What am I missing? Is that a train coming at me or am I Chicken Little?

[fuggy]

We actually have some money in Euros because we worked there in the past. Every day we watch our “investment” (we just haven’t exchanged them yet) go up a percent or so.
That is fun, but you kind of wonder if that can continue forever.
Europe has problems, too. Nobody has children except the muslims. They have debt and their money is fiat money, too.

fuggy

[drunkle]

johnny:

the recent readings i’ve done are contradictory to your claims and i would like to explore this further…

you say that the fed can essentially print unlimited dollars. but that’s false; when the value of the dollar hits zero, no amount of additional printing will help.

inflation is winding down as credit is contracting. the high rate of defaults are destroying banks and brokers who built jenga structures of leverage off liar loans. these banks and brokers are scrambling to shore up capital and not scrambling to issue more bad loans.

you’re suggesting that inflation is a means of producing infinite growth. that by printing money, value will be pushed up. which is not logical; an apple is an apple at 10 cents or 20 dollars. the price of the apple may increase with everyone awash in funny money, but the value is the same.

evidence of deflation is here: home prices, job losses, tax revenue losses, corporate earnings losses… these impacts will filter through the economy, tanking the prices of food, gold, oil, etc because demand will evaporate. evaporation of demand for overpriced homes is what started this ball rolling. when liar loans became the norm along with free credit, inflation did occur. but destruction of credit is now causing deflation.

the fed cannot print money. interbank interest rate cuts do not equal printing of money. interbank interest rate cuts only matter if banks are lending to each other. they are not. discount window, taf and taf2 loans require collateral and while collateral is becoming pretty liberal, while allowable institutions is becoming liberal, that’s still not the same as printing money; if the collateral continues to dump in value, the borrowing institutions must pay the difference.

purchasing a home at 3x wages may hedge against inflation, but not at 9x wages.

[drunkle]

johnny:

the recent readings i’ve done are contradictory to your claims and i would like to explore this further…

you say that the fed can essentially print unlimited dollars. but that’s false; when the value of the dollar hits zero, no amount of additional printing will help.

inflation is winding down as credit is contracting. the high rate of defaults are destroying banks and brokers who built jenga structures of leverage off liar loans. these banks and brokers are scrambling to shore up capital and not scrambling to issue more bad loans.

you’re suggesting that inflation is a means of producing infinite growth. that by printing money, value will be pushed up. which is not logical; an apple is an apple at 10 cents or 20 dollars. the price of the apple may increase with everyone awash in funny money, but the value is the same.

evidence of deflation is here: home prices, job losses, tax revenue losses, corporate earnings losses… these impacts will filter through the economy, tanking the prices of food, gold, oil, etc because demand will evaporate. evaporation of demand for overpriced homes is what started this ball rolling. when liar loans became the norm along with free credit, inflation did occur. but destruction of credit is now causing deflation.

the fed cannot print money. interbank interest rate cuts do not equal printing of money. interbank interest rate cuts only matter if banks are lending to each other. they are not. discount window, taf and taf2 loans require collateral and while collateral is becoming pretty liberal, while allowable institutions is becoming liberal, that’s still not the same as printing money; if the collateral continues to dump in value, the borrowing institutions must pay the difference.

purchasing a home at 3x wages may hedge against inflation, but not at 9x wages.

[drunkle]

johnny:

the recent readings i’ve done are contradictory to your claims and i would like to explore this further…

you say that the fed can essentially print unlimited dollars. but that’s false; when the value of the dollar hits zero, no amount of additional printing will help.

inflation is winding down as credit is contracting. the high rate of defaults are destroying banks and brokers who built jenga structures of leverage off liar loans. these banks and brokers are scrambling to shore up capital and not scrambling to issue more bad loans.

you’re suggesting that inflation is a means of producing infinite growth. that by printing money, value will be pushed up. which is not logical; an apple is an apple at 10 cents or 20 dollars. the price of the apple may increase with everyone awash in funny money, but the value is the same.

evidence of deflation is here: home prices, job losses, tax revenue losses, corporate earnings losses… these impacts will filter through the economy, tanking the prices of food, gold, oil, etc because demand will evaporate. evaporation of demand for overpriced homes is what started this ball rolling. when liar loans became the norm along with free credit, inflation did occur. but destruction of credit is now causing deflation.

the fed cannot print money. interbank interest rate cuts do not equal printing of money. interbank interest rate cuts only matter if banks are lending to each other. they are not. discount window, taf and taf2 loans require collateral and while collateral is becoming pretty liberal, while allowable institutions is becoming liberal, that’s still not the same as printing money; if the collateral continues to dump in value, the borrowing institutions must pay the difference.

purchasing a home at 3x wages may hedge against inflation, but not at 9x wages.

