Deflation is winning

[kewp]

Then, the actual Tsunami hits (inflation) as people are standing there on what used to be dry ground.

I’ve heard this analogy a couple times and I’m not sure what mechanism could cause an ‘Inflation Tsunami’.

From my perspective the inflation ‘Credit Tsunami’ already happened and what we are perceiving as deflation is really just a reversion to mean.

From my POV, only two things could cause massive inflation. One, Helicopter Ben starts giving out economic stimulus checks right from the printing press. Two, a global run on the dollar that causes people holding our hard currency to exchange it for something else.

[Fearful]

Regarding the original post, I would not draw such strong conclusions from the exchange rates. As I understand it, we are seeing both a flight to quality – buying the safest investments around – and, in other countries, unwinding “carry trades”. Neither of these is deflation.

It seems that deflation is likely, as the shrinking of the debt and asset bubble sucks cash from the economy, and slows it down further as it sucks out cash. But I saw it noted that Japan only got into deflation four years into its crash. Maybe things move faster nowadays.

I cannot understand why Ben is keeping the FFR anywhere above 0%. Maybe he is so preoccupied with the financial system he is not noticing the rapid slowdown in the economy.

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Disclaimer: I have a vested interest in a weaker dollar, as I diversified from U.S.$ about four months ago, and have lost heavily since then. Well, it seemed like a good idea at the time.

[Fearful]

Regarding the original post, I would not draw such strong conclusions from the exchange rates. As I understand it, we are seeing both a flight to quality – buying the safest investments around – and, in other countries, unwinding “carry trades”. Neither of these is deflation.

It seems that deflation is likely, as the shrinking of the debt and asset bubble sucks cash from the economy, and slows it down further as it sucks out cash. But I saw it noted that Japan only got into deflation four years into its crash. Maybe things move faster nowadays.

I cannot understand why Ben is keeping the FFR anywhere above 0%. Maybe he is so preoccupied with the financial system he is not noticing the rapid slowdown in the economy.

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Disclaimer: I have a vested interest in a weaker dollar, as I diversified from U.S.$ about four months ago, and have lost heavily since then. Well, it seemed like a good idea at the time.

[Fearful]

Regarding the original post, I would not draw such strong conclusions from the exchange rates. As I understand it, we are seeing both a flight to quality – buying the safest investments around – and, in other countries, unwinding “carry trades”. Neither of these is deflation.

It seems that deflation is likely, as the shrinking of the debt and asset bubble sucks cash from the economy, and slows it down further as it sucks out cash. But I saw it noted that Japan only got into deflation four years into its crash. Maybe things move faster nowadays.

I cannot understand why Ben is keeping the FFR anywhere above 0%. Maybe he is so preoccupied with the financial system he is not noticing the rapid slowdown in the economy.

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Disclaimer: I have a vested interest in a weaker dollar, as I diversified from U.S.$ about four months ago, and have lost heavily since then. Well, it seemed like a good idea at the time.

[Fearful]

Regarding the original post, I would not draw such strong conclusions from the exchange rates. As I understand it, we are seeing both a flight to quality – buying the safest investments around – and, in other countries, unwinding “carry trades”. Neither of these is deflation.

It seems that deflation is likely, as the shrinking of the debt and asset bubble sucks cash from the economy, and slows it down further as it sucks out cash. But I saw it noted that Japan only got into deflation four years into its crash. Maybe things move faster nowadays.

I cannot understand why Ben is keeping the FFR anywhere above 0%. Maybe he is so preoccupied with the financial system he is not noticing the rapid slowdown in the economy.

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Disclaimer: I have a vested interest in a weaker dollar, as I diversified from U.S.$ about four months ago, and have lost heavily since then. Well, it seemed like a good idea at the time.

[Fearful]

Regarding the original post, I would not draw such strong conclusions from the exchange rates. As I understand it, we are seeing both a flight to quality – buying the safest investments around – and, in other countries, unwinding “carry trades”. Neither of these is deflation.

It seems that deflation is likely, as the shrinking of the debt and asset bubble sucks cash from the economy, and slows it down further as it sucks out cash. But I saw it noted that Japan only got into deflation four years into its crash. Maybe things move faster nowadays.

I cannot understand why Ben is keeping the FFR anywhere above 0%. Maybe he is so preoccupied with the financial system he is not noticing the rapid slowdown in the economy.

The dollar’s strength is likely temporary, as bad news will continue to emerge from the U.S. economy, and the Fed and Treasury will support a weakened dollar in order to prop up our export economy. The current situation seems unsustainable.

Disclaimer: I have a vested interest in a weaker dollar, as I diversified from U.S.$ about four months ago, and have lost heavily since then. Well, it seemed like a good idea at the time.

[ibjames]

[quote=sdduuuude]I just hope I’m enjoying the show from a desk instead of a couch.[/quote]

I second this, unless the work from home program goes through at my employer (in testing phase right now) yippee!

[ibjames]

[quote=sdduuuude]I just hope I’m enjoying the show from a desk instead of a couch.[/quote]

I second this, unless the work from home program goes through at my employer (in testing phase right now) yippee!

[ibjames]

[quote=sdduuuude]I just hope I’m enjoying the show from a desk instead of a couch.[/quote]

I second this, unless the work from home program goes through at my employer (in testing phase right now) yippee!

[ibjames]

[quote=sdduuuude]I just hope I’m enjoying the show from a desk instead of a couch.[/quote]

I second this, unless the work from home program goes through at my employer (in testing phase right now) yippee!

[ibjames]

[quote=sdduuuude]I just hope I’m enjoying the show from a desk instead of a couch.[/quote]

I second this, unless the work from home program goes through at my employer (in testing phase right now) yippee!

[sdduuuude]

[quote=kewp]Then, the actual Tsunami hits (inflation) as people are standing there on what used to be dry ground.

I’ve heard this analogy a couple times and I’m not sure what mechanism could cause an ‘Inflation Tsunami’.[/quote]

I suspect it would be an overreaction of pumping money into the system. By the time they stop pumping money, the pendulum is swinging the other way.

[sdduuuude]

[quote=kewp]Then, the actual Tsunami hits (inflation) as people are standing there on what used to be dry ground.

I’ve heard this analogy a couple times and I’m not sure what mechanism could cause an ‘Inflation Tsunami’.[/quote]

I suspect it would be an overreaction of pumping money into the system. By the time they stop pumping money, the pendulum is swinging the other way.

[sdduuuude]

[quote=kewp]Then, the actual Tsunami hits (inflation) as people are standing there on what used to be dry ground.

I’ve heard this analogy a couple times and I’m not sure what mechanism could cause an ‘Inflation Tsunami’.[/quote]

I suspect it would be an overreaction of pumping money into the system. By the time they stop pumping money, the pendulum is swinging the other way.

[sdduuuude]

[quote=kewp]Then, the actual Tsunami hits (inflation) as people are standing there on what used to be dry ground.

I’ve heard this analogy a couple times and I’m not sure what mechanism could cause an ‘Inflation Tsunami’.[/quote]

I suspect it would be an overreaction of pumping money into the system. By the time they stop pumping money, the pendulum is swinging the other way.

[Author]

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