Errol Posted July 19, 2009 Report Share Posted July 19, 2009 They are losing the battle, they are failing to bring back inflation.You cannot beat deflation in a credit based system. Possibly you are correct. However, you could have a hyperinflationary depression. Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 You can - you can print. They are and its not working. Quote Link to comment Share on other sites More sharing options...
CokeSnortingTory Posted July 19, 2009 Report Share Posted July 19, 2009 You can - you can print. AEP calls the ability of central banks to print as having "nuclear weapons". Your whole analysis depends upon them using these nuclear weapons. Fudge is saying they're chickensh*t. Most people aren't prepared to call it either way. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 Why would anyone bank on this? You'd have to be insane! ...borrowers would..as it reduces the value of debt..... Quote Link to comment Share on other sites More sharing options...
Guest Daddy Bear Posted July 19, 2009 Report Share Posted July 19, 2009 AEP calls the ability of central banks to print as having "nuclear weapons".Your whole analysis depends upon them using these nuclear weapons. Fudge is saying they're chickensh*t. Most people aren't prepared to call it either way. Do you think they have a choice? Do you think they will sit back and watch global deflation take hold? I'll bet my last dollar - cash will be the worst performing investment over the next 10 years Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 ...borrowers would..as it reduces the value of debt..... ...in contrast to cash deposit savers...as it reduces the value of their savings.... Quote Link to comment Share on other sites More sharing options...
CokeSnortingTory Posted July 19, 2009 Report Share Posted July 19, 2009 Do you think they have a choice?Do you think they will sit back and watch global deflation take hold? I'll bet my last dollar - cash will be the worst performing investment over the next 10 years Well there you go - it's a gamble. But it isn't scientific - this isn't an inevitable process. It depends on the courage/recklessness/fear/desperation of the governments and central bankers. It's an emotional event - when and how will they crack? Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 Well there you go - it's a gamble.But it isn't scientific - this isn't an inevitable process. It depends on the courage/recklessness/fear/desperation of the governments and central bankers. It's an emotional event - when and how will they crack? Its not a case of will they wont they. They are printing money and its not creating inflation. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 (edited) But it isn't scientific ...true ..Economics is an art form ....if we have deflation cash will be king....if we inflate cash will suffer in value... Edited July 19, 2009 by South Lorne Quote Link to comment Share on other sites More sharing options...
29929BlackTuesday Posted July 19, 2009 Report Share Posted July 19, 2009 I can't be arsed to argue.You believe we will get hyperinflation, I believe we will get deflation. You are wrong, I am right. +1 Quote Link to comment Share on other sites More sharing options...
ccc Posted July 19, 2009 Report Share Posted July 19, 2009 When it comes to inflation reducing the real value of debt, only one sort of inflation matters. That is wage inflation. Now NOBODY knows what the outcome of all this is going to be. However all the signs today point towards deflation in wages for the vast majority. Therefore, in very simple terms, IMO anyone banking on wage inflation is doing so with little to back it up. Quote Link to comment Share on other sites More sharing options...
CokeSnortingTory Posted July 19, 2009 Report Share Posted July 19, 2009 Its not a case of will they wont they.They are printing money and its not creating inflation. They're printing in a kind of cautious pseudo-scientific way to fill the holes in the bank's balance sheets. What AEP calls "nuclear weapons" is the Zimbabwean style monetary blitz where you just keep printing billion dollar notes until the liquidity overflows. They've not done this yet - but it's what DaddyBear's scenario requires. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 When it comes to inflation reducing the real value of debt, only one sort of inflation matters. That is wage inflation.Now NOBODY knows what the outcome of all this is going to be. However all the signs today point towards deflation in wages for the vast majority. Therefore, in very simple terms, IMO anyone banking on wage inflation is doing so with little to back it up. ....in the early to mid '70s we had price of goods inflation of 30%+ first, which created the demand for 30%+ wage demands....but as we have said this is not a science and the cause and effect momentum may be quite different this decade....who knows....?.... Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 They're printing in a kind of cautious pseudo-scientific way to fill the holes in the bank's balance sheets. What AEP calls "nuclear weapons" is the Zimbabwean style monetary blitz where you just keep printing billion dollar notes until the liquidity overflows.They've not done this yet - but it's what DaddyBear's scenario requires. OK lets look at this another way. Is owning a house in Zimbabwe an asset or a liability? Quote Link to comment Share on other sites More sharing options...
