They just print money to deal with the recession. I keep thinking inflation should happen, that the dollar should go down the toilet, and that eventually Tnotes and Tbills won't be worth squat. Right now much of the world is tied to the USD. Once that is not common, I think we will be poor as church mice.
Where is this going... your thoughts? Is a mattress the next big investment tool?
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"Tucson sweet. Best chili in the Saguaro."
Welcome back, Carter!! All the lefties were worried about Bush's "third term", well, now we get Carter's second term. And although some of you are too young to have been around for it (I was only 8, but I know some history), others know what we're headed for because you've seen it before. Oh, well. At least this paves the way for a single term presidency.
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Believe or not we might wish we had Carter back. This guy is worse because the sheeple flock after and worship him. He could actually get something done. However, what he wants to do is all wrong. This could be FDR's fourth term.[:'(]
BTW, you are right about the U.S. Dollar, time will come when a truck load of it won't buy a loaf of bread.
Believe or not we might wish we had Carter back. This guy is worse because the sheeple flock after and worship him. He could actually get something done. However, what he wants to do is all wrong. This could be FDR's fourth term.[:'(]
BTW, you are right about the U.S. Dollar, time will come when a truck load of it won't buy a loaf of bread.
Had a great discussion tonight about how to protect your money. Talked about countiries where to invest and what else. Bottomline, if you owe money, your doing great, if you have money you need to transfere it into metals.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Yep, sure looks like inflation is in our future. However, WHEN is the question. Right now, China and other foreign countries depend on us for their economies, so will not let their currencies appreciate relative to ours or else they will suffer from loss ofexports. Look for China and ***an to ease out of the dollar as they look to replace our demand for their goods with domestic and other foreign demand. The dollar should at least slowly lose value. For the time being, the dollar is still the safe currency, particularly when other countries are having economic problems of their own. It wouldn't hurt to own some silver or gold. Frankly, I've heard quite a fewpredictions from people who got this crisis right that theS&P will fall to 600 this year. Opinions are like turd cutters, but mine is that this crisis is deeper than the market is anticipating, that we WILL recover from it, but that ultimately, the debt will bring us down again in a way that makes us wish we were only as bad off as we are right now.
They just print money to deal with the recession. I keep thinking inflation should happen, that the dollar should go down the toilet, and that eventually Tnotes and Tbills won't be worth squat. Right now much of the world is tied to the USD. Once that is not common, I think we will be poor as church mice.
Where is this going... your thoughts? Is a mattress the next big investment tool?
I think what happened was that in September-October of last year, after two years of a large decline in real estate values, rapidly falling stock prices and the loss of liquidity in the credit markets in the wake of the Lehman Brothers bankruptcy, the Federal Reserve and Treasury Department felt that the biggest threat to the economy was a catastrophic deflation similar to the 1930s. Severe deflationary episodes occur when there is an excess of real assets for sale and there is only enough money in the economy to purchase them at extremely depressed prices.
I think the Fed and Treasury panicked and saw pouring huge amounts of capital into the economy as the only way to stop a downward spiral of housing and stock prices that would lead to further erosion in value of physical and financial assets. They no doubt hoped that with additional capital, banks would make more loans to businesses and consumers and that would restart the consumption and investment that drives the economy and lift us out of recession.
However, that does not seem to be what happened in November and December as financial institutions were still reluctant to risk more losses by making loans that might be defaulted on so credit continued to be tight and business investment and consumer spending fell even further. This led to large layoffs in a wide range of industries which made consumers even more reluctant to spend money and lenders less willing to lend.
It is hard to determine if this strategy of flooding the economy with money was a failure or not. Many economists would argue if had just let AIG, Citi Bank, GM and the others go into bankruptcy liquidation we would be in much worse shape than we are in now. The counter argument to that is that while these $700 billion in bail outs may have prevented severe short term pain they have done so at a cost of essentially nationalizing our Financial and Automobile industries which is not compatable with free market principles.
I think the incoming Obama Administration is of the view that providing large amounts of capital to the private sector over the past two months, while not bringing immediate economic relief, did prevent an even worse catastrophe. They now seem to be hoping that by injecting a huge ($800 billion) amount of additional funds into the economy they can stimulate the economy enough to end the recession. This strategy may ultimately prove to be inflationary, but with housing prices continuing to fall, the large drop in energy prices over the last few months, the need for manufacturers to deeply discount goods to move them and continued weakness in the equities markets the new administration is likely to be persuaded that in the short run serious inflationary pressures are unlikely and that a catastrophic deflation is still the greatest threat we face. They seem to be willing to risk 1970s level inflation if that is what it takes to insure there is no repeat of the deflation of the 1930s.
sp10. I think this is pretty accurate. If we were standing back and watching this from afar, I think we would see a bunch of people playing a game of monopoly. The game goes on but all the money that was printed for the game has been used. However nobody wants the game to end so they print more money or change the numbers on the bills to give them a higher value. They also write I.O.U's to the banker and get a free pass through the hazards of the game. Of course to do this, the rules of the game have to be changed. As long as all the players agree to the rule changes, the game can go on.
We may now be at the point where the player who is clearly in the lead gets tired of the game and wants to take his winnings and go home. However he finds that he has won nothing and the value of the game is no more that it was to start with.
The housing market lead the way. people bought a 40,000 dollar home, did a few cosmetic improvements and sold the house for 60,000. We now have a 40,000 dollar house selling for 60,000. They next guy see's that a nice profit was made on the house and finds someone who can borrow 80,000 to buy the house with the idea of selling it for a 100,000. This goes on until that 40,000 home has now sold for 200,000. Trouble is, it's still a 40,000 home but now nobody who needs a home can possibly borrow enough to buy it The lender can now clearly see whats happened and are not going to loan any momey unless somebody can guarantee their investment.
This has happen world wide and spilled over to every segment of the economy. However due to changing the way that they figured inflation, hardly anyone saw it coming.
Had a great discussion tonight about how to protect your money.Â* Talked about countiries where to invest and what else.Â* Bottomline, if you owe money, your doing great, if you have money you need to transfere it into metals.
Gold is on a downswing right now, I'm holding off buying any more until it hits around 850 or until it makes a move up again. Soon after the inauguration, it's going to go back up. Ammo continues to be a good investment, not to mention useful as well. T-Bills are in the tank already.
crushing debt.... inflation anyone?
