Comments on: Tales from a Bankrupt Economy http://dailyreckoning.com/tales-from-a-bankrupt-economy/ Economic News, Markets Commentary, Gold, Oil and Investing Strategies. Sun, 27 May 2012 07:34:04 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Gregory http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-10493 Gregory Thu, 04 Jun 2009 21:41:16 +0000 http://dailyreckoning.com/?p=16045#comment-10493 With a totally debt based money system defaltion is the major trend long term but in very short peroiods we could have inflation such as the 14% in the agricultural sector during the month of May.People will be shocked(this is a for sure thing that noboby envisions except me and I have not been wrong since april of 2006)-in the next within 13 months overwhelming deflation will hit us hard taking even gold down to $280 ounce.Silver still rises to $40 for a 7 to 1 ratio which just so happens to be the ratio in the earths crust thats left plus the already extracted and available supply known to date. price in the economy will deflate to the levels of currency plus barter systems in place-It is slowly in a little bit has began here in America too. With a totally debt based money system defaltion is the major trend long term but in very short peroiods we could have inflation such as the 14% in the agricultural sector during the month of May.People will be shocked(this is a for sure thing that noboby envisions except me and I have not been wrong since april of 2006)-in the next within 13 months overwhelming deflation will hit us hard taking even gold down to $280 ounce.Silver still rises to $40 for a 7 to 1 ratio which just so happens to be the ratio in the earths crust thats left plus the already extracted and available supply known to date. price in the economy will deflate to the levels of currency plus barter systems in place-It is slowly in a little bit has began here in America too.

]]> By: Alex Fabijanic http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-10224 Alex Fabijanic Tue, 02 Jun 2009 18:38:04 +0000 http://dailyreckoning.com/?p=16045#comment-10224 Bloomer, Falling wages, joblessness and historical low consumer confidence are symptoms of market correction. The term inflation refers to the amount of money and credit. Think of it as if market is braking while the governments are pressing the acceleration pedal. If the braking force is stronger, the resultant is still slowing down. But there is accelerating force present nevertheless, it just does not manifest itself in actual acceleration. My objection is to the use of the term inflation interchangeably with the price increase. Inflation is NOT the increase of prices. What is inflated is the amount of money and credit, not prices. Prices may (and usually do) rise because of inflation. But that does not necessarily have to happen (look at Japan). Prices may also rise for other reasons, so using the term "inflation" when referring to price increase is erroneous. Bloomer,

Falling wages, joblessness and historical low consumer confidence are symptoms of market correction. The term inflation refers to the amount of money and credit. Think of it as if market is braking while the governments are pressing the acceleration pedal. If the braking force is stronger, the resultant is still slowing down. But there is accelerating force present nevertheless, it just does not manifest itself in actual acceleration.

My objection is to the use of the term inflation interchangeably with the price increase. Inflation is NOT the increase of prices. What is inflated is the amount of money and credit, not prices. Prices may (and usually do) rise because of inflation. But that does not necessarily have to happen (look at Japan). Prices may also rise for other reasons, so using the term “inflation” when referring to price increase is erroneous.

]]> By: Bloomer http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-10133 Bloomer Tue, 02 Jun 2009 03:29:05 +0000 http://dailyreckoning.com/?p=16045#comment-10133 Alex The increase of money supply creates inflation when there are takers. When supply is greater then demand for goods and services, prices fall to reach a new price equilibium, wouldn't this cause (deflation)?. Falling wages, joblessness and historical low consumer confidence is in my view, not a climate for inflation. But then again I am not an economist just one of many like Bill Bonner and all the other Bears who saw this crisis coming. I welcome your opinion. Alex

The increase of money supply creates inflation when there are takers. When supply is greater then demand for goods and services, prices fall to reach a new price equilibium, wouldn’t this cause (deflation)?. Falling wages, joblessness and historical low consumer confidence is in my view, not a climate for inflation. But then again I am not an economist just one of many like Bill Bonner and all the other Bears who saw this crisis coming. I welcome your opinion.

