Opinions on this economic forecast

[KIBU]

[quote=Arraya] Money, banking and credit has changed very, very little over the past several decades and the outcome of an epochal credit collapse should not be that much different.

The way things add up now, it’s strong deflation leading to hypeinflation as the US will not be about to pay it’s debt or entitlements.[/quote]

Arraya, I learn a lot from your posts. I also been watching credit issue, however, my take is that they have been surely improved. The situation is not back at the pre crisis level, but it is now in a much less imminently dangerous situation, even when it rests on much government supports for its sustainability.

Unlike the great depression, this time the govt has diagnosed the problem correctly and has poured money from the beginning. Yes, by itself, all the printing may not be enough. But I see more and more signs that it has created an environment where capital could be attracted back into the new environment. IMHO, it may be that deflation will not be able to show up “strong” as you said, before we see inflation or hyper inflation. We may not see deflation before the tsunami of inflation coming ashore.

http://www.bloomberg.com/apps/news?pid=20601068&sid=akFxvYlcBGZg

[bsrsharma]

Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.

Gold is a well known commodity and hence its value as “money” is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)

[bsrsharma]

Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.

Gold is a well known commodity and hence its value as “money” is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)

[bsrsharma]

Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.

Gold is a well known commodity and hence its value as “money” is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)

[bsrsharma]

Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.

Gold is a well known commodity and hence its value as “money” is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)

[bsrsharma]

Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.

Gold is a well known commodity and hence its value as “money” is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)

[Nor-LA-SD-guy]

Now it’s not just Asia, I hear Canada is starting to have a housing bubble as well.

I tell you it’s just us man !!

[Nor-LA-SD-guy]

Now it’s not just Asia, I hear Canada is starting to have a housing bubble as well.

I tell you it’s just us man !!

[Nor-LA-SD-guy]

Now it’s not just Asia, I hear Canada is starting to have a housing bubble as well.

I tell you it’s just us man !!

[Nor-LA-SD-guy]

Now it’s not just Asia, I hear Canada is starting to have a housing bubble as well.

I tell you it’s just us man !!

[Nor-LA-SD-guy]

Now it’s not just Asia, I hear Canada is starting to have a housing bubble as well.

I tell you it’s just us man !!

[moneymaker]

“It’s the end of the world,as we know it”, I mean isn’t Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don’t get all pissed off and start some kind of feud with us,there I didn’t say the “W” word.

How will the US be able to keep rates down, when other countries start raising theirs?

[moneymaker]

“It’s the end of the world,as we know it”, I mean isn’t Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don’t get all pissed off and start some kind of feud with us,there I didn’t say the “W” word.

How will the US be able to keep rates down, when other countries start raising theirs?

[moneymaker]

“It’s the end of the world,as we know it”, I mean isn’t Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don’t get all pissed off and start some kind of feud with us,there I didn’t say the “W” word.

How will the US be able to keep rates down, when other countries start raising theirs?

[moneymaker]

“It’s the end of the world,as we know it”, I mean isn’t Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don’t get all pissed off and start some kind of feud with us,there I didn’t say the “W” word.

How will the US be able to keep rates down, when other countries start raising theirs?

[Author]

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