Big Deflation coming then even bigger inflation.

JonnyBravo

"Big Deflation coming then even bigger inflation. "

Does that average out as just a bit of inflation?
You should warn someone.

Ic1male

michaels wrote: »

Where is the inflation going to come from? At the moment the central banks really seem to be struggling to get the monetary stimulus in to the real economy - the funds are there but no one wants to spend and fiscal policy is being tightened everywhere.

They can not struggle to add currency to the supply. They do not even have to print it anymore they just type it in. QE used to be printing presses now they just add a zero on a keyboard and BOOM its x10.

The problem is revolving credit is contracting as people are paying off loans or defaulting. In the USA now more and more people are just walking away from their house because they couldnt sell it for half what thier mortgage is still outstanding.

Even though base money is going up outstanding revolving credit is falling faster.

This is why we are in a deflation right now and its going to become obvious soon.

But the thing is with adding vast quantities of currency to the base money supply this builds up energy.

This extra currency takes time to have an effect, but if they keep on the way they going we will need a wheelbarrow full of £10ers to buy a loaf of bread.

JonnyBravo

HtHoldings wrote: »

Many more are talking about it now, I am seeing articles in the news saying gold and silver always do well in deflation or inflation.
....
Its hard to understand why gold and silver do so well in the deflation we are going through now. Houses and pretty much everything else really suffer in deflation.

I presume you'd (rightly) mock anyone who said house prices always do well?
Yet you don't seem to grasp the similarities of how ludicrous a position it is when connected with gold?

Strange.

Unless......




you've got VESTED INTERESTS!!!!???


Gasp!

Ic1male

JonnyBravo wrote: »

I presume you'd (rightly) mock anyone who said house prices always do well?
Yet you don't seem to grasp the similarities of how ludicrous a position it is when connected with gold?

Strange.

Unless......




you've got VESTED INTERESTS!!!!???


Gasp!

Wonder if the same could be said for you? Um is that why you dont like gold and silver going up so much even in a deflation and house prices falling?

Instead of being so critical of others, why not add something meaningful to the debate?

gubdlog

michaels wrote: »

I guess the arguement then goes at some point banks will feel safely capitalised and look to increase profits and consumers and business will feel safe to spend again at which point the huge stock of currency will drive inflation. What evidence is there that there will be a change in sentiment so sudden that monetary tightening will not be an effective tool in managing any increase in demand before it becomes inflationary. After all in the real economy there is lots of spare capacity and labour which surely bears down on any price and wage increases?

This is the first time since the great depression that outstanding revolving credit is collapsing.

It has collapsed by over a trillion dollars.

The same mistakes are being repeated, just print your way out.


Every 30 - 40 years the world has an entirely new monetary system.

The one we are on now is 39 years old and getting older.

Very interesting that in 1971 it was only temporary unbacking by gold.

chewmylegoff

what can i do to hedge myself against these risks? let me guess, buy silver?

at least 8 precious metal sockies posting on this thread, probably all the same user, in yet another desperate attempt to ramp precious metals prices. when will you learn that posting in forums doesn't move market prices. give up, put the telly on and make a nice cup of tea.

chucky

chewmylegoff wrote: »

what can i do to hedge myself against these risks? let me guess, buy silver?

no buy gold off somebody on Ebay

FTBFun

I don't understand how this gold thing works. Do people hoard bars of gold bullion or do they just get a receipt saying "you have x amount of gold"?

As if its the latter, that's no different than a promissory note, like a tenner.

chewmylegoff

FTBFun wrote: »

I don't understand how this gold thing works. Do people hoard bars of gold bullion or do they just get a receipt saying "you have x amount of gold"?

As if its the latter, that's no different than a promissory note, like a tenner.

oh god. you don't know what you've done.

gubdlog

FTBFun wrote: »

I don't understand how this gold thing works. Do people hoard bars of gold bullion or do they just get a receipt saying "you have x amount of gold"?

As if its the latter, that's no different than a promissory note, like a tenner.

Very good point.

There are about 100 times more paper promissory notes for every ounce of real gold bullion in the world.

It a lot more for silver because real silver is getting depleted.

This is one of the reasons why real silver is going up at a faster rate than gold.