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View Full Version : Pray For Inflation -- It's Our Only Hope




Anti Federalist
04-10-2010, 11:11 AM
Clueless POS article, but at least, between the lines, the crooks are beginning to be honest about what they are up to.

:mad:

Pray For Inflation -- It's Our Only Hope

Posted Apr 09, 2010 12:30pm EDT by Peter Gorenstein

http://www.finance.yahoo.com/tech-ticker/pray-for-inflation----it%27s-our-only-hope-464142.html?tickers=^dji,^gspc,spy,dia,udn,tip

Everyone thinks the Fed's job is to fight inflation, but right now the Fed is actually doing everything it can to cause inflation.

(Far from "everybody" thinks that, you addled prat, the portion that do only believe it because of idiots like you repeating the lie in the media for so long - AF)

Why?

It part to help the economy get cranking again. Inflation provides an incentive for people to spend cash rather than saving it, because if they save it, the cash will lose value rapidly.

Inflation also helps solve another problem, though--our debt problem. The more inflation we have, the less our dollars will be worth. Because our debts are based on a specific number of dollars and not a specific value, the less our dollars are worth, the easier it will be for us to pay off our debts.

Imagine owing someone 100 Zimbabwe dollars at a time when the currency is collapsing. If you wait a week, the value of the Zimbabwe dollar will have collapsed, and you'll be able to pay off your 100 Zimbabwe-dollar debt with currency that is only worth half as much as it was the week before.

(So, here comes the truth, deliberate collapse of the currency, the wiping out of savings and reduction of living standards to third world levels. Been saying that was the plan for years now. Been called a kook because of it. Fucking bankster sluts. - AF)

The Fed can't admit that one reason it wants high inflation is to reduce the real burden of our debt, but you can bet that that's one of its objectives. What's more, says Nobel-winning economist Paul Krugman, inflation should be one of the Fed's objectives. Because that's how we've gotten out from under debt burdens in the past.

Here's Krugman:


So how did the U.S. government manage to pay off its [World War 2] wartime debt? Actually, it didn’t. At the end of 1946, the federal government owed $271 billion; by the end of 1956 that figure had risen slightly, to $274 billion. The ratio of debt to G.D.P. fell not because debt went down, but because G.D.P. went up, roughly doubling in dollar terms over the course of a decade.

In other words, after World War 2, we didn't "pay down" our debt. We grew into it.

And, importantly, this growth came from a combination of real growth AND inflation:


The rise in G.D.P. in dollar terms was almost equally the result of economic growth and inflation, with both real G.D.P. and the overall level of prices rising about 40 percent from 1946 to 1956

So inflation is an important tool in getting us out of this mess. It's painful and unfair--those who have been responsible and saved money will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford. But it's what the Fed is (quietly) aiming for.

(In other words, all you frugal, responsible, producing people, FOAD. - AF)

Mini-Me
04-10-2010, 11:19 AM
Aside from the fundamental economic and moral problems that inflation causes, this "strategy" is unsustainable: The currency itself is based on debt, so inflating the currency to decrease "real" debt will simultaneously increase nominal debt, and it becomes a wash...or counterproductive actually, considering interest. Unless I'm missing something crucial, the only way to "outgrow" all of this debt is to increase the GDP honestly through increased production. Playing money games will just change the name of the creditor who we owe the most real and nominal money to...and that's unlikely to make current creditors any happier than it makes savers, wage-earners, or investors being tricked by the low interest rates into malinvestment.

Zippyjuan
04-10-2010, 11:20 AM
Inflation would be counter-productive as far as trying to get the economy going. If prices are rising rapidly (and incomes are not) then people have less money to spend on things so they will consume even fewer total goods- not more.

Anti Federalist
04-10-2010, 11:21 AM
Aside from the fundamental economic and moral problems that inflation causes, this "strategy" is unsustainable: The currency itself is based on debt, so inflating the currency to decrease "real" debt will simultaneously increase nominal debt, and it becomes a wash...or counterproductive actually, considering interest. Unless I'm missing something crucial, the only way to "outgrow" all of this debt is to increase the GDP honestly through increased production. Playing money games will just change the name of the creditor who we owe the most real and nominal money to.

