This page has been archived and commenting is disabled.
Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade
Whether one believes in inflation or deflation, one thing is certain: in many ways the current US experience finds numerous parallels to what has been happening in Japan for not one but two decades. While major economic, sociological and financial differences do exist, the key issue remains each respective central bank's failed attempts to reflate its economy. While long a mainstay of Japan, if the first failed version of our own QE, which pumped $1.7 trillion of new liquidity into the system, is any indication, future comparable efforts by our own Fed will be met with the same outcome (and hopefully with the same political result: the half life of an average Japanese prime minister is 6 months - if only our career politicos knew their tenure in office could be capped at half a year...). There is of course the "tipping point" optionality discussed earlier by Ambrose Evans-Pritchard, when comparing the hyperinflationary timeline during the Weimar republic, which noted that it took just a few months for the economy to slide from a period of price stability to outright hyperinflation. Either way, for an ironic look at the Japanese deflation scenario, targeted more at novices although everyone will likely learning something from it, we present the following informative clip from, ironically, the National Inflation Association, which asks whether Japan is a blueprint for America's imminent lost decade(s).
»
- 17741 reads
- Printer-friendly version
- Send to friend
- advertisements -
We're for sure going to lose a decade at least, but it won't be Japan-style.
I'm thinking tango and empanada-style, circa 1997-1999. Unlike Prince, the party's ooover.
This article about Goldman Sachs is great!!!!
>>>>>>>>>>>>>>>
Why founding a three-person startup with zero revenue is better than working for Goldman Sachs.
<<<<<<<<<<<<<<
"... go out and write your own story, or you’ll just be a character in someone else’s..." what a great article!!!
It would appear some juvenile is running through the thread with a can of spray paint. Go eat your cereal before it gets soggy little junk warrior. Anarchists - so cute when they're little...
Well we already have, actually, given the Dow/Gold ratio.
We're working on the second as I type this.
We're just making it look easy ;)
Now why would you want to go and scare people like that? Denial is a way of life in America.
why not, it's maybe worse than you think. What the fuck we produce the world needs except arms? You want your banks prosper, sucking money from lower classes, your service industry trive on money never made, sorry, they made it already and the last bastion of prosperity is trading - shit back and forth and it's over! Now is the question how to survive? Don't give me those fucken charts to support further expansion of US economy based on somebody's else money, that's past, lets look what we are facing now. Lets /sarcasm/build more houses, financed by who knows who, and get all those interest rate profits for the banks, everybody in the world wants to get to US to get pedicure or manicure, they will travel thousands of miles to do it.
If you're a consumer or small business caught between deflation and inflation, it doesn't take very much of either to kill you. It doesn't need to become "hyper"inflation if your income, assets and employment prospects are deflating. You burn through all your savings, credit and then join the ranks of food stamp recipients. Similarly for a small business, margins get savaged fast, forcing cutbacks and cost-savings measures that feed on themselves.
That's why the current situation is so precarious. The Fed can no longer afford the luxury of "Print, baby, Print!". That would quickly inflate the economy into oblivion.
I completely agree either will kill the economy. I believe that deflation will be better for the future. It will teach people to become responsible and not become so complacent. Any sort of inflation will further increase the gap bettween the rich and the poor and rewards bad behavior.
Agree Caviar. There is no way out.
The reason Japan has survived, is that the debt is held by the Japanese people and Japan was still able to export its way since the world had been stable.
This time around, if deflation sets in, the US can not export its way out, as the whole world is suffering. If Hyperinflation gets a foothold, all bets are off within months.
Either way, much suffering.
Agri-land, gold & silver coins, guns & ammo, spam and dry food for those who can.
The fed will only print if the banksters want them to. So there are 500 trillion(?) in derivatives floating around out there mostly with the big US banks, and a whole lot of them are interest rate swaps. If inflation drives up the cost of holding cash (and thus interest rates) do the banksters collect or pay? If they pay, the fed won't print until it's to late to stop a deflationary spiral, because the banksters will wanna make sure that everyone can see there will be no inflation first. If it goes that way then the gov. might just decide to handle the creation of 'money' itself, then watch out, all bets off. My 2 cents.
So who is on the other side of these economy killing bets? Oh, yeah, ultimately the U.S. taxpayer.
And the Government already prints the money, creates or supports the creation of credit. About a dozen boys in New York and their conspirators in Washington are in charge of the printing press.
Without the Fed buying Treasuries through other Central Banks and the Primary Dealers every Treasury auction would fail.