]]> By: Alex Fabijanic http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-10073 Alex Fabijanic Mon, 01 Jun 2009 19:34:15 +0000 http://dailyreckoning.com/?p=16045#comment-10073 Bill, You seem to use terms inflation/deflation interchangeably for both money/credit amount and price levels. I think this creates a lot of confusion, especially for non-experts. As Henry Hazlitt <a href="http://mises.org/story/2914" rel="nofollow">wrote</a>: "Inflation, always and everywhere, is primarily caused by an increase in the supply of money and credit. In fact, inflation is the increase in the supply of money and credit" Prices are closely related to inflation/deflation because they are the symptom thereof. But they are not the same thing. Distinguishing clearly between the two would make your message much more accurate. Bill,

You seem to use terms inflation/deflation interchangeably for both money/credit amount and price levels. I think this creates a lot of confusion, especially for non-experts. As Henry Hazlitt wrote:

“Inflation, always and everywhere, is primarily caused by an increase in the supply of money and credit. In fact, inflation is the increase in the supply of money and credit”

Prices are closely related to inflation/deflation because they are the symptom thereof. But they are not the same thing. Distinguishing clearly between the two would make your message much more accurate.

]]> By: Bloomer http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-9994 Bloomer Mon, 01 Jun 2009 04:16:27 +0000 http://dailyreckoning.com/?p=16045#comment-9994 Once the Western World realizes that flooding the world with money won't take us out of this deflationary spiral, the next phrase in government intervention will be protectionism. Watch, as global trade wars will begin to spread as countries try to protect their flagging industries. The consensus amoungst economists is rising inflation. Everyone is betting on it. I still see deflation. Once the Western World realizes that flooding the world with money won’t take us out of this deflationary spiral, the next phrase in government intervention will be protectionism.

Watch, as global trade wars will begin to spread as countries try to protect their flagging industries. The consensus amoungst economists is rising inflation. Everyone is betting on it. I still see deflation.

]]> By: Dennis (EU) http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-9916 Dennis (EU) Sun, 31 May 2009 07:06:56 +0000 http://dailyreckoning.com/?p=16045#comment-9916 Politicians and CB's are just playing their last option: buying time for themselves and for us as they can only look shortterm; longer term they don't even want to think about. Bankrupt banks and big companies are just the predecessors of this crisis; wars will be in the end - indeed, basically to fight overpopulation. Politicians and CB’s are just playing their last option: buying time for themselves and for us as they can only look shortterm; longer term they don’t even want to think about.
Bankrupt banks and big companies are just the predecessors of this crisis; wars will be in the end – indeed, basically to fight overpopulation.

]]> By: Bors http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-9871 Bors Sat, 30 May 2009 23:03:08 +0000 http://dailyreckoning.com/?p=16045#comment-9871 "The war against capitalism seems to be going pretty well, in other words." Capitalism cannot survive overpopulation. “The war against capitalism seems to be going pretty well, in other words.” Capitalism cannot survive overpopulation.

]]> By: Bors http://dailyreckoning.com/tales-from-a-bankrupt-economy/#comment-9867 Bors Sat, 30 May 2009 21:34:58 +0000 http://dailyreckoning.com/?p=16045#comment-9867 We are an impatient species. We want instant gratification now. Even in the face of the economic and resources perfect storm we want things to be back to where they were even if they were terrible. Anything is better than having to change things so they would actually be beneficial to everyone. So invest and hoard to your hearts content. Life is just a bowl of cherries. Again no imagination. We are an impatient species. We want instant gratification now. Even in the face of the economic and resources perfect storm we want things to be back to where they were even if they were terrible. Anything is better than having to change things so they would actually be beneficial to everyone. So invest and hoard to your hearts content. Life is just a bowl of cherries. Again no imagination.

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