Inflation – Has it arrived?

[CA renter]

[quote=Arraya][quote=Rich Toscano][quote=CA renter]
Now, we are going to see an end to the govt intervention, as most of the risks that could be transferred to the public have been transferred. This was ALWAYS about saving the banks, and that job is done. Now, they will pull the plug, and allow the deflation to happen, IMHO.[/quote]

Why would they do that? That would just put the banks at risk of failure again, in addition to a host of other consequences that would ensure they aren’t re-elected or re-appointed.[/quote]

Well it depends on their perceived need and if the banks are sufficiently protected. Geithner did come out with his “white paper” after two years in the making – stating the NEED for higher down payments and interest rates. Now, obviously, if this was done it would be implemented at a strategic time for election and appointment purposes and probably with bipartisan support and big fan fare as a necessary evil or maybe not[/quote]

Exactly, Arraya.

IMHO, if we want to know what’s coming, we have to pay attention to the “whisper propaganda.” That’s the stuff that starts coming out BEFORE anything really happens; oftentimes, you start hearing about “problems” or “plans” years before they actually do anything.

Before the downturn, even as prices were still rising, and all the ignorant sheeple were celebrating their newfound “wealth,” you heard “whispers” from within the Fed, or those tied to the financial industry/regulators that the govt would have to step in if housing prices fell. That’s why so many of us were warning and fretting about bailouts, even during the bubble. We knew that the banks (the financial industry) would be the beneficiaries of the bailouts, and that Joe Sixpack would end up taking the hit for it.

Now, we are getting the opposite. Lots of talk about fiscal restraint, and, “Gee, I guess not everyone should own a home, afterall.” We’re hearing about how down payments will have to be higher, and how the GSEs (and the govt, in general) need to get out of the mortgage market. We’re seeing the attacks on unions, because the PTB is trying to get the message out that, “there is NO money.” They are trying to show that we all will have to sacrifice in order to get our economy back on track (largely missing from those who have to sacrifice, will be the large financiers, but that’s another story).

Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.

At the end of the day, the people who have siphoned the nation’s wealth will still be rich, and they know that in order for them to get more, the reset button will need to be hit — asset prices crash, debt is destroyed, and the larger, multi-decade credit cycle can start anew. The sheeply have been wrung dry, and there is nothing left to get from them.

Much of the risk has been shifted onto the govt/taxpayers…the refinances and new home purchases over the past few years were mostly govt-backed. A lot of the debts being traded back-and-forth as various entities have gone under have been govt-backed. The past few years have been spent finding out where the risks are, and attaching a govt guarantee to them. Now, what could be done has been done. It’s time to hit the reset button; it’s time for the deflation, IMHO.

[Rich Toscano]

[quote=CA renter]
Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.[/quote]

I agree that the financial lobby has way too much influence, but I firmly disagree that what J6P thinks “doesn’t matter”… these are the people who vote, and politicians care only about re-election.

However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.

Deflation has no constituency! That’s why it won’t happen (at least not for any sustained period, or until we move to another system entirely).

[Rich Toscano]

[quote=CA renter]
Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.[/quote]

I agree that the financial lobby has way too much influence, but I firmly disagree that what J6P thinks “doesn’t matter”… these are the people who vote, and politicians care only about re-election.

However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.

Deflation has no constituency! That’s why it won’t happen (at least not for any sustained period, or until we move to another system entirely).

[Rich Toscano]

[quote=CA renter]
Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.[/quote]

I agree that the financial lobby has way too much influence, but I firmly disagree that what J6P thinks “doesn’t matter”… these are the people who vote, and politicians care only about re-election.

However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.

Deflation has no constituency! That’s why it won’t happen (at least not for any sustained period, or until we move to another system entirely).

[Rich Toscano]

[quote=CA renter]
Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.[/quote]

I agree that the financial lobby has way too much influence, but I firmly disagree that what J6P thinks “doesn’t matter”… these are the people who vote, and politicians care only about re-election.

However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.

Deflation has no constituency! That’s why it won’t happen (at least not for any sustained period, or until we move to another system entirely).

[Rich Toscano]

[quote=CA renter]
Ultimately, what Joe Sixpack thinks doesn’t matter. The puppet politicians care even more about their financial masters, because they know that as long as their financiers are behind them, they can send whatever message out to the sheeple that “this or that” is necessary, and they have no choice, etc., just like they did with the bailouts. And the sheeple will have no choice but to choose between the puppet on the right hand, or the puppet on the left hand. Both puppets serve the same master.[/quote]

I agree that the financial lobby has way too much influence, but I firmly disagree that what J6P thinks “doesn’t matter”… these are the people who vote, and politicians care only about re-election.

