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We're Absolutely Doomed To Ruin


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Guest Daddy Bear
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 :P

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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 :P

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?

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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.

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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.

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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.

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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....?.... <_<

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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?

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....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.

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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 by Fudge
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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 by Fudge
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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.... <_<

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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.

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Because we will not get the hyper inflationary scenario you are banking on.

+ 1

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