Home › Forums › Financial Markets/Economics › Stagflation hits the main stream press!!!
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JWM in SD.
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February 26, 2008 at 10:35 PM #160801February 26, 2008 at 11:25 PM #160811
Eugene
ParticipantThis is what stagflation looks like:
[img_assist|nid=6669|title=|desc=|link=node|align=left|width=466|height=280]
Monetary base growing at 8%/year, M2 money supply growing even faster, fixed-income security traders demanding steep inflation premiums, mortgage rates above 8%.
This is what stagflation DOESN’T look like:
[img_assist|nid=6670|title=|desc=|link=node|align=left|width=466|height=280]
February 26, 2008 at 11:25 PM #160799Eugene
ParticipantThis is what stagflation looks like:
[img_assist|nid=6669|title=|desc=|link=node|align=left|width=466|height=280]
Monetary base growing at 8%/year, M2 money supply growing even faster, fixed-income security traders demanding steep inflation premiums, mortgage rates above 8%.
This is what stagflation DOESN’T look like:
[img_assist|nid=6670|title=|desc=|link=node|align=left|width=466|height=280]
February 26, 2008 at 11:25 PM #160502Eugene
ParticipantThis is what stagflation looks like:
[img_assist|nid=6669|title=|desc=|link=node|align=left|width=466|height=280]
Monetary base growing at 8%/year, M2 money supply growing even faster, fixed-income security traders demanding steep inflation premiums, mortgage rates above 8%.
This is what stagflation DOESN’T look like:
[img_assist|nid=6670|title=|desc=|link=node|align=left|width=466|height=280]
February 26, 2008 at 11:25 PM #160831Eugene
ParticipantThis is what stagflation looks like:
[img_assist|nid=6669|title=|desc=|link=node|align=left|width=466|height=280]
Monetary base growing at 8%/year, M2 money supply growing even faster, fixed-income security traders demanding steep inflation premiums, mortgage rates above 8%.
This is what stagflation DOESN’T look like:
[img_assist|nid=6670|title=|desc=|link=node|align=left|width=466|height=280]
February 26, 2008 at 11:25 PM #160898Eugene
ParticipantThis is what stagflation looks like:
[img_assist|nid=6669|title=|desc=|link=node|align=left|width=466|height=280]
Monetary base growing at 8%/year, M2 money supply growing even faster, fixed-income security traders demanding steep inflation premiums, mortgage rates above 8%.
This is what stagflation DOESN’T look like:
[img_assist|nid=6670|title=|desc=|link=node|align=left|width=466|height=280]
February 26, 2008 at 11:29 PM #160803Deal Hunter
ParticipantWe all have nothing to worry about. The U.S. Dollar is the world’s reserve currency. It is the standard by which the world operates business. We can rest easy because of the respect and reverence the world has for our Dollar.
Now, if only Iran would shut up about possibly selling their oil in exchange for Euro, we could relax more and go back to business as usual. What, Iran hasn’t said anything? Well, not directly. However, has anyone listened in on any Hugo Chavez speaches lately?
But I digress. Please, relax, everyone. Go back to your $8 lattes bought on your Capital One Master Cards. Everything is fine. The U.S. Dollar is still the world’s reserve currency.
February 26, 2008 at 11:29 PM #160816Deal Hunter
ParticipantWe all have nothing to worry about. The U.S. Dollar is the world’s reserve currency. It is the standard by which the world operates business. We can rest easy because of the respect and reverence the world has for our Dollar.
Now, if only Iran would shut up about possibly selling their oil in exchange for Euro, we could relax more and go back to business as usual. What, Iran hasn’t said anything? Well, not directly. However, has anyone listened in on any Hugo Chavez speaches lately?
But I digress. Please, relax, everyone. Go back to your $8 lattes bought on your Capital One Master Cards. Everything is fine. The U.S. Dollar is still the world’s reserve currency.
February 26, 2008 at 11:29 PM #160838Deal Hunter
ParticipantWe all have nothing to worry about. The U.S. Dollar is the world’s reserve currency. It is the standard by which the world operates business. We can rest easy because of the respect and reverence the world has for our Dollar.
Now, if only Iran would shut up about possibly selling their oil in exchange for Euro, we could relax more and go back to business as usual. What, Iran hasn’t said anything? Well, not directly. However, has anyone listened in on any Hugo Chavez speaches lately?