Dinosaurs were too big and they failed. These financial monsters are too big and they must die. Or the country is lost.
The fed has not printed out in the open to help the government yet, only to help the banks. If they (the fed) are buying treasuries through whoever, they are not doing it in the open, so I'm not sure that government does have control of money supply at all. If they did I think these guys would have everyone in a new house with new appliances and cars by the next election cycle, and the dollars time would be numbered in days instead of months/years. As for the solution to the problem of the fed having control of the printing press (and their real job being to transfer all of the wealth to their masters), I don't know. Audit them, charge them, then hang them if you want, but just turning over the keys of money creation is not the answer (especially not to the IMF or BIS or any of that lot). The obvious answer is a gold standard currency, but first the doors to the US gold vaults need to be opened to make sure that there is gold left still, because if there isn't then its the same guys in charge of currency creation again.
++
Speaking of; do you think there is gold in the vaults?.. I don't. Otherwise, we would have seen an open and public verification of it.
I agree.
Mudduck
Wink, wink, nod, nod, of course the Fed is NOT playing patty cake with other Central Banks and Primary Dealers. Otherwise they would be happy to declare it... No ???
To limit panic selling of paper assets the Fed won't even deny what they are doing.
The ultimate Fed solution is to bust up the big banks. More government and more banking crooks is the last thing this country needs.
Until writedowns occur in the used-toilet paper assets with the attendant haircuts in liabilities and ultimately the bankrupties and break-up of the smart-ass TBTF crowd this country is sunk.
There is no possible GDP growth rate to support the money printing and debt creation that has occurred (is occurring) to paper over the worthless TP held by the TBTF and now the Fed.
Our national balance sheet needs a haircut in the $15-20 trillion dollar range. Without the haircut this nation is doomed to beggar status soon.
http://www.youtube.com/watch?v=SrJZRBf_Y5s
Watched most of the video. There is job's job's to be had in Japan unlike here. Me think's that is the difference. Credit or Debit? Credit PLEASE.
I too bailed out after 2/3 as the point was made. He did not however refute any of the points made in the NIA video. And the cultural differences are of course stark - we ain't "turning Japanese" anytime soon if Peggy Joseph has anything to say about it (and she currently still does). Credit PLEASE - it's still the American Way (for the sub 600 FICO).
- how does this video grab ya??
http://www.youtube.com/watch?v=sDxUjMOKROU&feature=related
OK - so our unfunded liabilities + debt is (slightly?) less than $80 trillion dollars and our Debt to GDP isn't really 560%. Time to party like its 1999 again?
I've seen videos from NIA periodically from Zero Hedge. I didn't even know they pumped stocks. I thought they just pumped gold. Just like Peter Schiff, Eric Sprott, et al. It is fine to attack the messenger, but I am more interested in attacking the message. $1.4 trillion budget deficit this year? 9.6% unemployment? Pension deficits of 2-3 Trillion. Plan to "cram down" agency mortgage rates & debts with the public picking up the tab?
God, things are going so well. Forget gold as the NIA guy pumps (although in a poorly publicized fashion) companies that pay him. Got to get more 10 year US Bonds before Benny brings the yield to 1%!
Japan- land of sliding doors and slant eyed whores.
The babes walking around Tokyo, wow, god I miss Tokyo!
Indeed.
This has got to be a junk record. BTW, noticed the Afro American "pimps" outside the massage parlors in Roppongi speaking perfect Japanese? Freaky.
Life imitating kabuki.
Our deflation will be much worse than Japan's due to a much lower savings rate to begin with which is now rising. I expect the savings rate in the US to exceed 10% by the end of Q111. That will diminish final demand and throw us in a deflationary spiral. This is the reason why I believe that yields are so low. I do not see hyperinflation without rising incomes and home prices, and with an increasing savings rate.
I know it is popular to espouse deflation now and that is what the illuminati want you to se, but the dollar has no clothes. inflation is the only face saving response when you're swimming naked and all the girls are watching.
the illuminati just called, they have some gold they'd like to sell you.
Is it the tungsten or paper variety?
Just a hint: mentioning illuminati makes you look like a nutcase. Call them "bankers" or "politicians", or "insiders", and you'll look a lot less looney.
with all of our liabilities, it is impossible for the fed to accept deflation. impossible. this mindset will pave the way to not only the dollar end game but also the end of all other fiats regardless of final demand. and if the rest of this country wakes up, the savings rate of 10% you mention will be denominated in hard assets rather than paper ie gold, silver, oil, ag, energy or self sustaining energy technology...the only thing holding the dollar up right now is our overstretched military.