However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.

Deflation has no constituency! That’s why it won’t happen (at least not for any sustained period, or until we move to another system entirely).

[CA renter]

They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.

Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.

I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.

[CA renter]

They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.

Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.

I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.

[CA renter]

They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.

Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.

I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.

[CA renter]

They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.

Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.

I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.

[CA renter]

They suffered during the initial deflation because they weren’t properly prepared. If they are in cash when the deflation happens (and there is a LOT of cash on the sidelines), they win. They might take some losses for a bit, but they know that there will be some fantastic opportunities to deploy that cash when deflation hits.

Inflation is not an option at this point, barring a full-fledged currency crisis (not really an “option,” but something that might result as their inflationary tactics backfire on them). The Fed (and other central banks) is starving people around the world, and causing massive social unrest. I think they have pushed on this string as much as they possibly can, and it’s getting ugly.

I do understand that this is a contrarian viewpoint, and have always admitted that this is not an easy thing to predict. It’s just that their “inflation” is going into all the wrong places. Much of the inflationary run-up is being caused by speculation — all that cash is chasing assets and investments around the world because the Fed has foolishly forced rates into negative territory. At some point, actual end-users need to buy that stuff, and they are out of money. Of course, the speculators will buy and sell it to one another for awhile, but that cannot continue indefinitely. It is at that point — when the speculators realize there is no end demand for all those overpriced assets — that the deflation will happen.

[Arraya]

[quote=Rich Toscano]
However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.
.[/quote]

It’s not necessarily “allowing deflation to happen” it’s getting the banks out from under the crushing weight of falling RE values with government support and once they are clear, letting it go, because they have to for one reason or another. There is a line somewhere to what they are willing or able to do. I have no idea where it is, and they may not either, but they have been throwing out signals of reducing support.

[quote=Rich Toscano]
Deflation has no constituency! .[/quote]

But isn’t reducing debt and cutting spending deflationary. Seems there is a lot of people calling for that. There is a certain “party” calling for a number of deflationary measures. And they seem to have been popular this last election.

[Arraya]

[quote=Rich Toscano]
However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.
.[/quote]

It’s not necessarily “allowing deflation to happen” it’s getting the banks out from under the crushing weight of falling RE values with government support and once they are clear, letting it go, because they have to for one reason or another. There is a line somewhere to what they are willing or able to do. I have no idea where it is, and they may not either, but they have been throwing out signals of reducing support.

[quote=Rich Toscano]
Deflation has no constituency! .[/quote]

But isn’t reducing debt and cutting spending deflationary. Seems there is a lot of people calling for that. There is a certain “party” calling for a number of deflationary measures. And they seem to have been popular this last election.

[Arraya]

[quote=Rich Toscano]
However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.
.[/quote]

It’s not necessarily “allowing deflation to happen” it’s getting the banks out from under the crushing weight of falling RE values with government support and once they are clear, letting it go, because they have to for one reason or another. There is a line somewhere to what they are willing or able to do. I have no idea where it is, and they may not either, but they have been throwing out signals of reducing support.

[quote=Rich Toscano]
Deflation has no constituency! .[/quote]

But isn’t reducing debt and cutting spending deflationary. Seems there is a lot of people calling for that. There is a certain “party” calling for a number of deflationary measures. And they seem to have been popular this last election.

[Arraya]

[quote=Rich Toscano]
However, that’s beside the point… even under your interpretation, WHY would they allow a deflation to happen? The banks made lots of money when there was inflation, were brought to the brink of disaster while there was deflation, and then started making huge money again when inflation came back. If the banks are running the show, we know which option they will choose.
.[/quote]

It’s not necessarily “allowing deflation to happen” it’s getting the banks out from under the crushing weight of falling RE values with government support and once they are clear, letting it go, because they have to for one reason or another. There is a line somewhere to what they are willing or able to do. I have no idea where it is, and they may not either, but they have been throwing out signals of reducing support.

[quote=Rich Toscano]
Deflation has no constituency! .[/quote]

But isn’t reducing debt and cutting spending deflationary. Seems there is a lot of people calling for that. There is a certain “party” calling for a number of deflationary measures. And they seem to have been popular this last election.

[Author]

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