[drunkle]

johnny:

the recent readings i’ve done are contradictory to your claims and i would like to explore this further…

you say that the fed can essentially print unlimited dollars. but that’s false; when the value of the dollar hits zero, no amount of additional printing will help.

inflation is winding down as credit is contracting. the high rate of defaults are destroying banks and brokers who built jenga structures of leverage off liar loans. these banks and brokers are scrambling to shore up capital and not scrambling to issue more bad loans.

you’re suggesting that inflation is a means of producing infinite growth. that by printing money, value will be pushed up. which is not logical; an apple is an apple at 10 cents or 20 dollars. the price of the apple may increase with everyone awash in funny money, but the value is the same.

evidence of deflation is here: home prices, job losses, tax revenue losses, corporate earnings losses… these impacts will filter through the economy, tanking the prices of food, gold, oil, etc because demand will evaporate. evaporation of demand for overpriced homes is what started this ball rolling. when liar loans became the norm along with free credit, inflation did occur. but destruction of credit is now causing deflation.

the fed cannot print money. interbank interest rate cuts do not equal printing of money. interbank interest rate cuts only matter if banks are lending to each other. they are not. discount window, taf and taf2 loans require collateral and while collateral is becoming pretty liberal, while allowable institutions is becoming liberal, that’s still not the same as printing money; if the collateral continues to dump in value, the borrowing institutions must pay the difference.

purchasing a home at 3x wages may hedge against inflation, but not at 9x wages.

[drunkle]

johnny:

the recent readings i’ve done are contradictory to your claims and i would like to explore this further…

you say that the fed can essentially print unlimited dollars. but that’s false; when the value of the dollar hits zero, no amount of additional printing will help.

inflation is winding down as credit is contracting. the high rate of defaults are destroying banks and brokers who built jenga structures of leverage off liar loans. these banks and brokers are scrambling to shore up capital and not scrambling to issue more bad loans.

you’re suggesting that inflation is a means of producing infinite growth. that by printing money, value will be pushed up. which is not logical; an apple is an apple at 10 cents or 20 dollars. the price of the apple may increase with everyone awash in funny money, but the value is the same.

evidence of deflation is here: home prices, job losses, tax revenue losses, corporate earnings losses… these impacts will filter through the economy, tanking the prices of food, gold, oil, etc because demand will evaporate. evaporation of demand for overpriced homes is what started this ball rolling. when liar loans became the norm along with free credit, inflation did occur. but destruction of credit is now causing deflation.

the fed cannot print money. interbank interest rate cuts do not equal printing of money. interbank interest rate cuts only matter if banks are lending to each other. they are not. discount window, taf and taf2 loans require collateral and while collateral is becoming pretty liberal, while allowable institutions is becoming liberal, that’s still not the same as printing money; if the collateral continues to dump in value, the borrowing institutions must pay the difference.

purchasing a home at 3x wages may hedge against inflation, but not at 9x wages.

[echo5juliet]

Drunkle, thank you. This is the type of exchange I was hoping for. While not a J6P I am hard pressed to see the potential silver linings and bright future when I am looking at some of the same current day situations you mentioned (home prices, credit, jobs, consumer confid, etc).

When it comes down to it, I am a little fish that is smart enough to know a storm is brewing. I just don’t know how bad or how safe my position really is.

By little fish, I mean I am not an active investor. I have $100K in a 401K (employee program) and it is managed by a firm (Principal). No real choice, just shares of their canned portfolios. I have a house bought in ’98 for $250K on a 6.5% 30yr fixed in a nice part of town that allows me salty sea breezes and nightly sea world fireworks. East of I5 but only by a few blocks. A $100K second on a variable spend on some fixups and a couple frivolous vacations.

