Does not compute - hyperinflation and S&P to 600

I have seen numerous calls for a major stock market decline with the S&P getting to 600 or even 400 sometime within the next year. Without QE's I can certainly see this happening, but can't wrap my head around it going down with all the QE's and unlimited funding the Fed has said they would inject.

How can it go down when they keep pumping money into the system? When hyperinflation hits (if it does), then you could assume that the stock market would skyrocket. So does it go down first and then skyrocket or does it just adjust slightly and then go up from here?

A true hyperinflation will see stocks go to hyperinflated numbers (and as such real valuations IMPOSSIBLE to gauge since the numbers will be going up so quickly that purchases of stocks will be based on currency destruction and speculation).

Generally speaking, hyperinflation is preceeded by a serious deflation. The hyperinflation is the result of policy to stave of said deflation. Confidence in the fiat erodes and people begin to speculate (rightfully so) that their paper will be much less valuable and begin to offload it for ANYTHING. Velocity of money skyrockets as paper becomes the hot potato du-jour.

Just as occured in Germany, hyperinflation will occur once the Fed and USG destroy INTERNATIONAL faith in the USD and foreign markets will reject the USD and send USD denominated valuations much, much higher.

Once Americans pick up on the enourmous revaluation of everything they own - the massive inflation will kick into high gear (HYPERinflation).

I do NOT think the Japanese style policy will result in a Japanese result.

One is a country with massive homeland savings denominated in the yen backed bonds the govt issues, the other is the world reserve currency (that is being shunned internationally) with a domestic populace with little to no savings.

At the highest levels of the USG, they know the two ways to keep the USD afloat are war and gold.

It seems the former has been chosen. This is EXTREMELY unsustainable (and self defeating).

You can thank your NAZI style politics.

JUST LIKE GERMANY, THE UNITED STATES MUST BE DESTROYED IN ORDER TO USHER IN THE NWO.

British banking and it's Zionist power bloc CANNOT have self sustaining manufacturing giants outside of it's control. They will move heaven and hell to destroy the US as it did Germany.

History rhymes.

The USA is Germany circa 1920-1940.

So what is the speculative timetable? Is it reasonable to assume this might take another ten years? If hyperinflation hits, it is going to be more diffcult for people to pass land and houses on to their children, because more people will fall into the 55% tax bracket and be forced to sell just to pay the taxes. It would seem that the only way around this is to start gifting stocks and houses to our children now, even if they are underage.

In said scenario you should not be moving real assets except when you MUST.

Preservation. Preservation. Preservation.

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Originally Posted by dinosaur

So what is the speculative timetable? Is it reasonable to assume this might take another ten years? If hyperinflation hits, it is going to be more diffcult for people to pass land and houses on to their children, because more people will fall into the 55% tax bracket and be forced to sell just to pay the taxes. It would seem that the only way around this is to start gifting stocks and houses to our children now, even if they are underage.

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Originally Posted by cbc58

I have seen numerous calls for a major stock market decline with the S&P getting to 600 or even 400 sometime within the next year. Without QE's I can certainly see this happening, but can't wrap my head around it going down with all the QE's and unlimited funding the Fed has said they would inject.
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Late this afternoon, a story appeared on the Dow Jones newswire service relating a speech given by Federal Reserve governor Jeremy Stein. In his prepared remarks he defends QE3 and seems to be strongly arguing for an additional new round of QE4.
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There is however a nice, dirty little secret that Mr. Stein, more than likely inadvertently, let out of the bag. Here is the takeaway quotation....

Research shows "Treasury buying is associated with increases in stock prices, which in turn can have wealth effects on consumption and investment".

There ya have conclusive proof that a major strategy of the Central Bank is to produce enough funny money to jam the stock market higher and by so doing, make consumers feel wealthier as they examine their 401K's and retirement portfolios as well as inducing businesses to expand based on a rising price for their stock.
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http://traderdannorcini.blogspot.com...l-singing.html

S&P/stock market won't crash if the Fed has anything to say about it.

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Originally Posted by Seraphim

A true hyperinflation will see stocks go to hyperinflated numbers (and as such real valuations IMPOSSIBLE to gauge since the numbers will be going up so quickly that purchases of stocks will be based on currency destruction and speculation).

Generally speaking, hyperinflation is preceeded by a serious deflation. The hyperinflation is the result of policy to stave of said deflation. Confidence in the fiat erodes and people begin to speculate (rightfully so) that their paper will be much less valuable and begin to offload it for ANYTHING. Velocity of money skyrockets as paper becomes the hot potato du-jour.