++.. Exactly.. way too much debt for deflation to be the answer or remedy or result.. .. you are right.. impossible..
well, i really really really like your theme you got going here, mr durden.
damn, no S H A M E from these guys, only from the geisha's, right.
your g o o d, your real g o o d.
hahaha you are sow innocent, there is no such a thing us deflation
What effect will inflation have on Life Insurance, annuities and the same for deflation?
In an inflationary scenario, you will be getting your annuity, but it will have lesser buying power. In a deflationary scenario, you may or may not be getting all your annuity, but if you do, you will have higher buying power for discretionary items but not necessarily for food and shelter.
Correct - at least "austerity" preserves some purchasing power for the fixed income defenseless. It also has a tendency to force the legalized embezzlement (think Bell CA) out into the open. Runaway or hyperinflation punishes all but the workers who are either self sufficient or can demand wage adjustments on the fly.
Great question! Hardly any have inflation trackers, so serious inflation means you have paid for an utterly worthless payoff. Deflation is obviously good for the policy holder, except that the company may well run out of funds before they pay you.
Bottom line, if you see either one starting at a serious level, cash out as fast as you can.
Best thing out of Japan in the last decade - "Ninja Warriors"
I would have to say "rub-and-tugs" the best export myself.
Everyone in Japan seems to be inventive. I know some circuit designers who would blow your mind with depth of knowledge in their field.
But is the US headed to this extreme while we wait for the decade of nothingness to end?
http://www.gearfuse.com/top-12-weird-japanese-inventions-that-never-quit...
No way. Not even close.
It's clearly "Schoolgirl-Worn Panties Vending Machines"
http://www.snopes.com/risque/kinky/panties.asp
rusty rusty rusty, shackle me, oh i mean this --!--
japan, culture with a long history of regarding woman more as sex toys than people. true?
Aristotle believed woman are colder than men and thus a lower form of life. pretty much spells it outright, there mr. A. plus, he also believed that females could not be fully human.
these are the kind of conversations i would like to have .
rapunzel,
please, let down your hair. We await your comments. We will add in commentary from Sanger and Teddy R. as necessary.
dang, I like long hair in a woman.
- Ned
You can gainsay U.S. debt all you like, but the fact of the matter is that Japan's economy is very dependant on social obligations.(including employment) In fact, its economy is so dependant on government spending that it would make the U.S. social programs look like some sort of Dickensian-era pickle-up-your-butt fiscal rectitude.
All of the mounting trading losses are coming from a decline in interest rates, and everybody still believes that interest rates will rise because you have 'social programmes.' Give me a break. What a scam.
And, quite frankly, peak oil theories which cast America as being totally dependant on Arab producers is totally out of whack with reality. America is the third largest producer of oil in the world. And American oil producers are firmly ensconsed in the middle east, which nobody can do anything about.
U.S. oil extraction has been in decline since 1970. Peak Oil is a geological phenemon. Simply because a U.S. company is developing foreign oil fields does not mean the oil must come here. Most of the Arab countries have state owned oil companies, not U.S. companies.
Extraction is around 8 million barrels per day, imports closer to 10 million barrels per day. However most of the oil imported is not from Arab states, but oil is of course fungible so a shortfall from elsewhere can affect imports. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M
Peak oil is not a theory. It's a geological fact. Onshore oil production peaked in 1982, why else would companies spend billions of dollars developing offshore fields 30k feet deep? Denying reality doesn't mean it stops existing. It just makes the eventual punch a lot harder.
Because laws, regulations, and NIMBY make drilling new wells on shore, or in shallow water uneconomical?
The more I think about it, the more I think that peak oil in the US is a political phenominon, rahter than a geological one. Much liike we had "peak manufacturing" during that time as well, as new onerous laws and regulations ground new projects to a halt, and forced many of them overseas.
How do you expect to buy oil from overseas sources when the USD loses reserve status (and all credibility)?
The US will go into Iran by hook or by crook, because it has no other choice to ensure supplies that it will otherwise not be able to afford to purchase in a year or so.
Pardon, but who was talking about foreign oil? I'm talking about production in the United States.
I'm inclined to agree.
A friend of mine (an architect in London) knows someone who used to be quite high up in BP (not at Hayward's level but knew him) and had recounted to my friend that there IS oil closer in to the coast of USA (from recollection, I think he'd said California) but that they are not permitted to drill for it because of the points noted by tmosley.