So I sit here and wonder just how bad it will be and which demographic will get stung the hardest.

[echo5juliet]

Drunkle, thank you. This is the type of exchange I was hoping for. While not a J6P I am hard pressed to see the potential silver linings and bright future when I am looking at some of the same current day situations you mentioned (home prices, credit, jobs, consumer confid, etc).

When it comes down to it, I am a little fish that is smart enough to know a storm is brewing. I just don’t know how bad or how safe my position really is.

By little fish, I mean I am not an active investor. I have $100K in a 401K (employee program) and it is managed by a firm (Principal). No real choice, just shares of their canned portfolios. I have a house bought in ’98 for $250K on a 6.5% 30yr fixed in a nice part of town that allows me salty sea breezes and nightly sea world fireworks. East of I5 but only by a few blocks. A $100K second on a variable spend on some fixups and a couple frivolous vacations.

So I sit here and wonder just how bad it will be and which demographic will get stung the hardest.

[echo5juliet]

Drunkle, thank you. This is the type of exchange I was hoping for. While not a J6P I am hard pressed to see the potential silver linings and bright future when I am looking at some of the same current day situations you mentioned (home prices, credit, jobs, consumer confid, etc).

When it comes down to it, I am a little fish that is smart enough to know a storm is brewing. I just don’t know how bad or how safe my position really is.

By little fish, I mean I am not an active investor. I have $100K in a 401K (employee program) and it is managed by a firm (Principal). No real choice, just shares of their canned portfolios. I have a house bought in ’98 for $250K on a 6.5% 30yr fixed in a nice part of town that allows me salty sea breezes and nightly sea world fireworks. East of I5 but only by a few blocks. A $100K second on a variable spend on some fixups and a couple frivolous vacations.

So I sit here and wonder just how bad it will be and which demographic will get stung the hardest.

[echo5juliet]

Drunkle, thank you. This is the type of exchange I was hoping for. While not a J6P I am hard pressed to see the potential silver linings and bright future when I am looking at some of the same current day situations you mentioned (home prices, credit, jobs, consumer confid, etc).

When it comes down to it, I am a little fish that is smart enough to know a storm is brewing. I just don’t know how bad or how safe my position really is.

By little fish, I mean I am not an active investor. I have $100K in a 401K (employee program) and it is managed by a firm (Principal). No real choice, just shares of their canned portfolios. I have a house bought in ’98 for $250K on a 6.5% 30yr fixed in a nice part of town that allows me salty sea breezes and nightly sea world fireworks. East of I5 but only by a few blocks. A $100K second on a variable spend on some fixups and a couple frivolous vacations.

So I sit here and wonder just how bad it will be and which demographic will get stung the hardest.

[echo5juliet]

Drunkle, thank you. This is the type of exchange I was hoping for. While not a J6P I am hard pressed to see the potential silver linings and bright future when I am looking at some of the same current day situations you mentioned (home prices, credit, jobs, consumer confid, etc).

When it comes down to it, I am a little fish that is smart enough to know a storm is brewing. I just don’t know how bad or how safe my position really is.

By little fish, I mean I am not an active investor. I have $100K in a 401K (employee program) and it is managed by a firm (Principal). No real choice, just shares of their canned portfolios. I have a house bought in ’98 for $250K on a 6.5% 30yr fixed in a nice part of town that allows me salty sea breezes and nightly sea world fireworks. East of I5 but only by a few blocks. A $100K second on a variable spend on some fixups and a couple frivolous vacations.

So I sit here and wonder just how bad it will be and which demographic will get stung the hardest.

[blahblahblah]

The deflation/inflation scenario question is interesting and I see the arguments for both cases. However, the one thing I see in favor of the inflationary scenario is that it will benefit the Maja Playaz at the very tippy-top of the pyramid. They have already sheltered their wealth in other currencies, commodities, etc… If the dollar continues to slide against their investments, they will be able to snap up everything super-cheap once the collapse is complete. They will also use their power as market makers to manipulate currencies and commodities to fleece the little fish along the way.