But I digress. Please, relax, everyone. Go back to your $8 lattes bought on your Capital One Master Cards. Everything is fine. The U.S. Dollar is still the world’s reserve currency.
February 26, 2008 at 11:29 PM #160507Deal Hunter
ParticipantWe all have nothing to worry about. The U.S. Dollar is the world’s reserve currency. It is the standard by which the world operates business. We can rest easy because of the respect and reverence the world has for our Dollar.
Now, if only Iran would shut up about possibly selling their oil in exchange for Euro, we could relax more and go back to business as usual. What, Iran hasn’t said anything? Well, not directly. However, has anyone listened in on any Hugo Chavez speaches lately?
But I digress. Please, relax, everyone. Go back to your $8 lattes bought on your Capital One Master Cards. Everything is fine. The U.S. Dollar is still the world’s reserve currency.
February 26, 2008 at 11:29 PM #160904Deal Hunter
ParticipantWe all have nothing to worry about. The U.S. Dollar is the world’s reserve currency. It is the standard by which the world operates business. We can rest easy because of the respect and reverence the world has for our Dollar.
Now, if only Iran would shut up about possibly selling their oil in exchange for Euro, we could relax more and go back to business as usual. What, Iran hasn’t said anything? Well, not directly. However, has anyone listened in on any Hugo Chavez speaches lately?
But I digress. Please, relax, everyone. Go back to your $8 lattes bought on your Capital One Master Cards. Everything is fine. The U.S. Dollar is still the world’s reserve currency.
February 27, 2008 at 5:20 AM #1605524plexowner
Participantthe global monetary system is interesting
when a factory in China exports toys to America they receive US dollars in payment – they then take those American $$ to their local bank and exchange them for yuan because the local grocery store in China doesn’t sell milk in US dollars, it sells milk in yuan
now the local banks all over China send those US dollars to the Chinese central bank and exchange them for yuan (because the local banks don’t operate in US dollars, they operate in yuan)
note that by exporting goods to America and receiving payment in US dollars the demand for the yuan within China has increased – both the toy seller and the local bank have new demand for yuan because of the exports – if the supply of yuan remains fixed, the value of the yuan will increase (econ 101 – more demand with fixed supply means increased value)
the Chinese don’t want the yuan to rise in value so they increase the supply of it – the central bank prints enough yuan to buy up the new US dollars that have entered the country – increasing the supply of yuan available within China creates inflation as more money chases a fixed supply of goods and services
this monetary process has several results:
– US dollars pile up in the Chinese central bank
– the supply of yuan increases within China
– inflation occurs within Chinathe process described above is occurring in most of the nations that trade with the US – 18 out of 20 major central banks have been inflating their currency at double-digit rates for the last decade or so
the world is starting to suffer from the inflation in prices that is caused by this global monetary debasement – on monday, wheat prices jumped by $4.00 per bushel – that is nearly a 25% increase in one day – I’m sitting here this morning looking at charts of gold at $963.10, oil at $101.04, silver at $19.28 – tell me those prices don’t reflect massive inflation
as far as the inflation / deflation debate – I like the Kondratiev cycle theory because it describes how inflation (whether ‘hyper’ or not) results in deflation – according to the K cycle theory, we will experience inflation in commodities as asset prices deflate (kinda like what’s happening right now) – put me firmly in the ‘deflationista’ camp
February 27, 2008 at 5:20 AM #1609464plexowner
Participantthe global monetary system is interesting
when a factory in China exports toys to America they receive US dollars in payment – they then take those American $$ to their local bank and exchange them for yuan because the local grocery store in China doesn’t sell milk in US dollars, it sells milk in yuan
now the local banks all over China send those US dollars to the Chinese central bank and exchange them for yuan (because the local banks don’t operate in US dollars, they operate in yuan)
note that by exporting goods to America and receiving payment in US dollars the demand for the yuan within China has increased – both the toy seller and the local bank have new demand for yuan because of the exports – if the supply of yuan remains fixed, the value of the yuan will increase (econ 101 – more demand with fixed supply means increased value)
the Chinese don’t want the yuan to rise in value so they increase the supply of it – the central bank prints enough yuan to buy up the new US dollars that have entered the country – increasing the supply of yuan available within China creates inflation as more money chases a fixed supply of goods and services
this monetary process has several results:
– US dollars pile up in the Chinese central bank
– the supply of yuan increases within China
– inflation occurs within Chinathe process described above is occurring in most of the nations that trade with the US – 18 out of 20 major central banks have been inflating their currency at double-digit rates for the last decade or so
