Hyperinflation Inevitable for USA

[Mellowman2112]

The ruiner: What makes you think that all those billions of people in China cant CONSUME more than we do? Your premise that the world needs us proflagate US consumers to maintain afloat is weak. So the world needs us to continue to borrow money to consume to stay afloat? That is your argument?

 

[mame]

How does reducing your purchasing power help the economy? Reducing your incentive to save helps the economy?

Yes, reducing incentive to save absolutely helps the economy right now. The biggest obstacle in the face of our current recovery is the lack of investment taking place... Inflation compels investors to stop holding their money and actually invest. High investment is associated extremely closely with high employment, low investment with low employment (high unemployment).

So long as the unemployment rate does not go below the NAIRU (non-accelerating inflation rate of unemployment) than we are not in danger of accelerated inflation... So basically, inflationary policies are okay until a certain point. In the U.S. our NAIRU is at ~6% unemployment. So inflationary policies can lower unemployment without triggering accelerated inflation until you reach 6%; At that point, any further inflationary policies accelerate inflation exponentially. Our current unemployment rate is 8.8%, over the next year or two the unemployment rate will likely continue to drop slowly and as long as Bernanke's QE2 doesn't make unemployment drop below 6% (which is pretty unlikely) accelerated inflation will not occur in the U.S. as a result.

 

[Mellowman2112]

I dont have to always be right. But dont you think that an environment that lent itself to investment would be a good thing? Less government borrowing and competition for capital would be a good thing for the economy. I can agree with your point above seems to make sense. IF it were moderate. But does drastically increasing the money supply fall within your parameters? Look what this article has to say about the money suply.

M3, which is no longer published by the US Federal Reserve, is the broadest measure of money supply. It includes M2, as well as certain accounts held by banks and thrift institutions (including balances in money market mutual funds held by institutional investors). Since March 2006, M3b, a reconstructed version of M3, has grown by nearly $4 trillion, from approximately $10.5 trillion to about $14.2 trillion. To put this in perspective, total M3 in 1971, when the US cut the dollar's link to gold, was less than $800 billion. The current annualized rate of increase is now about 20%. Since the classical definition of inflation is an increase in money supply that leads to an increase in goods and services, the price increases we are now experiencing are destined to accelerate. Given these inflation realities, portfolios need to be rebalanced to ensure that purchasing power is preserved. As precious metals are proven hedges for inflation, portfolio holdings should be rebalanced to ensure adequate allocations are held.


Read more: http://advisoranalyst.com/glablog/2008/05/07/97/#ixzz1JpVJrd00​

 

[NoDrama]

Don't forget, the "Official" numbers do not reflect reality.

If all the unemployed people fell off the unemployment benefits roles and no one was able to find a job, unemployment would be at 0%, even if 40 million people can't get a job. Once you can no longer collect unemployment benefits, you are no longer counted as unemployed.

 

[The Ruiner]

The ruiner: What makes you think that all those billions of people in China cant CONSUME more than we do? Your premise that the world needs us proflagate US consumers to maintain afloat is weak. So the world needs us to continue to borrow money to consume to stay afloat? That is your argument?

We arent just borrowing money,dude. We consume, like rabid animals to flesh...that's what the world needs because there is no other market available for their goods. Say we were taken off-line, the producers of the goods can't just slash the prices of things miraculously just so the average chinese/indian can afford them...They would lose money. And we are talking about the WORLD economy: OPEC, China, Mexico, Canada, ASEAN countries, et al...

China has struggled for years trying to balance the scales in the favor of their own people...to nominal success. And that's not an accident, its just real economics playing out.

 

[budsmoker87]

Friedman is antidrugwar and for legalising drugs so how conservative
was he really?

.

here is the problem with these arbitrary, meaningless terms...

(conservative/liberal)


anit-drug war demonstrates fiscal conservation, so from one perspective, this IS CONSERVATIVE...

but from another perspective, the drug war=conservative because "it keeps drugs off the street" (which it absolutely doesn't)


"conservative" vs "liberal" is a fucking pointless conversation...


now if you want to talk "freedom" vs "tyrants running around spending OUR money like THIEVES" then you've got a good framework discussion open to debate

 

[Mellowman2112]

Thank you budsmoker. IS it really open to debate whether or not we are being scammed and fucked over ? Who wants to take the side that everything is cheesy and that the constitution hasnt been used to line Cheneys and Obama's bird cage? I am ready to debate hehe.

