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General Congreve

The Future Will Not Be Deflationary

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In response to a thread posted earlier by RB about how the future is deflationary. Think it deserves it's own thread. Please discuss...

RB, you are confusing the gilt market with a free market. The BoE talking about more QE (which means it will happen), so you can forget the notion of bond vigilantes forcing up interest rates. For every gilts sold by a 'vigilante' QE will be magicked from thin air by the BoE and they will buy that gilt, thereby creating the necessary demand to keep interest rates low.

They will cry it is not inflationary, because at some unspecified time in the future the will sell the bonds back into the market at the same price and the newly created money will be cancelled out, so it is a zero sum game. But if there isn't demand for the debt now, what do you think the likelihood will be in the future, when even more debt has been created to plug the gaps in the UK's finances?

Ergo, they will never be able to sell these bonds back into the market at the value they bought them for. So the money they have created to buy them will stay in the system. So they might as well be printing up directly to fund the deficit and cut out the bullsh1t.

ZIRP is inflationary and QE is a tool of maintaining ZIRP which is inflationary as of itself.

They will use these tools to continue to support asset prices and fund government expenditure. Can you really see our government saying, "Sorry, we're slashing pensions, closing hospitals and old people's homes, cutting teachers etc. and by the way, you've got no savings left cos we let the banks collapse". They'd be riots.

Christ, they can't even get the public sector to retire a couple of years later and pay the equivalent contributions as private sector workers towards retirement. If the public won't swallow the cuts, then they'll just have them forced on them via inflation. Same difference.

The future is inflationary.

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Followed by a huge dose of deflation. It's a ying yang thing. You can't beat the system at some point the correction will occur.

You can add as many zeros to the money supply with you computer as you wish, it only takes a few key strokes.

Please explain why deflation has to happen?

Personally I don't have a VI in inflation or deflation, as I'm hedged both ways by precious metals, so I'm not trying to talk my book. I just can't see them letting deflation happen, as inflation is the 'easier' route for TPTB.

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Followed by a huge dose of deflation. It's a ying yang thing. You can't beat the system at some point the correction will occur.

Yus. The economy has always been cyclical with inflationary periods followed by a collapse and a few years of deflation.

E.g. of the cycle:

http://www.tradingeconomics.com/united-states/inflation-cpi

United States Inflation Rate
The inflation rate in United States was last reported at 3.6 percent in May of 2011. From 1914 until 2010, the average inflation rate in United States was 3.38 percent reaching an historical
high of 23.70
percent in June of 1920 and a record low of
-15.80
percent in June of 1921. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: United States Inflation Rate chart, historical data and news.

The size of the bubble that has to be deflated this time around suggest a powerful dose of escaping air (deflation).

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I agree with General here, simply they are just printing more and more money. Countries with debt problems resolving such problems with MORE debt.

Which is insane....

Sure we will have deflation some day... But it will be Zimbabwe/Russia like. We'll unintentionally tip into hyper have a number of years of hyperinflationary collaspe. Then after everything is destroyed and everything is stamped property of BoE or HSBC deflation will be allowed to occur. Then we get uber rentier monopolies of everything. Rent is paid out to HSBC, electric, water, gas, HSBC or BoE.

So RB will be right.... but on the wrong time scale. And I'm starting to think he is being malivious now telling people to hold cash while completely ignoring inflation of any kind. Stuff going up in PRICE is INFLATIONARY.

AS I said before if you believe so strongly play gold price options with me, offer me todays spot price in 2013. But you won't because you know you're wrong.

Edited by ken_ichikawa

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Yus. The economy has always been cyclical with inflationary periods followed by a collapse and a few years of deflation.

E.g. of the cycle:

http://www.tradingeconomics.com/united-states/inflation-cpi

United States Inflation Rate
The inflation rate in United States was last reported at 3.6 percent in May of 2011. From 1914 until 2010, the average inflation rate in United States was 3.38 percent reaching an historical
high of 23.70
percent in June of 1920 and a record low of
-15.80
percent in June of 1921. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: United States Inflation Rate chart, historical data and news.

The size of the bubble that has to be deflated this time around suggest a powerful dose of escaping air (deflation).

What was the cost of a loaf of bread over that same time period?

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Yus. The economy has always been cyclical with inflationary periods followed by a collapse and a few years of deflation.

E.g. of the cycle:

http://www.tradingeconomics.com/united-states/inflation-cpi

United States Inflation Rate
The inflation rate in United States was last reported at 3.6 percent in May of 2011. From 1914 until 2010, the average inflation rate in United States was 3.38 percent reaching an historical
high of 23.70
percent in June of 1920 and a record low of
-15.80
percent in June of 1921. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. This page includes: United States Inflation Rate chart, historical data and news.

The size of the bubble that has to be deflated this time around suggest a powerful dose of escaping air (deflation).

We're dealing with something a little different here. A banking elite who hold the reigns of power and will make damn sure they get paid and politicians who do not want to see a deflationary collapse and debt default on their watch.