Just as occured in Germany, hyperinflation will occur once the Fed and USG destroy INTERNATIONAL faith in the USD and foreign markets will reject the USD and send USD denominated valuations much, much higher.

Once Americans pick up on the enourmous revaluation of everything they own - the massive inflation will kick into high gear (HYPERinflation).

I do NOT think the Japanese style policy will result in a Japanese result.

One is a country with massive homeland savings denominated in the yen backed bonds the govt issues, the other is the world reserve currency (that is being shunned internationally) with a domestic populace with little to no savings.

At the highest levels of the USG, they know the two ways to keep the USD afloat are war and gold.

It seems the former has been chosen. This is EXTREMELY unsustainable (and self defeating).

You can thank your NAZI style politics.

JUST LIKE GERMANY, THE UNITED STATES MUST BE DESTROYED IN ORDER TO USHER IN THE NWO.

British banking and it's Zionist power bloc CANNOT have self sustaining manufacturing giants outside of it's control. They will move heaven and hell to destroy the US as it did Germany.

History rhymes.

The USA is Germany circa 1920-1940.

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Of course its the zionists. I always knew they are somehow involved. Silly jews with their banks and controlling our country. All makes sense now.

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S&P/stock market won't crash if the Fed has anything to say about it.

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That's exactly why I can't see the market dropping like many say it will. It should, but they will just buy it and prop it up... until they either can't or won't be let to. I think there will certainly be some kind of drop very soon to get the attention of everyone.. but there is so much at stake they (to save their skin) can't let it fall. Absolutely every aspect of life will be effected and the average person has no idea it is as bad as it is.

Or perhaps the euro will finally blow up, the dollar will strengthen and we get more years of can kicking...

The conspiracy theorist in me says at some point it will all go kaboom and the elite will pick up everything for pennies or a pack of twinkies.

Your passive aggressive nonsense is very unmanly (and pathetic).

No where did I say JEWS.

A Jew is not a Zionist. The most devote Jews in the world are in diametric opposition to Zionism.

Most Zionists are actually Christian (misguided and philosophically STUNTED Christians).

Try again.

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Originally Posted by gwax23

Of course its the zionists. I always knew they are somehow involved. Silly jews with their banks and controlling our country. All makes sense now.

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Originally Posted by Seraphim

You're passive aggressive nonsense is very unmanly (and pathetic).

No where did I say JEWS.

A Jew is not a Zionist. The most devote Jews in the world are in diametric opposition to Zionism.

Most Zionists are actually Christian (misguided and philosophically STUNTED Christians).

Try again.

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Oh Please the rhetoric is exactly he same as antisemitic rants from the 30's. All your doing is simply swapping the word "jews" for "zionists" or "Judaism" with "Zionism."

You guys love to point out the supposed difference but you dont fool anyone.

Jews are part of some secret cabal and are controlling the banks to take over the worldz!!!

Oops sorry I mean. Those evil zionists are part of a secret cabal and are controlling the banks to take over the worldz!!! Now thats more like it. Definately no similarities there.

Even if I took what your saying at face value. That zionists are somehow behind the worlds economic woes it doesnt make what your saying any less ridiculous. Sure you can say your not antisemitic but you are without a doubt a complete and utter idiot if you believe that.

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Originally Posted by gwax23

Oh Please the rhetoric is exactly he same as antisemitic rants from the 30's. All your doing is simply swapping the word "jews" for "zionists" or "Judaism" with "Zionism."

You guys love to point out the supposed difference and try to make yourself appear smarter in the process but you dont fool anyone. Jews are part of some secret cabal and are controlling the banks to take over the worldz!!!

Oops sorry I mean. Those evil zionists are part of a cabal and are controlling the banks to take over the worldz!!! Now thats more like it. Definately no similarities there.

Even if I took what your saying at face value. That zionists are somehow behind the worlds economic woes it doesnt make what your saying any less ridiculous. Sure you can say your not antisemitic but you are without a doubt a complete and utter idiot if you believe that.

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Trolls troll. This doesn't address Seraphim at all.

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Originally Posted by gwax23

Oh Please the rhetoric is exactly he same as antisemitic rants from the 30's. All your doing is simply swapping the word "jews" for "zionists" or "Judaism" with "Zionism."

You guys love to point out the supposed difference and try to make yourself appear smarter in the process but you dont fool anyone. Jews are part of some secret cabal and are controlling the banks to take over the worldz!!!