If the deflation scenario takes hold, it will be harder for the Maja Playaz to sweep up the carnage for pennies on the dollar at the end, since their investments will be devalued as well. Since the Maja Playaz are the ones writing all the laws, getting all the government bailouts, etc… it is likely that they will get their way. Personally I think this has been their MO all along…

The tricky part for us little fish is to find some place to keep our wealth so that we don’t get fleeced as well. Gold and silver are very easy for the Maja Playaz to manipulate, so if you’re in those be prepared for a bumpy ride. Beyond that I have no idea. Jim Rogers says agriculture, but commodity investing seems risky and complicated. Perhaps we’re getting ready for another big move in the Beanie Baby market — it’s been depressed for years! NOT INVESTMENT ADVICE.

[blahblahblah]

The deflation/inflation scenario question is interesting and I see the arguments for both cases. However, the one thing I see in favor of the inflationary scenario is that it will benefit the Maja Playaz at the very tippy-top of the pyramid. They have already sheltered their wealth in other currencies, commodities, etc… If the dollar continues to slide against their investments, they will be able to snap up everything super-cheap once the collapse is complete. They will also use their power as market makers to manipulate currencies and commodities to fleece the little fish along the way.

If the deflation scenario takes hold, it will be harder for the Maja Playaz to sweep up the carnage for pennies on the dollar at the end, since their investments will be devalued as well. Since the Maja Playaz are the ones writing all the laws, getting all the government bailouts, etc… it is likely that they will get their way. Personally I think this has been their MO all along…

The tricky part for us little fish is to find some place to keep our wealth so that we don’t get fleeced as well. Gold and silver are very easy for the Maja Playaz to manipulate, so if you’re in those be prepared for a bumpy ride. Beyond that I have no idea. Jim Rogers says agriculture, but commodity investing seems risky and complicated. Perhaps we’re getting ready for another big move in the Beanie Baby market — it’s been depressed for years! NOT INVESTMENT ADVICE.

[blahblahblah]

The deflation/inflation scenario question is interesting and I see the arguments for both cases. However, the one thing I see in favor of the inflationary scenario is that it will benefit the Maja Playaz at the very tippy-top of the pyramid. They have already sheltered their wealth in other currencies, commodities, etc… If the dollar continues to slide against their investments, they will be able to snap up everything super-cheap once the collapse is complete. They will also use their power as market makers to manipulate currencies and commodities to fleece the little fish along the way.

If the deflation scenario takes hold, it will be harder for the Maja Playaz to sweep up the carnage for pennies on the dollar at the end, since their investments will be devalued as well. Since the Maja Playaz are the ones writing all the laws, getting all the government bailouts, etc… it is likely that they will get their way. Personally I think this has been their MO all along…

The tricky part for us little fish is to find some place to keep our wealth so that we don’t get fleeced as well. Gold and silver are very easy for the Maja Playaz to manipulate, so if you’re in those be prepared for a bumpy ride. Beyond that I have no idea. Jim Rogers says agriculture, but commodity investing seems risky and complicated. Perhaps we’re getting ready for another big move in the Beanie Baby market — it’s been depressed for years! NOT INVESTMENT ADVICE.

[blahblahblah]

The deflation/inflation scenario question is interesting and I see the arguments for both cases. However, the one thing I see in favor of the inflationary scenario is that it will benefit the Maja Playaz at the very tippy-top of the pyramid. They have already sheltered their wealth in other currencies, commodities, etc… If the dollar continues to slide against their investments, they will be able to snap up everything super-cheap once the collapse is complete. They will also use their power as market makers to manipulate currencies and commodities to fleece the little fish along the way.

If the deflation scenario takes hold, it will be harder for the Maja Playaz to sweep up the carnage for pennies on the dollar at the end, since their investments will be devalued as well. Since the Maja Playaz are the ones writing all the laws, getting all the government bailouts, etc… it is likely that they will get their way. Personally I think this has been their MO all along…

The tricky part for us little fish is to find some place to keep our wealth so that we don’t get fleeced as well. Gold and silver are very easy for the Maja Playaz to manipulate, so if you’re in those be prepared for a bumpy ride. Beyond that I have no idea. Jim Rogers says agriculture, but commodity investing seems risky and complicated. Perhaps we’re getting ready for another big move in the Beanie Baby market — it’s been depressed for years! NOT INVESTMENT ADVICE.

[Author]

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