In a nutshell, the banks, via central banks and complicit governments, are enforcing repayment of debts owed to them through inflation. So the bankers end up getting paid (rather than going bust) and society is forcibly made to pay the outstanding debts to the banks by having their wealth stolen via inflation.

In tandem with this, the politicians would rather print and pay for running the country, thereby punting the problem into the future, than face the deflationary music.

With big money and big politics both with a vested interest in inflation, I cannot see how deflation will be allowed to happen, short of violent revolution. And even if we do get that in Greece, it will not be enough to set off deflation in the UK, as we can print our way out of it. Revolution would have to take place here too for deflation to hit our shores.

And my, don't we need it. Just to get back to 2008 we need to take 40% off the price of bread, petrol and car insurance for starters. Let's hope that deflation comes soon and hits hard. :lol:

Edited by General Congreve

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Listen to me, the diddy mortgage holders and public sector workers can riot all they want.

You took on a 10x mortgage and plenty of MEW money, so pay it back or go bankrupt. Never mind all the crazy ideas that those who saved and lived within their means should be responsible for the muppets and their financial cluelessness. :unsure:

The UK's looking more and more like amature night at every turn, with Merv trying to justify why rates are still at 0.5%.

Tragic!!

"F*ck every overstretched mortgage holder and a$$wipes who took on too much debt. These useless b$st$rds need to pay for their fecklessness."

Is that clear enough for you, Merv??

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Yus. The economy has always been cyclical with inflationary periods followed by a collapse and a few years of deflation.

E.g. of the cycle:

First - price indexes are all fiddles.

Second - price indexes changes are a symptom of inflation and deflation.

Third - dozens of people have been through this with you and you always default back to a price index/deflation message even after admitting money supply increases. You do something similar with japan and the carry trade. Intellectually dishonest at best, shilling at worst to do that kind of thing.

Fourth - deflations only ever happen after a fiat currency is completely destroyed in a hyperinflation. Never before.

Fifth - credit, she isn't money.

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reaching an historical high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921.

RBs highlighting not mine, I would like to point out that the USD was backed by gold at this point so any deflation is in the context of sound money, the reason for the collapse was the banks had lent out more paper money backed by gold than they had gold. Whilst there was a Federal reserve at this point it did not interfere (first open market operations were not until 1923) which is why the recovery was so swift.

The deflation refered to was against gold, the deflation now is against gold not paper.

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Where is there more money to be made for the Banksters? Inflation or deflation?

They've already got all the money they could ever need - what they want is other assets to swap it for.

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Listen to me, the diddy mortgage holders and public sector workers can riot all they want.

You took on a 10x mortgage and plenty of MEW money, so pay it back or go bankrupt. Never mind all the crazy ideas that those who saved and lived within their means should be responsible for the muppets and their financial cluelessness. :unsure:

The UK's looking more and more like amature night at every turn, with Merv trying to justify why rates are still at 0.5%.

Tragic!!

"F*ck every overstretched mortgage holder and a$$wipes who took on too much debt. These useless b$st$rds need to pay for their fecklessness."

Is that clear enough for you, Merv??

Diddy mortgage holders and public sector workers are not Merv's priority. The bankers are.

From the point of banking insolvency you have two culprits, the lenders and the borrowers. The lenders should have known better, they know the public are financially illiterate and that people also need to get on with their lives and have wives that will hen peck them into a buying a nest whatever the sensible thing to do is. So the bulk of the blame lays with the banks, and a smaller proportion with the sh1t thick borrowers.

So, if they let deflation take place this will primarily affect the guilty lenders, as their banks will go bust and they lose everything. Borrowers may also find themselves losing their houses as the bad debt is bought by other parties who then kick out indebted homeowners, although depending on what they paid for the debt, they may just re-negotiate the mortgage to a lower rate, as they will still get paid and it saves messing about. Result, bankers get screwed, indebted public take a haircut and house prices back to normal levels. Only fly in the ointment is that innocent savers and anyone who has just got paid that month. e.g. everyone, loses all their money in the bank collapse.

So, if the government uses inflation this will primarily affect the borrowers. As the banks get paid back through interest rate arbitage and bailouts, all of which are inflationary. The borrower, while getting a temporary reprieve via low interest rates only ends up finding his income squeezed by inflation instead, eventually leading to default and lower house prices (see biflation). But this small crumb of schadenfreude to every sensible person out there is small comfort, as we see our incomes and savings evaporate as well.

So, inflation or deflation, the sensible and responsible amongst us get shafted and lose. Of the two choices, inflation or deflation the banks will choose the former. Seeing as they have the power and influence that is what we will get.

However, while it is plain to see how criminal it is, I am actually the banks biggest fan. If they hadn't created this mess and weren't taking the economically suicidal (for the population) decisions to get themselves out of it, life would be business as usual and I would be looking forward to a life of 9-5. Instead, the banks have been saved, allowing people like me (who had already ridden to their house price bubble to its peak), to withdraw that money rather than see it evaporate. Then inflationary policies have been pursued that ensure currency collapse and the flow of wealth into gold, which I bought with my money the BoE saved.