Admittedly not first hand but my friend is very reliable.
So why was tmosley's post junked?
DavidC
Yes, there's a lot of easily reachable Oil just off of California and also Cape Cod, Martha's Vinyard and Nantucket if you can believe it. But there are drilling moritoriums there. Can you imagine Ted Kennedy having allowed Oil drilling off of Cape Cod?
Offshore drilling is just as safe as riding in Ted Kennedy's Limousine.
Unless you can prove something, it is not a fact. Consider that with the ascension of China as the number one consumer of oil along with Europe and America, there are no shortages of oil- in fact, there are surpluses.
This would be like saying there is "peak" gold, just because the easy pickings have been mined.
The Malthusians were wrong and the peak oil school is a theory. The propaganda value of scarcity has tremendous economic value. Believing government or official sources of information that are at odds with observation can be detrimental to your economic health.
Just as complaints of "onerous regulation" in manufacturing and exploration become ridiculous in the face of the obvious power and control through lobbying by the biggest corporations on earth-oil companies. If Exxon wanted cheap oil, we would have it.
The creation of scarcity through propaganda allows for the transfer of wealth outside the free market mechanism. The abuse of this mechanism is the purpose of government. It facilitates the theft of resources and wealth for the benefit of the elite.
As a consumer, you have the power of demand creation, the only weapon useful against criminal corporate behavior. This weapon is only as powerful as the population is educated in its' application and against which policies we choose to discriminate.
As the authorities in all disciplines are used to create disinformation, both scientific and economic, the level of distrust by consumers must rise to meet the challenge.
The Earth is a sphere, a sphere is finite, oil is under the ground on this sphere, therefore oil is finite. If something is finite, you can not extract something at increasing rates indefinitely.
Especially when political restrictions are placed on extraction.
There is plenty of oil to be had, and cheaply, if the government stepped aside. Hell, get rid of the income tax, and suddenly there is 30% more capital available (at least), and projects that were not viable suddenly become highly profitable.
Sure there is a finite amount of oil, but we don't need an infinite amount. We just need enough to run our civilization until we come up with something better. Much of the fossil fuel use can be eliminated by removing the vast and insurmountable barriers that have been placed upon the nuclear industry. Remove the asinine restrictions on fuel reprocessing, and suddenly we have enough nuclear fuel to sustain a n exponentially increasing electricity usage for several hundred years. Thousands if use levels off (which I would expect, as human population growth is projected to level off within 40 years, and stabilize around 7 billion).
I guess you haven't heard about peak uranium then...
Peak uranium only applies where fuel reprocessing is not allowed and mining operations are hindered by big government.
So on the moon then?
Unless, of course, you re-think the basics. Fossil Fuels, uh, why aren't there fossils in, around, near most major oil pools. Perhaps the old Russian was right- Mother Earth is continuously creating carbon combinations through gravity and pressure.
Peak Oil is bullshit. It helps keep the price up. The oil companies coin in the cash big time and Americas enemies in the Middle East laugh all the way to the bank.
Why don't we embrace the Peak Air theory. After all the Earth is a finite sphere, blah, blah, blah.
Malthus was wrong, you are wrong. The only thing finite is the boundaries of your mind.
.
Peak Oil is a clever marketing ploy by the Oil Cartel. The supply of oil is constrained largely by economic, environmental and political facts.
The U.S. needs an energy policy to reduce (foreign) oil consumption as a security measure.
Take all the U.S. dollars that have supported and continue to support enemy regimes in the Middle East, put it into infrastructure to distribute non-oil fuel for American cars and there would be no problem finding cheap domestic energy.
The only thing standing in the way is Crooked, Corrupt American Politicians. There is such an abundance of these, that the buying price is dirt cheap.
How about Corrupt CRooked American Polititians. CCRAP for short (with a heavy Scottish accent).
So what is this non-oil fuel source you speak of? Not trying to be an ass, just curious. Sure we have a surplus of corn for ethanol, but last I checked that stuff is heavily dependent on oil for fertilizer stock, tractor fodder, gas to ship it to market, etc. Where is the cheap and easy domestic energy you mentioned above?
1. Use North American Crude oil only for lubricants, airplanes and military vehicles
2. Take the Military expenditures protecting Americas enemies in the Middle East and subsidize the DISTRIBUTION (filling stations, etc.) of natural gas, and coal oil, including the commercialization of its production.
3. Mandate, as a National emergency measure, that all commercial vehicles must run on Natgas. The technology already exists for diesel engines in highway trucks and delivery vehicles.