 

[beardo]

Dude...if all of those banks went bust, our country would have gone down in a blaze. There would be MASS panic and hysteria. BofA was originally called BANK OF CHINA...Wells Fargo was one of the strongest banks at the time. But, the base reality is that the world cannot have Americans penniless, or put under Martial Law...because our economy fuels the world. Even if people are moving their assets to other countries, those countries will still be producing goods making their way to America...its a symbiotic relationship.

If those companies went under there would be absolutely NO INVESTOR CONFIDENCE in this country...Everyone with any remaining assets here would have pulled out immediately and we would be stuck...but it cant and it wont happen....because as fucked up as it is, the WORLD needs us to continue business as usual. There is no replacement for our domestic market, and elites around the globe know this...Imagine that OPEC lost its main customer, China loses its main customer...fucking total destruction across the board. It's strategially infeasible for ANYONE to see America go completely in the gutter. No matter how bad things seem, we are still WAY better off than many across the world...

Lunch time folks...PEACE.

I don't think you understand that investors don't matter and neither do banks or the economy, it will be about resources. money doesn't matter, the military does and so doesn't fuel and water and food, when they implode the economy those will be the things that matter. the elites don't care about jobs or money or product sales.

 

[The Ruiner]

I don't think you understand that investors don't matter and neither do banks or the economy, it will be about resources. money doesn't matter, the military does and so doesn't fuel and water and food, when they implode the economy those will be the things that matter. the elites don't care about jobs or money or product sales.

But they care about fueling the machine that makes them money... I have been beating the resource war drum for nearly 10 years now, and no one listened then, until it started to affect them. Investors cant butcher their cash cow, plain and simple. Our military is the mechanism that provides the ways and means that elites and regular jack-offs like you and me thrive. Resources secure our way of life, which secures THEIR way of life...No elite is unreachable, they cannot have an entire world aiming guns at their heads, thus they cant just piss off millions of people by collapsing their economy and getting away with it....Thus, the massive mediation effort to keep our economy afloat. Whether you understand or agree with how its being done, its working.

 

[beardo]

But they care about fueling the machine that makes them money... I have been beating the resource war drum for nearly 10 years now, and no one listened then, until it started to affect them. Investors cant butcher their cash cow, plain and simple. Our military is the mechanism that provides the ways and means that elites and regular jack-offs like you and me thrive. Resources secure our way of life, which secures THEIR way of life...No elite is unreachable, they cannot have an entire world aiming guns at their heads, thus they cant just piss off millions of people by collapsing their economy and getting away with it....Thus, the massive mediation effort to keep our economy afloat. Whether you understand or agree with how its being done, its working.

I think you are mistaken.
They don't care about 'money' because it is not real and they have a infinite supply. they no longer care about creating wealth because they already control the wealth and we are consumers of their resources, see the Georgia guide stones for an idea of what a 'sustainable' population would be.

 

[beardo]

inflation is already rising and to see hyperinflation is not out of the question although I wouldn't expect it for a couple more years

 

[mame]

I'm starting to feel like this debate turned into a "it depends on who you believe" type of argument. I'm like, "well the official numbers blah blah blah" and busting out textbooks and then you guys are like, "that's the official numbers what about these numbers? what about my food bill? We're getting fucked here and shit is only gonna get worse!"

I'm seriously going to be revisiting this thread in a couple years(as it seems that's the only way we'll settle this)... I'm locking in my answer... We wont see hyperinflation - maybe moderate inflation (or maybe a repeat of the early 80's with 13% inflation) but certainly nothing even close to hyperinflation.

I hope to see you guys then.

 

[beardo]

We arent just borrowing money,dude. We consume, like rabid animals to flesh...that's what the world needs because there is no other market available for their goods. Say we were taken off-line, the producers of the goods can't just slash the prices of things miraculously just so the average chinese/indian can afford them...They would lose money. And we are talking about the WORLD economy: OPEC, China, Mexico, Canada, ASEAN countries, et al...

China has struggled for years trying to balance the scales in the favor of their own people...to nominal success. And that's not an accident, its just real economics playing out.

I don't think you understand that investors don't matter and neither do banks or the economy, it will be about resources. money doesn't matter, the military does and so doesn't fuel and water and food, when they implode the economy those will be the things that matter. the elites don't care about jobs or money or product sales.

But they care about fueling the machine that makes them money... I have been beating the resource war drum for nearly 10 years now, and no one listened then, until it started to affect them. Investors cant butcher their cash cow, plain and simple. Our military is the mechanism that provides the ways and means that elites and regular jack-offs like you and me thrive. Resources secure our way of life, which secures THEIR way of life...No elite is unreachable, they cannot have an entire world aiming guns at their heads, thus they cant just piss off millions of people by collapsing their economy and getting away with it....Thus, the massive mediation effort to keep our economy afloat. Whether you understand or agree with how its being done, its working.