Injin Posted July 19, 2009 Report Share Posted July 19, 2009 OK lets look at this another way.Is owning a house in Zimbabwe an asset or a liability? Massive liability. Council tax bill for £12 billion, anyone? Quote Link to comment Share on other sites More sharing options...
ccc Posted July 19, 2009 Report Share Posted July 19, 2009 ....in the early to mid '70s we had price of goods inflation of 30%+ first, which created the demand for 30%+ wage demands....but as we have said this is not a science and the cause and effect momentum may be quite different this decade....who knows....?.... What caused the good inflation in the first place ? As you say the cause/effect connection is interesting. Who knows indeed. Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 (edited) Massive liability.Council tax bill for £12 billion, anyone? Then even in an hyperinflationary scenario buying a house in the UK or USA is not a good move. A plane yes, a house no. Edited July 19, 2009 by Fudge Quote Link to comment Share on other sites More sharing options...
CokeSnortingTory Posted July 19, 2009 Report Share Posted July 19, 2009 Then even in an hyperinflationary scenario buying a house in the UK or USA is not a good move.A plane yes, a house no. If your wages match inflation, the mortgage gets paid off quickly though. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 What caused the good inflation in the first place ? As you say the cause/effect connection is interesting. Who knows indeed. ...a lot to do with the oil price surge of the period ...and OPEC driving the prices ...not to say it can't happen again... Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 (edited) If your wages match inflation, the mortgage gets paid off quickly though. Wages are only going one way whatever happens. And thats down. We have to compete with the millions of Indians and Chinese who can live on 2 dollars a day. Edit why do I keep missing words out? When I am pissed. Edited July 19, 2009 by Fudge Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 19, 2009 Report Share Posted July 19, 2009 Wages are only going one way whatever happens.And thats down. We have to compete with the millions of Indians and Chinese who can live on 2 dollars a day. Edit why do I keep missing words out? When I am pissed. ....but the public sector workers will have their rises anyway.... Quote Link to comment Share on other sites More sharing options...
stormymonday_2011 Posted July 19, 2009 Report Share Posted July 19, 2009 Yet another GroundHog Day thread about inflationary apocalypse v deflationary apocalypse. If its Armageddon who gives a damn what form it takes since we will all be going to hell. Quote Link to comment Share on other sites More sharing options...
CokeSnortingTory Posted July 19, 2009 Report Share Posted July 19, 2009 Wages are only one way whatever happens.And thats down. We have to compete with the millions of Indians and Chinese who can live on 2 dollars a day. Real wages and real values will go down, regardless of the inflationary situation. The advantage of inflation for the bankers/governments is that it reduces the value of debt. This is the crux of the problem - the bankers/governments don't want the burden of compound debt deflation, and so have tried to ease this through the pseudo-scientific method of QE. This hasn't worked, as the debt hole keeps opening wider and wider. Therefore they either surrender to deflation, or take the risk of a more reckless monetary blitz by printing until inflation (and probably hyperinflation) appears. You think they will do the former. DaddyBear thinks they will do the latter. Most people are on the sideline either eating popcorn or hoarding gold. Quote Link to comment Share on other sites More sharing options...
Tim Miller Posted July 19, 2009 Report Share Posted July 19, 2009 Because we will not get the hyper inflationary scenario you are banking on. + 1 Quote Link to comment Share on other sites More sharing options...
Fudge Posted July 19, 2009 Report Share Posted July 19, 2009 ....but the public sector workers will have their rises anyway.... No their pay rises are linked to RPI they will be happy enough to to keep their jobs. Quote Link to comment Share on other sites More sharing options...
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