Silly prole, where did you get such ideas?

amy31416
04-10-2010, 11:23 AM
Bring it on bitches, bring it on...

Anything that strengthens black markets and trade is good in my book.

Philhelm
04-10-2010, 11:41 AM
Sheesh, what a bunch of silly conspiracy theorists, crying about inflation. You guys must be those kooky Paultards. ;)

Anti Federalist
04-10-2010, 01:41 PM
Bring it on bitches, bring it on...

Anything that strengthens black markets and trade is good in my book.

That's all that will be left.

Anti Federalist
04-11-2010, 04:51 PM
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LibForestPaul
04-11-2010, 06:50 PM
No, they can get out from debt by inflation. Because the value of your assets are stolen to pay for the debt. Thats why they are instituting capital controls. So you can not hide your assets from being stolen. I still am waiting for their plan on gold and silver. Or they assume only a fraction of a percent of people will be smart enough to store their savings in assets beyond the control of the International Banking Cartel.

tmosley
04-11-2010, 07:07 PM
Yeah, that's what we need, debt to disappear along with savings AND salaries.

Damn jackass.

Inflation
04-12-2010, 05:04 AM
Bring it on bitches, bring it on...

Anything that strengthens black markets and trade is good in my book.

The current atrophied, necrotized market itself is being purged and replaced with something more efficient.

Creative destruction, writ large.

Burn, baby, burn!

fatjohn
04-12-2010, 05:56 AM
Fuck yeah we need rampant inflation! It would cause a stampede into gold, making me rich and ron paul would be right, making him POTUS.

Zippyjuan
04-12-2010, 01:07 PM
Sorry, but rampant inflation will not make you rich. If you are lucky, your gold will rise at about the same rate as the prices of other things. Minus your transaction costs (buying and selling your gold) you would, in this example, be worse off in terms of purchasing power. Your income will buy you less so you are losing money there too (wages grow more slowly than prices) so you will be effectively paid less (it will take more hours working to buy what you need).

How many pounds of gold do you have to get rich off of? A few ounces will not make much difference for you. Do you have more than your annual income in gold now?

tmosley
04-12-2010, 01:33 PM
Sorry, but rampant inflation will not make you rich. If you are lucky, your gold will rise at about the same rate as the prices of other things. Minus your transaction costs (buying and selling your gold) you would, in this example, be worse off in terms of purchasing power. Your income will buy you less so you are losing money there too (wages grow more slowly than prices) so you will be effectively paid less (it will take more hours working to buy what you need).

How many pounds of gold do you have to get rich off of? A few ounces will not make much difference for you. Do you have more than your annual income in gold now?

Not really.

Gold keeps up with food--the fastest asset to inflate--during hyperinflation. As in Zimbabwe, 0.1 grams of gold buys a loaf of bread (about $3/loaf at the time), but you only need one or two of those a day, depending on the size of your family. Outside of food, you can buy up all the other hyperinflated assets for pennies, so long as you have access to power money. Therefore you will be "rich". If you are smart, and buy up those capital goods that produce products that are in demand (especially food), then you will find that you are able to create huge amounts of leverage without the use of debt. One ounce of gold quite conveniently turns 20 acres of raw land into a nice little farm.

There are plenty of people who will be fleeing, and will be happy to sell you the vast majority of their worldly possessions for a few oz of silver so they can make it out of the country and get started in a new, better life elsewhere as our forefathers did.

Certainly, your QoL may suffer, due to the bad general economic conditions, but you will be able to set yourself up as one of the elites for the next cycle. If you remain true to your free market principles during that time, maybe next time around will be different, and it will all be thanks to your power money. There will be hope that you can increase your standard of living manyfold during the coming return to free markets.

You can try to buy up these types of assets now, with fiat money, but there is still a lot of demand for them as people aren't fleeing yet, and you won't be able to use them immediately, so you will lose some to rust and decay. If you are holding paper money and waiting, well, you lose everything.

JeNNiF00F00
04-12-2010, 02:29 PM
http://www.diamondbackonline.com/opinion/guest-column-depressed-about-our-future-1.1312361

Not to hijack the thread here, but i was just reading this article, and then read the comments. One person even asked the question "Why do you want to get out of debt?". I don't even know what to say.