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SleepyHead

Deflation Great For Workers Bad For Banks

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What this guy fails to mention is our economy is structured around debt and relies on new debt being created to keep going.

The banks don't actually have peoples money in deposits, just promises to pay. So if most of the banks went bust, the government would have to bail out everyones savings.

So it would be a very painful transition and I imagine we'd be poorer in the short term not richer, but it has to happen- we need a structural change in the way debt is issued to stop our monetary system being debt based.

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Its all about control.

Inflation is easier to control than deflation. If inflation goes out of control it can be tamed by inroducing a new currency at a drop of a hat.

The bankers want to have control!

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What this guy fails to mention is our economy is structured around debt and relies on new debt being created to keep going.

The banks don't actually have peoples money in deposits, just promises to pay. So if most of the banks went bust, the government would have to bail out everyones savings.

So it would be a very painful transition and I imagine we'd be poorer in the short term not richer, but it has to happen- we need a structural change in the way debt is issued to stop our monetary system being debt based.

No, the economy is based on what we do, what we make and what we consume.

money is just the means of exchange.

the mistake is that the cure is applied to the means of exchange and not the economy. hence, stimulus is all about money supply, whereas, demand is generated by lower prices...hence the move of a large part of our economy to China and India....this is deflationery and money leaves our shores.

course, banks aren't set up for this...they are set up to earn a fee for making loans....and loans are Inflationery where they are not used for productive, wealth generating purposes..like buying and selling houses, changing cars before they are worn out and Gucci Handbags.

This is all Zombi activity, and REQUIRES inflation to work.

I say, we dont NEED all theses bankers. We need banking, but we dont need 1 in 20 people working in the sector. And we dont need them to be drawing so much into their personal coffers.

Edited by Bloo Loo

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No, the economy is based on what we do, what we make and what we consume.

money is just the means of exchange.

the mistake is that the cure is applied to the means of exchange and not the economy. hence, stimulus is all about money supply, whereas, demand is generated by lower prices...hence the move of a large part of our economy to China and India....this is deflationery and money leaves our shores.

course, banks aren't set up for this...they are set up to earn a fee for making loans....and loans are Inflationery where they are not used for productive, wealth generating purposes..like buying and selling houses, changing cars before they are worn out and Gucci Handbags.

This is all Zombi activity, and REQUIRES inflation to work.

I say, we dont NEED all theses bankers. We need banking, but we dont need 1 in 20 people working in the sector. And we dont need them to be drawing so much into their personal coffers.

Nice. The financial system has created itself in the form it needs to prosper, to hell with the rest of us. We need a massive cull it seems.

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No, the economy is based on what we do, what we make and what we consume.

money is just the means of exchange.

the mistake is that the cure is applied to the means of exchange and not the economy. hence, stimulus is all about money supply, whereas, demand is generated by lower prices...hence the move of a large part of our economy to China and India....this is deflationery and money leaves our shores.

course, banks aren't set up for this...they are set up to earn a fee for making loans....and loans are Inflationery where they are not used for productive, wealth generating purposes..like buying and selling houses, changing cars before they are worn out and Gucci Handbags.

This is all Zombi activity, and REQUIRES inflation to work.

I say, we dont NEED all theses bankers. We need banking, but we dont need 1 in 20 people working in the sector. And we dont need them to be drawing so much into their personal coffers.

+1

Basically we need a financial system with interchangeable components - i.e. one where you can remove one financial entity from it and the whole system doesn't collapse. Unfortunately the banks now realise (if they didn't before) that it's to their collective advantage to corrupt the banking system so that if any of them went bust then they'd have to be rescued.

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There won't ever be deflation , gold is still sky high touching 1250/ounce again last week.

It's just print print print from here on in , go long on gold & silver.

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You've gotta watch this guy.

Enjoy!

Thanks. Nice one.

I think he may reads HPC though as I have been talking for the last few weeks that for HyperInflation to happen, you need hypervelocity - something which

the government can't control :-p

But again, hypervelocity only happens when people lost confident, when instability hits or when the mass are seriously pi*** off.

Yes, the inflation must stop so that the banks can do some real things like allocating capital to real productive works (which was what banks were supposed to do)

and charge a fees rather than trying to skimmed money off 100%+ real estate and consumer loans.

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He is pretty much wrong... Yeah we had deflation before the 1900s, but it WASN'T good for workers, workers got very poor, it was only good for the rich who enjoyed the growth.