Oops sorry I mean. Those evil zionists are part of a cabal and are controlling the banks to take over the worldz!!! Now thats more like it. Definately no similarities there.

Even if I took what your saying at face value. That zionists are somehow behind the worlds economic woes it doesnt make what your saying any less ridiculous. Sure you can say your not antisemitic but you are without a doubt a complete and utter idiot if you believe that.

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You really need to calm down.

The FED is only propping up the market letting the extremely wealthy cash out of the investment market. That is why quantitative easing is going to bail out mortgage backed securities. This was where the $16 trillion found in the last FED audit went. Who knows how much has actually been paid out? It is not going into any manufacturing to boost employment etc. It is going to cash out wealthy investors that got in too deep with unsecured investments.... keeping bankers out of court.

The central banks are all buying up unprecedented amounts of gold while dumping Treasury Notes like hot potatoes for whatever they can get on the market in South America (real estate, PM's stocks etc) to avoid attention. Why would central banks invest in gold, commodities and real estate as opposed to more securities and currency?

At this point all investors in the world have washed their hands of US Treasuries yet the government is borrowing and bailing out at full steam. The FED is printing currency out of thin air and buying them all as the lender of last resort. Like I said, the big money is moving out of our system. FOLLOW THE MONEY

To put it in layman's terms. The Titanic has a gapping 165ft long hole in the side and is sinking. The wealthy are grabbing everything they can and getting into the lifeboats. The lower classes are being fed disinformation and told bailing with teacups is going to save the ship. They are told it is an optical allusion the ship is sinking. We are told the FED and government have big plans to save the ship but the wealthy keep loading up in lifeboats with all their ill gotten gains. What's wrong with this picture?

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Originally Posted by Cody1

You really need to calm down.

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No

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Originally Posted by ClydeCoulter

Trolls troll. This doesn't address Seraphim at all.

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Your right. The crazy conspiracy theorists dont make our movement look bad, its the people that defend them.

https://blog.shareaholic.com/wp-cont...aphone-guy.jpg

I cannot even figure out howJews figure in with the S&P, I feel more stupid by the day sometimes ....

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Originally Posted by oyarde

I cannot even figure out howJews figure in with the S&P, I feel more stupid by the day sometimes ....

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Thats what Im trying to say yet somehow Im the troll.

So, back on topic, the idea that hyperinflation will destroy the stock market is absolutely asinine, but I think most people know that.

The stock market does not care what happens to the dollar. It's mostly irrelevant, since when you invest in a business you're trading dollars for the productive capacity of that business. If in the meantime the dollar falls in value, or we start using marbles and buckskins and currency, the stock market won't care. A productive business in dollars is just as productive in gold, or silver, or buckskins and marbles.

Companies are not only a bet against currency, but also a bet on their productivity. Fact is, people will always want to buy goods and services regardless of what the currency does or what the currency even is, so a bet on a company is, in my opinion, the best bet one can make.

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The stock market does not care what happens to the dollar. It's mostly irrelevant, since when you invest in a business you're trading dollars for the productive capacity of that business. If in the meantime the dollar falls in value, or we start using marbles and buckskins and currency, the stock market won't care. A productive business in dollars is just as productive in gold, or silver, or buckskins and marbles.

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???

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Originally Posted by Jordan

So, back on topic, the idea that hyperinflation will destroy the stock market is absolutely asinine, but I think most people know that.

The stock market does not care what happens to the dollar. It's mostly irrelevant, since when you invest in a business you're trading dollars for the productive capacity of that business. If in the meantime the dollar falls in value, or we start using marbles and buckskins and currency, the stock market won't care. A productive business in dollars is just as productive in gold, or silver, or buckskins and marbles.

Companies are not only a bet against currency, but also a bet on their productivity. Fact is, people will always want to buy goods and services regardless of what the currency does or what the currency even is, so a bet on a company is, in my opinion, the best bet one can make.

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all business operates in dollars. all consumers buy their goods/services with dollars.
if you are buying goods with beaver skins next year that is because their was a collapse of the dollar. no business survives when their accounts are worthless and people can't buy anything because their accounts are worthless.

Jordan is correct here. Productivity finds ways to be paid, regardless of the environment. That's not to say that a dollar collapse would not be a nuissance, but valuable productivity goes on.

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Originally Posted by torchbearer

all business operates in dollars. all consumers buy their goods/services with dollars.
if you are buying goods with beaver skins next year that is because their was a collapse of the dollar. no business survives when their accounts are worthless and people can't buy anything because their accounts are worthless.

