US: Severe Inflation Risk?

Discussion in 'Economy' started by eagleseven, Jan 17, 2010.

  1. eagleseven
    Offline

    eagleseven Quod Erat Demonstrandum

    Joined:
    Jul 8, 2009
    Messages:
    6,518
    Thanks Received:
    1,254
    Trophy Points:
    48
    Location:
    OH
    Ratings:
    +1,255
    It would appear that the NYT has now recognized the threat. Our collective future is in the hands of one man: Ben Bernanke.


    P.S. Also of note, the author, Harvard economist Dr. Mankiw, was Mitt Romney's chief economic advisor in the 2008 campaign.
     
    Last edited: Jan 18, 2010
  2. Mr.Fitnah
    Offline

    Mr.Fitnah Dreamcrusher

    Joined:
    Jul 14, 2009
    Messages:
    14,480
    Thanks Received:
    2,673
    Trophy Points:
    48
    Location:
    Paradise.
    Ratings:
    +2,673
    Is America's financial collapse inevitable?
    Pat Buchanan

    © 2010
    We were blindsided. We never saw it coming.

    So said Goldman Sachs CEO Lloyd Blankfein of the financial crisis of 2008. He likened its probability to four hurricanes hitting the East Coast in a single season.

    Blankfein was reminded by the chairman of the Financial Crisis Inquiry Committee, Phil Angelides, that hurricanes are "acts of God." Financial crises are manmade. Yet Blankfein was backed up by Jamie Dimon of JPMorgan, who said, "Somehow, we just missed ... that home prices don't go up forever."

    The Wall Street titans thus conceded they did not foresee the housing bubble ever bursting and they did not consider the possibility of a collapse in value of the sub-prime mortgage securities piled up on their books.

    Backing up Blankfein's plea of ignorance and incomprehension is this: The crisis killed Lehman Brothers and would have killed every one of them had not the Treasury and Fed, neither of which saw it coming, either, intervened with hundreds of billions in bailout cash.
     
  3. kyzr
    Offline

    kyzr Gold Member

    Joined:
    Oct 14, 2009
    Messages:
    3,446
    Thanks Received:
    449
    Trophy Points:
    130
    Ratings:
    +629
    Actually the fiscal time-bomb is the $31-trillion or so that the people paid into Social Security and Medicare for their retirement, and the government can't pay. I thought Obama was going to run an honest government? His methods are not any different than his predecessors. He thinks the people are "rubes".
     
  4. Chris
    Offline

    Chris Gold Member

    Joined:
    May 30, 2008
    Messages:
    23,154
    Thanks Received:
    1,958
    Trophy Points:
    205
    Location:
    Virginia
    Ratings:
    +2,089
    What a bunch of whinny pussies.

    We aren't going to collapse.

    All we need to do is raise the tax rate on the rich to what it was when Clinton was president and use some of the cost cutting measures that every other industrialized country uses to rein in healthcare costs.
     
  5. Avatar4321
    Offline

    Avatar4321 Diamond Member Gold Supporting Member

    Joined:
    Feb 22, 2004
    Messages:
    70,529
    Thanks Received:
    8,159
    Trophy Points:
    2,070
    Location:
    Minnesota
    Ratings:
    +12,148
    You mean death panels? I thought you guys were claiming we wouldnt do that. Not too surprised you're turning your back on that one so quickly.

    Oh, and it's pretty darn obvious we are looking to a collapse. Thankfully, we have a government in the states so that if the federal government does collapse, it's not total anarchy in the nation.
     
  6. eagleseven
    Offline

    eagleseven Quod Erat Demonstrandum

    Joined:
    Jul 8, 2009
    Messages:
    6,518
    Thanks Received:
    1,254
    Trophy Points:
    48
    Location:
    OH
    Ratings:
    +1,255
    Chris to Dr. Mankiw, "You are a whining pussy."
     
    Last edited: Jan 18, 2010
  7. PatekPhilippe
    Offline

    PatekPhilippe Senior Member

    Joined:
    Jul 30, 2009
    Messages:
    8,171
    Thanks Received:
    1,200
    Trophy Points:
    48
    Location:
    Sasebo Japan
    Ratings:
    +1,200
    There is NO QUSTION that there is a danger of rampant inflation...at the same time the Fed has too much money on the street right now. Look for Bernanke to RAISE interest rates this year to get excess money out of the system. As interest rates rise, the dollars value will increase and thus commodities prices will drop.

    When you see "Get into gold" ads it means the time to make money in commodities has already passed.
     
  8. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199

    Most of the states are sucking at the Federal Teat. Most state programs would be non functional if they did not have Federal money to spend.
     
  9. william the wie
    Offline

    william the wie Gold Member

    Joined:
    Nov 18, 2009
    Messages:
    7,262
    Thanks Received:
    672
    Trophy Points:
    175
    Ratings:
    +1,602
    Money destruction waves that are already on the books will make this prediction quite different from reality:

    Happening now is the UE and shrunken savings wave. People with what were sensible loans now living on UE bennies and savings have been losing their houses at increasing rates since last summer. When those foreclosures get written down the money supply shrinks since write offs are taken from bank capital accounts and earnings.

    The CRE wave. Most Commercial Real Estate is funded by 5-10 year balloon mortgages plus they are much more subject to strategic default than residential mortgages. This wave potentially involves 10s of trillions in writedowns as solvent companies walk away from properties and wait for tax sales to get them back in at extremely low prices.

    This September will see massive defaults in option ARM resets. These crappy loans are about midway in quality between subprime and Alt-A loans. The fear is that this wave may cascade into a wave of residential strategic defaults by solvent but upside down homeowners.

    The cumulative total of these waves could theoretically be as high as 50T. The likely real number is unknown to me but some deflation in terms of M3 and M6 have been reported in "The Economist" this month due to banks setting aside reserves for expected losses. Whatever that expected loss rate it has got to be huge because as the meltdown demonstrated bankers tend to underestimate risk and the Fed is pumping a lot of money into the system.
     
    • Thank You! Thank You! x 1
  10. ☭proletarian☭
    Online

    ☭proletarian☭ Guest

    Ratings:
    +0
    Are we a still following that retard, Keynes?


    Then yeah, we're still fucked.
     

Share This Page