Comments on: Thank the Fed For Your Lack of Purchasing Power http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Sat, 11 Feb 2012 04:42:35 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: JMR 777 http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-50261 JMR 777 Wed, 27 Jan 2010 01:45:48 +0000 http://dailyreckoning.com/?p=18500#comment-50261 Looks like I overlooked comounded interest, but at a rate of 5% A DAY, a one dollar item would cost $4.87 after 1 month, $23.71 after 2 months, and $13,322.47 in 6 months. Try buying groceries under hyperinflation, see how much you can buy (if anyone is willing to take your paper fiat money) Also to consider, as the cost of goods go up during hyperinflation, a worker's paycheck does not! Looks like I overlooked comounded interest, but at a rate of 5% A DAY, a one dollar item would cost $4.87 after 1 month, $23.71 after 2 months, and $13,322.47 in 6 months. Try buying groceries under hyperinflation, see how much you can buy (if anyone is willing to take your paper fiat money)

Also to consider, as the cost of goods go up during hyperinflation, a worker’s paycheck does not!

]]> By: junior mogambo ranger 777 http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-50257 junior mogambo ranger 777 Wed, 27 Jan 2010 01:20:53 +0000 http://dailyreckoning.com/?p=18500#comment-50257 "Zimbabwe’s 231 million percent inflation rate works out to about 5 1/2 percent a day, so something that costs a buck today would be about $1.05 tomorrow. Scary." Actually, 231 million per cent inflation (calculated annually) divided by 365 days in a year equals 6328.7671 per cent a DAY- now That is scary. "Americans are also now realizing they can walk away from their debts, both credit card and mortgage…" Except in those US States that have recourse laws, meaning the borrower will be on the hook for the mortgage even if they walk, and Chapter 11 bankruptcy is Much tougher to get, due to the change in the bankruptcy laws. The walkaways are not painless or without risk in spite of what some may think. "...those who believe that the end game is gold; you can’t put gold between two pieces of bread to eat!" You can’t drink crude oil either but that doesn’t mean crude will ever be worthless. Besides, gold’s job is to act as a wealth preserver, enabling the holder of gold to preserve their wealth AND buy the last ticket out of hyper-inflation land to much more economically stable lands, and there still are some in this world in spite of the global meltdown. “Zimbabwe’s 231 million percent inflation rate works out to about 5 1/2 percent a day, so something that costs a buck today would be about $1.05 tomorrow. Scary.”

Actually, 231 million per cent inflation (calculated annually)
divided by 365 days in a year equals 6328.7671 per cent a DAY- now That is scary.
“Americans are also now realizing they can walk away from their debts, both credit card and mortgage…”

Except in those US States that have recourse laws, meaning the borrower will be on the hook for the mortgage even if they walk, and Chapter 11 bankruptcy is Much tougher to get, due to the change in the bankruptcy laws. The walkaways are not painless or without risk in spite of what some may think.

“…those who believe that the end game is gold; you can’t put gold between two pieces of bread to eat!”

You can’t drink crude oil either but that doesn’t mean crude will ever be worthless.
Besides, gold’s job is to act as a wealth preserver, enabling the holder of gold to preserve their wealth AND buy the last ticket out of hyper-inflation land to much more economically stable lands, and there still are some in this world in spite of the global meltdown.

]]> By: JMR Peter http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-49034 JMR Peter Tue, 19 Jan 2010 18:38:41 +0000 http://dailyreckoning.com/?p=18500#comment-49034 Correct link is http://www.bringbackmogambo.com/ Correct link is
http://www.bringbackmogambo.com/

]]> By: Silver Swords http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-48605 Silver Swords Sat, 16 Jan 2010 06:14:58 +0000 http://dailyreckoning.com/?p=18500#comment-48605 you can find him here.. http://radio.goldseek.com/ you can find him here.. http://radio.goldseek.com/

]]> By: JMR Ildi http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-47218 JMR Ildi Tue, 05 Jan 2010 08:56:35 +0000 http://dailyreckoning.com/?p=18500#comment-47218 To all Junior Mogambo Rangers, Please register to petition for a return of our Mighty Mogambo Guru at the web-site: BringbacktheMogambo.com To all Junior Mogambo Rangers,

Please register to petition for a return of our Mighty Mogambo Guru at the web-site:
BringbacktheMogambo.com

]]> By: Obama Bumma http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-45532 Obama Bumma Mon, 21 Dec 2009 01:54:32 +0000 http://dailyreckoning.com/?p=18500#comment-45532 Dear Mr. Daughty: Please come back and write you columns. I miss them very much! Dear Mr. Daughty:
Please come back and write you columns. I miss them very much!