Hmm deflation is good for people with lots of cash, bad for people with any debt, or nothing/little. In a deflationary environment wages, food everything falls but the debt/cash is still there. Before the 1900s, we had hundreds of years of deflation, it was very bad for workers, but great for the rich who could use some of the cash to live on and still have relatively more next year. In deflation normal worker gets paid less each year, and as a result there is no way for them to buy any assets as saving becomes almost impossible. Deflation/Inflation is a choice, you can have growth in either but with underlying inflation you can borrow money and get rich or loose money easily. With deflation your stuck, your either rich and getting richer or poor and getting poorer. Just look at history, debtors prisons, the idle rich, and a huge poor underclass...

Edited by AteMoose

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Deflation??????????????????

None of the main assets (stocks, property, consumables, metals, etc) went down in price over the last 2 years. On the contrary, some of them went up very sharply. Hello?! Where do you see deflation?

And please don't come up with silly graphs that don't mean anything in the real world.

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Deflation??????????????????

None of the main assets (stocks, property, consumables, metals, etc) went down in price over the last 2 years. On the contrary, some of them went up very sharply. Hello?! Where do you see deflation?

And please don't come up with silly graphs that don't mean anything in the real world.

Yeah, the official inflationindices (CPI and RPI) are high and I believe money supply also grew slightly. Precious metals have been rocketing up too. For sure I see prices rising everywhere in the real world.

All this in a time when we are being told that we are undergoing a period of massive deflationary pressure and that excuse is being used to keep the money printing and 'stimulus' plans going. Not at all difficult to see what direction we are really going in.

There is no way that the debt (state, corporate and private) in Western countries can be repaid as things stand. It's either outright (non repayment) default or effective (inflationary) default. Inflationary default is easier to stomach for the governments and banking system - therefore that is what we shall have.

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What this guy fails to mention is our economy is structured around debt and relies on new debt being created to keep going.

The banks don't actually have peoples money in deposits, just promises to pay. So if most of the banks went bust, the government would have to bail out everyones savings.

So it would be a very painful transition and I imagine we'd be poorer in the short term not richer, but it has to happen- we need a structural change in the way debt is issued to stop our monetary system being debt based.

Indeed the system, by its very nature unsustainable, is broken.

Sooner or late politicians need to realise this and take care of it in some sort of controlled fashion, or else it will happen totally uncontrolled. Think Russia 1991, the nations economic infrastructure being carved up by cowboy capitalists...

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There won't ever be deflation , gold is still sky high touching 1250/ounce again last week.

It's just print print print from here on in , go long on gold & silver.

Or it could be a double top.

Edited by Killer Bunny

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He is pretty much wrong... Yeah we had deflation before the 1900s, but it WASN'T good for workers, workers got very poor, it was only good for the rich who enjoyed the growth.

Hmm deflation is good for people with lots of cash, bad for people with any debt, or nothing/little.  In a deflationary environment wages, food everything falls but the debt/cash is still there.  Before the 1900s, we had hundreds of years of deflation, it was very bad for workers, but great for the rich who could use some of the cash to live on and still have relatively more next year.  In deflation normal worker gets paid less each year, and as a result there is no way for them to buy any assets as saving becomes almost impossible.  Deflation/Inflation is a choice, you can have growth in either but with underlying inflation you can borrow money and get rich or loose money easily.  With deflation your stuck, your either rich and getting richer or poor and getting poorer. Just look at history, debtors prisons, the idle rich, and a huge poor underclass...

What the hell are you talking about?

The poor get poorer when they lose their jobs. Unemployment increases in recessions regardless of whether they are inflationary or deflationary just as it falls during periods of economic growth.

Do you really believe the rich hold their wealth in cash? What planet are you on? Deflation reduces the value (in price terms) of assets. This is not good for the rich. Those in work experience greater purchasing power and are taxed relatively less during periods of deflation. If you actually look properly at history you will observe that it is during times of high inflation in asset prices in relation to wages that the rich get idle and the poor get fleeced. Think about it for a second. If the value of your wages is falling due to inflation, the value of someone else's assets is rising due to it.

Conventional macroeconomic wisdom/dogma dictates that a bit of inflation is good and deflation is bad. In reality deflation is worst for those who benefit most from the status quo.

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No, the economy is based on what we do, what we make and what we consume.

money is just the means of exchange.

the mistake is that the cure is applied to the means of exchange and not the economy. hence, stimulus is all about money supply, whereas, demand is generated by lower prices...hence the move of a large part of our economy to China and India....this is deflationery and money leaves our shores.

course, banks aren't set up for this...they are set up to earn a fee for making loans....and loans are Inflationery where they are not used for productive, wealth generating purposes..like buying and selling houses, changing cars before they are worn out and Gucci Handbags.

This is all Zombi activity, and REQUIRES inflation to work.

I say, we dont NEED all theses bankers. We need banking, but we dont need 1 in 20 people working in the sector. And we dont need them to be drawing so much into their personal coffers.

Spot on!

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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