Monday, Nov 20, 2006

inflation vs deflation “is THE question

dollarcollapse.com: THE Question

By now, pretty much the whole sound-money community agrees that humanity in general and the U.S. in particular are headed for seriously hard times. But exactly how we get from today’s illusion of prosperity to tomorrow’s financial Armageddon is a tougher call. Will the global economy collapse under a mountain of debt as in the 1930s, or will central banks run the printing presses until hyperinflation vaporizes most fiat currencies? As Sprott Asset Management’s John Embry recently put it, inflation vs deflation “is THE question, really.”

Posted by sold 2 rent 1 @ 07:33 PM (411 views)
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18 Comments

1. sold 2 rent 1 said...

We can debate HPC until the cows come home.

Inflation v deflation is the real question that needs to be answered.

Increasing the liquidity of your assets is the best strategy until we know which way it will go.

Monday, November 20, 2006 07:59PM Report Comment
 

2. nearly30 said...

It is a fair point - good change of tack and PMA is needed on this forum (well NMA really).

As for cheering ourselves up a bit - any articles about signs of HPC outside of London/SouthEast in the UK?

Must be some data/news- it's getting tough up here - people are just not able to pay for anything anymore - really tight.

Even Reuters makes the a small ascertion to it:

"prices in London leaping 18.2 percent on a year ago while asking prices in the North rose by just 3.1 percent"

Monday, November 20, 2006 09:17PM Report Comment
 

3. harold said...

For me this is the crunch paragraph:

"I am not so sure that the Fed cannot afford to turn us into a deflationary collapse if it is faced with the prospects of the U.S. dollar becoming increasingly worthless vis-ŕ-vis other currencies and the U.S. losing the benefits of owning the world’s reserve currency. If the dollar tanks, I do not see why we cannot expect a repeat of 1980, when Volcker saved the dollar by stomping on the monetary breaks and causing real interest rates to rise to their highest levels since the Civil War. Had Volcker not done that in 1980, the U.S. would have been toast back then. The same people, or at least the same ruling-elite families who were in charge then, are in charge now. I do not see why they would relinquish their power as “landlords of the world” now by allowing the dollar to head toward zero vis-ŕ-vis other currencies and gold."

Ultimately, therefore, the US will have to go through an extremely painful deflationary period. In this senario I'm not sure about gold in the long-run.

Monday, November 20, 2006 09:53PM Report Comment
 

4. harold said...

P.S. DollarCollapse is a constant source of delight for a bear like myself - but beware of the gold-bug bias.

Monday, November 20, 2006 09:56PM Report Comment
 

5. glorious sunshine said...

Well hello sold 2 rent, nearly30 and harold,

It all looks doom and gloom reading your comments... Thank the lord I am a positive person! Here is one for all those who appreciated the california girls! Surf is always up!

I, I love the colorful clothes she wears
And the way the sunlight plays upon her hair
I hear the sound of a gentle word
On the wind that lifts her perfume through the air

I'm pickin' up good vibrations
She's giving me excitations
I'm pickin' up good vibrations
(Oom bop bop good vibrations)
She's giving me excitations
(Oom bop bop excitations)
Good good good good vibrations
(Oom bop bop)
She's giving me excitations
(Oom bop bop excitations)
Good good good good vibrations
(Oom bop bop)
She's giving me excitations
(Oom bop bop excitations)

Close my eyes
She's somehow closer now
Softly smile, I know she must be kind
When I look in her eyes
She goes with me to a blossom world

I'm pickin' up good vibrations
She's giving me excitations
I'm pickin' up good vibrations
(Oom bop bop good vibrations)
She's giving me excitations
(Oom bop bop excitations)
Good good good good vibrations
(Oom bop bop)
She's giving me excitations
(Oom bop bop excitations)
Good good good good vibrations
(Oom bop bop)
She's giving me excitations
(Oom bop bop excitations)

(Ahhhhhhh)
(Ah my my what elation)
I don't know where but she sends me there
(Ah my my what a sensation)
(Ah my my what elations)
(Ah my my what)

Gotta keep those lovin' good vibrations
A happenin' with her
Gotta keep those lovin' good vibrations
A happenin' with her
Gotta keep those lovin' good vibrations
A happenin'

Ahhhhhhhh
Good good good good vibrations
(Oom bop bop)
(I'm pickin' up good vibrations)
She's giving me excitations
(Oom bop bop)
(Excitations)
Good good good good vibrations
(Oom bop bop)
She's na na...

Na na na na na
Na na na
Na na na na na
Na na na
Do do do do do
Do do do
Do do do do do
Do do do

No crash just the rich getting richer!