So thank I thank those f4cking d1ckheads for giving me the opportunity to expand my balance sheet for free as well. Cheers, you f4cking morons. :D

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They've already got all the money they could ever need - what they want is other assets to swap it for.

Because they know the money (created by them) is worth shit so they want to exchange in for something real.

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Because they know the money (created by them) is worth shit so they want to exchange in for something real.

Bingo!

Bankers are like bakers - they don't make bread to keep, they make bread to swap for something else.

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First - price indexes are all fiddles.

Second - price indexes changes are a symptom of inflation and deflation.

Third - dozens of people have been through this with you and you always default back to a price index/deflation message even after admitting money supply increases. You do something similar with japan and the carry trade. Intellectually dishonest at best, shilling at worst to do that kind of thing.

Fourth - deflations only ever happen after a fiat currency is completely destroyed in a hyperinflation. Never before.

Fifth - credit, she isn't money.

Well said. It is oft forgotten that inflation is not rising prices in the shops. That is just a symptom of inflation, which actually refers to the expansion of the money supply. Supply and demand, basic economics.

And the rest of it!

Edited by General Congreve

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First - price indexes are all fiddles.

Second - price indexes changes are a symptom of inflation and deflation.

Third - dozens of people have been through this with you and you always default back to a price index/deflation message even after admitting money supply increases. You do something similar with japan and the carry trade. Intellectually dishonest at best, shilling at worst to do that kind of thing.

Fourth - deflations only ever happen after a fiat currency is completely destroyed in a hyperinflation. Never before.

Fifth - credit, she isn't money.

This is what I see playing out right now. If they carry on with these tragic policies inflation will ultimately go hyper until it cannot continue any further, then it all blows up into a deflationary depression.

Edited by MrFlibble

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RBs highlighting not mine, I would like to point out that the USD was backed by gold at this point so any deflation is in the context of sound money, the reason for the collapse was the banks had lent out more paper money backed by gold than they had gold. Whilst there was a Federal reserve at this point it did not interfere (first open market operations were not until 1923) which is why the recovery was so swift.

The deflation refered to was against gold, the deflation now is against gold not paper.

Thank you. The price of most things is going down in gold as we speak. Just look, I can buy £13 more pounds worth of stuff with every ounce of gold I have than I could at 7.30am. Tally Ho!!!

GBP_Line_1day_300x150.gif

post-20010-0-17029600-1308756620_thumb.gif

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So if money is worth feck all, why can't I print my own and buy a Range Rover Sport with it?

Why must the banks have access to paper and ink, yet the public can't and have to borrow this "special" paper and ink from the banks, paying back more paper and ink than they borrowed??

It's a feckup system and no mistake, lol. :blink:

Edited by Wait & See

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Thank you. The price of most things is going down in gold as we speak. Just look, I can buy £13 more pounds worth of stuff with every ounce of gold I have than I could at 7.30am. Tally Ho!!!

I found this recently. Holiday to the US in 2009 cost £2k, same holiday in 2011 cost £3k, priced in Gold however it is half an ounce cheaper in 2011.

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So if money is worth feck all, why can't I print my own and buy a Range Rover Sport with it?

Why must the banks have access to paper and ink, yet the public can't and have to borrow this "special" paper and ink from the banks, paying back more paper and ink than they borrowed??

It's a feckup system and no mistake, lol. :blink:

It's a fiat system (by decree), they set the terms. This is the beauty of gold and silver. It is the money of the free man, it's value cannot be robbed by the greed of others through the printing press. That is why governments were falling over themselves to go off the gold standard in the 20th century, they want total power over you, both politically and monetarily.

To be fair a great deal of value has been robbed from gold and silver, through the price suppression scheme of paper gold/silver. Basically printing and trading bits of paper to dilute the price, which they get away with because so few traders take physical delivery. They've gotten away with it for a long time. But soon enough that little ponzi will blow too, just like the housing ponzi, they all do. Then we'll find out the real value of gold/silver.

Edited by General Congreve

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I found this recently. Holiday to the US in 2009 cost £2k, same holiday in 2011 cost £3k, priced in Gold however it is half an ounce cheaper in 2011.

RB says you're a f4cking liar! :lol:

Edited by General Congreve

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Bingo!

Bankers are like bakers - they don't make bread to keep, they make bread to swap for something else.

Their 'dough' becomes worth less the longer they hold onto it too.

AS I said before if you believe so strongly play gold price options with me, offer me todays spot price in 2013. But you won't because you know you're wrong.

Don't want to be greedy so put me down for 1 ounce at £960 - and remember to keep some change for the £1000 note I'll be paying with. :lol:

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You edited this post, now you're just being cheeky ;)

RB, the deflationist, has just bought a house, go figure :blink:

First post wasn't as funny, needed an edit ;)

RB's house purchase made perfect sense to me, seeing as I already knew he was economically illiterate. :lol:

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  • 277 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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