4. All vehicles registered within 50 miles of a city center must be electric or hybrid.
And all of the above must be (North) American made.
This National Emergency Measure would help wipe out the trade deficit and would employ many in getting America off the addiction to foreign oil.
1. Use North American Crude oil only for lubricants, airplanes and military vehicles
2. Take the Military expenditures protecting Americas enemies in the Middle East and subsidize the DISTRIBUTION (filling stations, etc.) of natural gas, and coal oil, including the commercialization of its production.
3. Mandate, as a National emergency measure, that all commercial vehicles must run on Natgas. The technology already exists for diesel engines in highway trucks and delivery vehicles.
4. All vehicles registered within 50 miles of a city center must be electric or hybrid.
And all of the above must be (North) American made.
This National Emergency Measure would help wipe out the trade deficit and would employ many in getting America off the addiction to foreign oil.
Oh- Provide a $100 million dollar reward for the commercialization of cellulosic ethanol (this technology is almost at the tipping point) This process opens up grasses, corn stalks, forest debis, etc. Interestingly- the enzymes in a termites gut is a distinct possibility.
Foreign oil suppliers are the US's best friends and always have been contrary to MSM and NSA propaganda. We may be exiting the Age of Oil prevalent in the past 100 years but we'll adjust accordingly with a suitable alternative. If I knew the solution, I would not be typing shit to strangers.
When an addict needs a fix, his dealer is always his best friend. Middle East countries hate America, but they love (loved) the USD. How else to buy IED's and arms to funnel to their man Osama to kill American (and NATO) troops ?
Many suitable, practical, energy alternatives already exist but Vested Interests stand in the way of change. Do you think Exxon is going to belly up to the bar, and order alternative drinks, when they are selling oil ????????
America built the atomic and plutonium bomb(s) entirely from an untried theory to a working product in 2 years. America can get off the addiction to Middle East oil anytime our politicians grow a spine.
Mate if you are going to talk about fictitious characters like Osama then i can't argue with you any longer. As for those countries hating America, well it depends on your reference point. Is it the people or the politicians? If it's the people, then you may as well add Americans to the list of those who hate America as evident through the dismal approval ratings. As for Exxon hoarding technology to save their bread and butter, this is doubtful. 5/10 largest corps are oil meaning that they do have the means to purchase and exploit any alternative and therefore profit further if it were possible.
No, the oil issue is a lot more complex and political than any discussion or campaign lines touting green energy. IMO, it's about the USD and Middle East stability, namely, Israel. In other words, remove the centrally controlled wealth of the monarchs and oil rich Mid East puppet regimes and before you can blink, their defenseless sand castles come under attack by their own populations. Blink again, and Israel is pushed into the sea.
+1 America-hating American
Dude, gravity is still a theory.
No, gravity is an observation. We aren't sure what causes gravity, and those explanations that claim to fall under the category of "hypotheses", as we have been unable to observe either gravitons or the so-called "God particle".
Correction: gravity is a theory that is currently the best approximation in words for what is observed by all of us daily. It is still a theory. I'm reasonably sure that the hypothesis stage was passed after the millionth dropping of some heavy object from the top of whatever building occurred. God I hate science, and yet I am a scientist. Fuck me.
VK-
er... environmelnstalistis freaks? W/lawyers? care to queue up any "advocate groups" that send "political contributions" to their "representatives"?
dontch'a know
- Ned
You can gainsay U.S. debt all you like, but the fact of the matter is that Japan's economy is very dependant on social obligations (including employment).
Well, they combined a bit of the US model with a bit of their model. See Deming for an example.
Personally, I'd not mind those social obligations regarding employment come from Japan and come back here. That is, an obligation that prefers to keep people employed and/or makes it easy to connect people with secure work.
Let me say this: I don't believe in peak oil. Its a theory, not a fact. Junk me all you like.
Japan is well situated to weather economic storms because of their infrastructure spending, but their people shouldn't be living in the closet.
I don't believe in peak oil either;
surely if we just stuck a big straw into the surface of the moon...
Cheez Whiz only powers bloggers in the basement
Peak oil is similar to trees. There were days were northern Africa, the middle east and other desert areas were full of trees. Trees being the source of energy, they were slowly cut down and disappeared. Even today Brasilian forests are being devastated. This is well researched and documented. there are antelop remains in the middle east. Lebanon was covered by cedars not too long ago. You may believe that peak oil is not iminent, but you can't possible believe that oil is infinite.
