what is NOT coming like a complete stooge (Toro in the middle) . . .

GL,

Terral

 

[editec]

You can wipe out most of the liabilities by raising the retirement age to 72. There is no reason not to do this. When Social Security was changed in the 60s, the average expectancy was 65. The amount actually paid out wasn't that large. Today, the average life expectancy is 77. So we will change it to 72.

That's what I suspect the solution will be, too.

The reason why we will do this is because the other option is inflation, which will erode the value of Social Security anyways. Seniors live on fixed incomes. Inflation is bad for them. So they will have the option of inflation or changing social security.

Infaltion is especially hard on SS recipients because the government is and has been basically lying about inflation specifically to keep the cost of Social Security down, too.

 

[Toro]

What a complete IDIOT!!!! The entire U.S. Economy is going down the tubes and El Toro is happy to continue with the condescending BULLSHIT. The ‘Depression’ is gaining steam and DUPES (pic) like Toro have U.S. Dollars in the artificially-inflated stock markets! Nations around the globe know the U.S. Dollars is collapsing, but Toro will be the LAST person on earth to have one clue! Even Bible Teachers like David Wilkerson know FOR A FACT that the U.S. and Global Economies are going to COLLAPSE.

First, I am now heavily short the US stock market. Or make that the commercial real estate market, as well as heavily short the Canadian stock market. If the markets collapse, I'm going to make a fortune.

You have yet to make an actual argument and have instead resorted to youtube videos of Lyndon LaRouche and preachers. What other conclusion can one make other than you are unaware of the subject on which you are posting? Feel free to prove me wrong and make an argument.

 

[Terral]

Hi Toro:

First, I am now heavily short the US stock market. Or make that the commercial real estate market, as well as heavily short the Canadian stock market.

No. Make that 'short on brains' for having money in the markets in the first place.

If the markets collapse, I'm going to make a fortune.

Since the fundamentals of the markets have been broken for almost a year now, then the best plays in the current markets require lessons in psychology at best. The markets can go up or down or sideways right now just on account of because . . .

You have yet to make an actual argument and have instead resorted to youtube videos of Lyndon LaRouche and preachers.

You give yours and I will give mine and everybody can decide. 1Cor. 11:19. Here is the deal in a nutshell for my bullheaded adversary:

Nobody is doing one thing about all of the Outsourcing of JOBS and the importation of Foreign Nationals (eight reasons for collapse), which is causing rising unemployment, bankruptcy, foreclosures, loan defaults of all kinds, so on and so forth. Printing and spending and printing and spending is not doing one thing to stop up the holes in this broken economy and you are much to drunk on the Obama Kool-aid to raise your head out of the sand to even take a good look around. Tent Cities in the USA are exploding, whole neighborhoods stand empty, except the Illegal Aliens live 10 and 20 in one house; but El Toro cannot do the math . . .

Obama is driving the U.S. Economy over the cliff going 500 MPH and everyone cuckoo on the bus is just as happy eusa_whistle as anyone can be.

GL,

Terral