]]> By: sierra http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-45349 sierra Sat, 19 Dec 2009 17:27:43 +0000 http://dailyreckoning.com/?p=18500#comment-45349 Americans are also now realizing they can walk away from their debts, both credit card and mortgage....and start a new life elsewhere in the galaxy of capitalism...without the heavily dependent consumer raking up escalating debt, the system we espouse is truly defunct. The capital flow world has to conjure up a new reason for "consumers" to consume idiotically.....for they now see that too many useless "things" transform into a useless life. And, that spells doom for the capitalists. And, a small warning to those who believe that the end game is gold; you can't put gold between two pieces of bread to eat! Americans are also now realizing they can walk away from their debts, both credit card and mortgage….and start a new life elsewhere in the galaxy of capitalism…without the heavily dependent consumer raking up escalating debt, the system we espouse is truly defunct.
The capital flow world has to conjure up a new reason for “consumers” to consume idiotically…..for they now see that too many useless “things” transform into a useless life.
And, that spells doom for the capitalists.
And, a small warning to those who believe that the end game is gold; you can’t put gold between two pieces of bread to eat!

]]> By: joe in boulder http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-45209 joe in boulder Fri, 18 Dec 2009 16:49:16 +0000 http://dailyreckoning.com/?p=18500#comment-45209 Oh mighty mogambo (OMG)Citi Group got a 30 billion tax break and sold common stock to pay back the tarp funds which lowered the value of the stocks the tax payers owned!!! take all of your bank because the banks are using it to continue our ruin!!!!! We are doomed. Oh magamo where are you!!!! Gold is down from $1240 to $1100 and the dollar is up against the weakened Euro and silver is still low at $17...buy!!!!!! And take your money away from the banksters!!!!! Oh mighty mogambo (OMG)Citi Group got a 30 billion tax break and sold common stock to pay back the tarp funds which lowered the value of the stocks the tax payers owned!!! take all of your bank because the banks are using it to continue our ruin!!!!! We are doomed. Oh magamo where are you!!!! Gold is down from $1240 to $1100 and the dollar is up against the weakened Euro and silver is still low at $17…buy!!!!!! And take your money away from the banksters!!!!!

]]> By: MrJimm http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-44334 MrJimm Sun, 13 Dec 2009 01:51:27 +0000 http://dailyreckoning.com/?p=18500#comment-44334 tempo dulu said Your printing money argument is fatuous, in my opinion. If it were true, inflation would rise strongly, but it hasn’t. In fact, inflation is well below limits considered to be dangerous. Tempo: Inflation depends both on how much money there is in circulation, and how fast people are spending it (called "monetary velocity"). You multiply the two together to get the real monetary picture, and an increase in one (money supply) can be compensated by a decrease in the other (velocity). In a recession, people hang on to their dollars for dear life, so velocity drops way down, and can negate a large growth in the money supply. But velocity can turn around overnight, and it always picks up when people start to suspect inflation kicking in (you spend your money quickly before prices can rise). In a real hyperinflation (Weimar Germany or Zimbabwe) people literally spent their money as fast as they could. Zimbabwe's 231 million percent inflation rate works out to about 5 1/2 percent a day, so something that costs a buck today would be about $1.05 tomorrow. Scary. tempo dulu said
Your printing money argument is fatuous, in my opinion. If it were true, inflation would rise strongly, but it hasn’t. In fact, inflation is well below limits considered to be dangerous.

Tempo: Inflation depends both on how much money there is in circulation, and how fast people are spending it (called “monetary velocity”). You multiply the two together to get the real monetary picture, and an increase in one (money supply) can be compensated by a decrease in the other (velocity).

In a recession, people hang on to their dollars for dear life, so velocity drops way down, and can negate a large growth in the money supply.

But velocity can turn around overnight, and it always picks up when people start to suspect inflation kicking in (you spend your money quickly before prices can rise).

In a real hyperinflation (Weimar Germany or Zimbabwe) people literally spent their money as fast as they could. Zimbabwe’s 231 million percent inflation rate works out to about 5 1/2 percent a day, so something that costs a buck today would be about $1.05 tomorrow. Scary.

]]> By: stephen wulff http://dailyreckoning.com/thank-the-fed-for-your-lack-of-purchasing-power/#comment-44172 stephen wulff Sat, 12 Dec 2009 01:02:02 +0000 http://dailyreckoning.com/?p=18500#comment-44172 the saturday night live of financial management. thanks for all your insights!!! the saturday night live of financial management. thanks for all your insights!!!

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