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Originally Posted by Seraphim

Jordan is correct here. Productivity finds ways to be paid, regardless of the environment. That's not to say that a dollar collapse would not be a nuissance, but valuable productivity goes on.

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I don't go to work, when I don't get paid. I can't stay in my home when my rent isn't paid.
the crash of the dollar is going to zero out a lot of "assets" really quick.
Yes, I can still swing a hammer or fix a computer. I can still be productive.
But the 3 cans of soup you gave me to fix your computer won't pay my rent or put fuel in my truck.
the disruption will be huge. add to this the riots, and there's your stock market.

If the dollar crashes, do you truly believe your LL will want dollars? I think not. Same logic applies, he will want something that is of adequate value.

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Originally Posted by torchbearer

I don't go to work, when I don't get paid. I can't stay in my home when my rent isn't paid.
the crash of the dollar is going to zero out a lot of "assets" really quick.
Yes, that doesn't mean I can't still swing a hammer or fix a computer. I can still be productive.
But the 3 cans of soup you gave me to fix you computer won't pay my rent or put fuel in my truck.
the disruption will be huge. add is the riots, and there's you stock market.

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Originally Posted by Seraphim

If the dollar crashes, do you truly believe your LL will want dollars? I think not. Same logic applies, he will want something that is of adequate value.

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which I won't have, nor anyone else around me. that is the problem. all people have is useless junk to barter with.
If had a micro-brew, or some food stock, or solar panels... something like that, my LL would barter.. but that would only be for a while. until I run out of barter.
what does my boss have to barter with? he has a gun safe full of dollars.
how are you going to redeem your stocks? they are denoted in dollars too. wait for the new amero? don't think the conversion rate would be figured in?
if you are playing in dollars, you get hosed.

this is one funny thread... busted a gut reading some of these responses. 3 cans of soup... great. would you take 12 marbles and some super glue? wonder how many shares of ibm that would translate into...

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Originally Posted by cbc58

this is one funny thread... busted a gut reading some of these responses. 3 cans of soup... great. would you take 12 marbles and some super glue? wonder how many shares of ibm that would translate into...

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I actually do computer work for barter. I prefer it to cash.
though usually an ounce of silver or some return services is what I require in barter, but i would take a hog or some chickens.

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Originally Posted by cbc58

???

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If a company can turn $100 into $25 of annual cash flows, it can turn 100 turtles into 25 turtles if turtles become the new currency of the land. That's why I don't care about what the best currency is, it's irrelevant.

If you have skills then you most certainly have something of adequate value.

If you have no commodities, but have skills - the commodities will come. If your heart beats and you are willing to work - markets go on.

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Originally Posted by torchbearer

which I won't have, nor anyone else around me. that is the problem. all people have is useless junk to barter with.
If had a micro-brew, or some food stock, or solar panels... something like that, my LL would barter.. but that would only be for a while. until I run out of barter.
what does my boss have to barter with? he has a gun safe full of dollars.
how are you going to redeem your stocks? they are denoted in dollars too. wait for the new amero? don't think the conversion rate would be figured in?
if you are playing in dollars, you get hosed.

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Folks interested in the thread subject might find the following of interest:

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Originally Posted by swissaustrian on pmbug.com

The best book on inflation imho is an Austrian case study on the Weimar hyperinflation:
Constantino Bresciani Turroni - The Economics of Inflation

Summary from mises.org:

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As an Austrian study of hyperinflation, this study has never been surpassed. The same is true of the detailed examination of the rise of hyperinflation in German in the interwar period: there is not anything more authoritative.

It is a huge study, 466 pages, with a fantastic amount of data and statistical analytics. But the narrative too is very exciting and infused with a thoroughly Austrian understanding of the impact of dramatic monetary expansion. It affects not only prices but also capital structures, political events, and the structure of society itself. Hitler did not emerge in a vacuum. Bresciani-Turroni covers the essential prehistory of a world-wide calamity. This volume is thorough, authoritative, and riveting in every respect - the achievement of a lifetime to last the ages.

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http://mises.org/resources/3125

The whole book as a PDF can be found here (20 MB): http://mises.org/books/economicsofinflation.pdf
http://mises.org/store//Assets/ProductImages/SS236.jpg

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If a company can turn $100 into $25 of annual cash flows, it can turn 100 turtles into 25 turtles if turtles become the new currency of the land. That's why I don't care about what the best currency is, it's irrelevant.

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If anyone wants to discuss the subject of this thread in a real world scenario - I'd like to get their thoughts. Self-proclaimed turtle gurus aside.