Monday, November 20, 2006 11:40PM Report Comment
 

6. paul said...

California is actually one of the worst hit places in the current US housing downturn. Propertywanks/Speculators will not be thinking of sunshine, but just trying to keep roofs over their heads. So your trolly little ditty will ring hollow in the Golden State where repossessions/foreclosures are now commonplace.

Oh the sweet, sweet irony.

Tuesday, November 21, 2006 12:15AM Report Comment
 

7. sold 2 rent 1 said...

glorious,

It would be nice to hear some reasoned arguments for once.


Tuesday, November 21, 2006 12:18AM Report Comment
 

8. kpjcomp said...

Glorious Sunshine if your a bull, then those sort of posts are just embarrassing, and your letting your side down real bad.

Sometimes I worry about been a bear, but if the best a bull can do is quote lyrics from the Beach Boys, then those doubts have just vanished.

Tuesday, November 21, 2006 12:26AM Report Comment
 

9. japanese uncle said...

Many thanks glorious sunshine:

I was looking for the lyrics of this masterpiece.

Tuesday, November 21, 2006 12:36AM Report Comment
 

10. Pintail said...

glorious sunshine

4 foot offshore, do you know what I mean, no did'nt think so, idiot

Tuesday, November 21, 2006 01:39AM Report Comment
 

11. denzil said...

>>glorious sunshine said:
-----------------------------------------------------------------
Well hello sold 2 rent, nearly30 and harold,

It all looks doom and gloom reading your comments... Thank the lord I am a positive person! Here is one for all those who appreciated the california girls! Surf is always up!
-----------------------------------------------------------------followed by more dross.

Yet another of the many recent attempt to stifle any debate on this blog. The volume of crap posted on here in the last two has jumped markedly.

Is it just me or does everyone have to use a login and password to post articles and comments? It kind of defeats the point really if anyone can just post anything.

Tuesday, November 21, 2006 08:30AM Report Comment
 

12. george monsoon said...

Denzil, this blog has actually become more interesting recently. I have seen a human side to people on here that has been hidden from view. There are enough valid comments in this particular blog, regarding the FED and monitary descision making to keep your grey matter ticking, and a nice counter of light hearted banter to fluff it up.

Ok, in keeping with the blog, I think Japan may prove to be a key factor in any global meltdown.

Tuesday, November 21, 2006 08:43AM Report Comment
 

13. sold 2 rent 1 said...

Lets keep the discussion going on inflation v deflation.

If there is a way to avoid a HPC then it will be through inflating away all that debt.

I say again. This is the real issue.

Tuesday, November 21, 2006 08:57AM Report Comment
 

14. monty said...

Inflation vs deflation is a serious question but I've seen very little on the subject when it comes to the UK economy and the effects on sterling. The US has far more to lose by the world dropping the dollar as the trade standard - google for "dollar hegemony" for more on that. I've heard commentary to the effect that "no central banker will ever let deflation take hold ever again" but then that doesn't explain what happened in Japan and how they were unable to bail themselves out. Would Bernanke's helicopter money work at all?

Tuesday, November 21, 2006 09:08AM Report Comment
 

15. holding out said...

If this article is close to the mark then HPC will be a side show and therefore I wouldn't think it will figure too highly in the calculations as to what 'they' do.

Japan zeroed it's rates and printed money and that didn't stop it's deflationary period.
Ben has already said he's going print money so that has covered a flank and so presumably he'll try to supress inflation whilst people believe that his stance is to avoid deflation.
You've got to hedge your bets with your money by having a portfolio. I've got cash,shares,gold and NZD. It takes a while to set up new accounts these days with all the proof of identity required. You may need to move quickly when one option looks like it's going tits up.

Tuesday, November 21, 2006 10:16AM Report Comment
 

16. geed said...

I have Sterling in ISA's, Shares in Europe and thr UK and Aussie $'s, I'm still developing my knowledge on the shiny stuff.

Tuesday, November 21, 2006 10:43AM Report Comment
 

17. sovietuk said...

Who is this glorious sunshine? I'm just sitting here cringing.

Tuesday, November 21, 2006 11:09AM Report Comment
 

18. inbreda said...

Indeed - anywhere but the dollar would seem the safest haven.

I started a oanda.com currency trading account a while ago. Shortly (like - two days) after making my first transaction (selling USD for THai Baht), there was a military coup. I came on the board and admitted by bad luck (for how was I supposed to guess a military coup was going to happen). As it turns out - the currency was barely affected and has already proved profitable. So glorious, you're not the only ray of sunshine round here!!

And to keep to topic - I recommend oanda for a bit of currency hedging.

Tuesday, November 21, 2006 03:01PM Report Comment
 

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