the world is starting to suffer from the inflation in prices that is caused by this global monetary debasement – on monday, wheat prices jumped by $4.00 per bushel – that is nearly a 25% increase in one day – I’m sitting here this morning looking at charts of gold at $963.10, oil at $101.04, silver at $19.28 – tell me those prices don’t reflect massive inflation
as far as the inflation / deflation debate – I like the Kondratiev cycle theory because it describes how inflation (whether ‘hyper’ or not) results in deflation – according to the K cycle theory, we will experience inflation in commodities as asset prices deflate (kinda like what’s happening right now) – put me firmly in the ‘deflationista’ camp
February 27, 2008 at 5:20 AM #1608804plexowner
Participantthe global monetary system is interesting
when a factory in China exports toys to America they receive US dollars in payment – they then take those American $$ to their local bank and exchange them for yuan because the local grocery store in China doesn’t sell milk in US dollars, it sells milk in yuan
now the local banks all over China send those US dollars to the Chinese central bank and exchange them for yuan (because the local banks don’t operate in US dollars, they operate in yuan)
note that by exporting goods to America and receiving payment in US dollars the demand for the yuan within China has increased – both the toy seller and the local bank have new demand for yuan because of the exports – if the supply of yuan remains fixed, the value of the yuan will increase (econ 101 – more demand with fixed supply means increased value)
the Chinese don’t want the yuan to rise in value so they increase the supply of it – the central bank prints enough yuan to buy up the new US dollars that have entered the country – increasing the supply of yuan available within China creates inflation as more money chases a fixed supply of goods and services
this monetary process has several results:
– US dollars pile up in the Chinese central bank
– the supply of yuan increases within China
– inflation occurs within Chinathe process described above is occurring in most of the nations that trade with the US – 18 out of 20 major central banks have been inflating their currency at double-digit rates for the last decade or so
the world is starting to suffer from the inflation in prices that is caused by this global monetary debasement – on monday, wheat prices jumped by $4.00 per bushel – that is nearly a 25% increase in one day – I’m sitting here this morning looking at charts of gold at $963.10, oil at $101.04, silver at $19.28 – tell me those prices don’t reflect massive inflation
as far as the inflation / deflation debate – I like the Kondratiev cycle theory because it describes how inflation (whether ‘hyper’ or not) results in deflation – according to the K cycle theory, we will experience inflation in commodities as asset prices deflate (kinda like what’s happening right now) – put me firmly in the ‘deflationista’ camp
February 27, 2008 at 5:20 AM #1608604plexowner
Participantthe global monetary system is interesting
when a factory in China exports toys to America they receive US dollars in payment – they then take those American $$ to their local bank and exchange them for yuan because the local grocery store in China doesn’t sell milk in US dollars, it sells milk in yuan
now the local banks all over China send those US dollars to the Chinese central bank and exchange them for yuan (because the local banks don’t operate in US dollars, they operate in yuan)
note that by exporting goods to America and receiving payment in US dollars the demand for the yuan within China has increased – both the toy seller and the local bank have new demand for yuan because of the exports – if the supply of yuan remains fixed, the value of the yuan will increase (econ 101 – more demand with fixed supply means increased value)
the Chinese don’t want the yuan to rise in value so they increase the supply of it – the central bank prints enough yuan to buy up the new US dollars that have entered the country – increasing the supply of yuan available within China creates inflation as more money chases a fixed supply of goods and services
this monetary process has several results:
– US dollars pile up in the Chinese central bank
– the supply of yuan increases within China
– inflation occurs within Chinathe process described above is occurring in most of the nations that trade with the US – 18 out of 20 major central banks have been inflating their currency at double-digit rates for the last decade or so
the world is starting to suffer from the inflation in prices that is caused by this global monetary debasement – on monday, wheat prices jumped by $4.00 per bushel – that is nearly a 25% increase in one day – I’m sitting here this morning looking at charts of gold at $963.10, oil at $101.04, silver at $19.28 – tell me those prices don’t reflect massive inflation
as far as the inflation / deflation debate – I like the Kondratiev cycle theory because it describes how inflation (whether ‘hyper’ or not) results in deflation – according to the K cycle theory, we will experience inflation in commodities as asset prices deflate (kinda like what’s happening right now) – put me firmly in the ‘deflationista’ camp
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