I think you are mistaken.
They don't care about 'money' because it is not real and they have a infinite supply. they no longer care about creating wealth because they already control the wealth and we are consumers of their resources, see the Georgia guide stones for an idea of what a 'sustainable' population would be.

Anyone still on this thread?

 

[NoDrama]

Yep, hey you know we had 13% inflation only in 1980, by 1981 it had dropped precipitously, by early 1983 it was at 3.6%. Interest rates were great back then, you could live off the interest in a savings account.

 

[NewGrowth]

I assume the dollar will lose status as world reserve currency. As a result the fed will begin the process of monetizing the massive amounts of continually accumulating debt. This will eventually result in hyperinflation. I think it's more likely we will begin the process of converting our dollars to SDR or he new world reserve currency before hyperinflation occurs. The new fiat currency may last another 20 years or more. The main point is Americans not vested in gold will probably lose most of their wealth as their dollars are converted. Also the fed will no longer be able to print money at will therefore te federal government will before forced to cut all entitlement spending. This will mean quite the downturn for our economy and way of life no matter how you look at it. I would prepared with food, water, and guns. If you are able invest money into Chinese currency, gold and silver.

 

[Mellowman2112]

I don't think you understand that investors don't matter and neither do banks or the economy, it will be about resources. money doesn't matter, the military does and so doesn't fuel and water and food, when they implode the economy those will be the things that matter. the elites don't care about jobs or money or product sales.

Thats what I have been trying to get across, thanks for helping.

 

[beardo]

Thats what I have been trying to get across, thanks for helping.

Yeah and I was trying to see if the other side had a response but I guess not

 

[budlover13]

I believe we'll see it within the next few(2-5?) years. And I think it will be worse than the Great Depression. I'm thinking on the scale of Yugoslavia in the mid to late ninties. The problem I see is not a lack of food or water, humans are resourceful and could have community gardens, livestaock, etc. The problem is, we aren't that kind of society anymore. We lock our doors because even when the economy is GREAT and almost everyone has access to the basics of life, there are a LOT of people out there that don't respect the sanctity of a man's home or even human life for that matter. These people are commonly known as gangsters, but it runs much deeper than that.

Gangsters are just the ones that society points out every day in the media. The others (and I generalize as society has done with gangsters b/c I know a few that are not violent, they just like the life and I can't understand it) are known as bankers, lawyers, politicians, millionaires, etc. There are MANY people in this country and world that could really care less whether you or I live or die. If they are hungry, they aren't going to plant a garden or trade for a cow. They're going to try to come and take MINE. It's easier, faster, and more profitable. Yes, I said TRY. I'll do my best to defend my family. They might win in the end, but it's going to cost them dearly.

Anyway, THAT is what I see as being the biggest problem. While people DO starve or die of illness during financially hard times, the world hasn't seen anything like the show that's going to go down here in the US. I'm not HIGHLY educated, but am not stupid either. My opinions are just the stoned observations of an everyday Joe in the Engineering field (when there's work).

 

[mame]

I now have something more to add to the discussion.

Gold prices... I found this interesting bit here:

Gold rose to $825.50 per ounce on Jan. 21, 1980, which is $2,211.65 in today's dollars, according to the Minneapolis Fed Calculator.

So gold has been at higher prices... Just so happens that was in 1980, when we faced 13% core inflation rates. It is becoming more and more clear to me that we may face a similar episode as back then(so, no... hyperinflation isn't inevitable)...

I thought this would be interesting - especially to you NoDrama, what'ya think?

 

[NoDrama]

The price of gold normally increases when interest rates are low.

In 1971 gold was $35 an ounce, by 1980 it topped out at $850, if gold does what it did back then, $6000 an ounce will be the price.

The price of gold was $20 an ounce for 100 years and only varied by 11 cents highest to lowest. In 1933 FDR stole everyones gold and revalued it to $35 an ounce. In 1971 Nixon Removed the gold backing and we have been pure fiat ever since. [video=youtube;iRzr1QU6K1o]http://www.youtube.com/watch?v=iRzr1QU6K1o[/video]

Silver has a even better story.

Gold and Silver are controlled by large financials through the use of Naked Short contracts. JPM Shorts more silver than is even mined in a year.

A former Goldman sachs metals trader fessed up that they manipulate the prices of PM's....http://en.wikipedia.org/wiki/Andrew_Maguire_%28whistleblower%29

[video=youtube;yLxoeLqQMlw]http://www.youtube.com/watch?v=yLxoeLqQMlw[/video]



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