Sunday, December 7, 2008

Where Now?

Deflation virus is moving the policy test beyond the 1930s extremes

We are beyond the extremes of the 1930s. The frontiers of monetary policy are being pushed to limits that may now test viability of paper currencies and modern central banking.

Posted by renting2 @ 11:57 AM (3504 views)
Please complete the required fields.



12 thoughts on “Where Now?

  • As Bernanke said in his 2002 speech: “the best way to get out of trouble is not to get into it in the first place”. Too late now.

    Reply
    Please complete the required fields.



  • OK, I think the time has come to invest in a little gold. Knowing nothing about all of this. Can someone enlighten me as to the best sources. I dont have much but enough for a few sovereigns, krugs etc.

    Reply
    Please complete the required fields.



  • All the goods we (most of us) continually bought over the last 10 years were constantly reducing in price.

    We have established that cheaper housing would be a good thing.

    Is a deflationary period really such a bad thing.

    Won’t the poor effectively become richer (as we all have since the 70’s).

    I seriously question the sanity of this continuous bailout which lets not forget is a re-run of what the USA did aftyer 911.

    Simply, a larger mess was created than was there in the first place.

    Are we about to do the same.

    It’s been previously mentioned that there are more savers than borrowers – when will they have a voice ?

    Reply
    Please complete the required fields.



  • Savers will have a voice when they take ALL their money out of the banks as cash only. The desparate panic that will ensue will ensure interest rates return to sensible levels.

    Reply
    Please complete the required fields.



  • headmelter

    Thanks for the link.

    Reply
    Please complete the required fields.



  • STR2007, 1929 – 1932 in the us was a deflationary spiral that saw 25% unemployed, it was pretty bad I hear. Matters only began to rectify themselves when FDR devalued the dollar in 1933.

    Reply
    Please complete the required fields.



  • i purchased some a few weeks back via Bullionvault, very friendly and professional!

    Reply
    Please complete the required fields.



  • bellwether

    But was the depression caused by deflation or was deflation an effect of the depression.

    Things getting cheaper can’t in themself be such a bad thing

    Reply
    Please complete the required fields.



  • 5. bellwether said…

    STR2007, 1929 – 1932 in the us was a deflationary spiral that saw 25% unemployed, it was pretty bad I hear. Matters only began to rectify themselves when FDR devalued the dollar in 1933.

    The difference is the dollar was backed by gold then. Effectively by reducing rate soon to zero, GB has de facto devalued £.it still wont solve the problems. FDR did not save the US, the war did unfortunately.No tampering with market forces will ever sold our economic problems.

    Reply
    Please complete the required fields.



  • FJC I don’t see the relevance of gold here. What do you mean when you say the dollar was backed by gold. I mean as soon as you redenominate your currency then your off the gold standard (ie notion that money always = to a fixed amount of precious metal) anyway and playing with fiat money.

    To day that it was WW2 ended the great depression is a convenient argument but a wrong one.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>