Real estate in Japan is a plenty, but it is controlled by a few trading companies and it is being released for development in a controlled manner so that their other RE holdings do not collapse. Japan is manipulating the Yen and can signal the exporting companies when to repatriate profits held in foreign currency and when to expatriate Yen during buying opportunities, like now.
Even a 10-15% swing in currency can turn a loss to a profit. Watch the Yen before March 31 each year. (Japan's end of fiscal year.)
I would say that a rush into the Yen and a decline in the Dollar/Yen signals problems with the Yuan.
As for the trees, there will be a day when people will point to the stumps and say what a great forest there was there at one time, just like they do in B.C.
But for the defunct oil wells sitting at the bottom of the ocean it will probably be having to figure out a way to keep them capped in perpetuity and prevent the oil from killing all marine life. Not that I believe necessarily in abiotic oil theories, either.
FranSix,
Which planet are you living on?
The Earth is a finite (although organic, in both senses of the word) system. It's a mathematical fact that, if oil is used, at some point it will run out - unless we chop down tress, let them lay and wait a few million years for the oil to develop.
It doesn't matter if oil runs out in 10, 100 or 1,000 years. If we use it, it will run out and at some point we have reached the peak (however it's defined - available, usable, retrievable, 50%, etc).
DavidC
So what? The Earth is going to eventually plunge into the sun too. Choose your burial plot in the end we are all incinerated anyway.
Who gives a damn if we run out of oil in 1000 years. Finite must be held to a relative time horizon. For all intents and purposes, OIL IS INFINITE.
"The sky is falling, we are running out of oil...." Exxon and her sisters love the sound of your music. In twenty years they will still love the sound of your music.
Ahhhh such a deal you got my friend, the last, yessirree, the very last barrel of oil on earth.
That day will NEVER happen but Exxon and the other oil whores will keep taking your money.
- and coal, it's spontaneously regenerating also, right?
no, Rusty, it is not. Joe Bite-Me has declared the end of coal. So there. - Ned
you probably dont believe in the exponential growth "theory" either, do you, nor understand that a mere 7% growth for 10 years = a 100% rise, but youve got a harsh wake up call coming your way fairly soon (geologically speaking)
Actually, beyond a certain consumption satiation point, I do discount the "exponential" growth theory.
I think you will find most growth in the last decade or two was based on "services" (especially fictional financial services). And governments of all stripes fake numbers.
So try to balance what they want you to believe as "growth" against the 3 year decline in real GDP. Exponential growth reaches a limit.
And since the highest percentage of the economy is services, perhaps if you got a haircut every day, we could have an economic take-off to the stars.
For the U.S., I predict an exact reversal of the trends during the 1982-2000 bull market cycle, namely asset deflation and goods inflation.
DOW was 14k now 10k
NAS was 5k now 2k
Houses down 30-60%
Gas up 300-400%
Food energy UP
And you are uh "predicting"?
Fair point so "predict" was probably not the correct word choice. Continuation of the trend since 2000 would have been a more accurate statement. I was trying to make the point that we will continue to suffer from both deflation and inflation (not either / or). Unfortunately, it has been the worst mix possible - asset and wage deflation combined with goods / commodity inflation.
RK and AI
Yes, the nail on the head. Inflation in the necessities and deflation in the rest.
Our Politicos all subscribe to the old saw- Put one hand in the freezer and the other hand in a pot of boiling water- on average you should feel fine. I wonder how much longer they will continue to use this propaganda.
Figures lie and liars figure.
NIA has some of the best (if a little dramatic) perspective on how this may play out. What I find alarming is that all the humongus numbers thrown around get massaged to fit the prevailing argument, but none the less, these numbers get more incomprehensible every month! Since this worldwide ponzi scheme is unprecidented in history, it's anybodys guess as to the final out come Hoping for the best and preparing for Mad Max is something I would have never in my wildest dreams thought possible in America. Through history, God has always given nations what they ask for.
Hmmm..I don't know about NIA, this guy has some interesting facts, lousy presentation, but the facts speak for themselves.
http://www.youtube.com/watch?v=U0LrDzJRMRI
There is more...google is your friend.
Yeah - every NIA presentation should have the LEBED disclaimer. However, ZH did not not endorse joining or buying anything they offer, just presented the work product which was superior imo.
Compare the US Congress to a gambler who has exhausted all his funds and borrowed left and right hoping for a miracle. Since they will only be accountable for a few years extending and pretending pushes the problem furthe in to the future.
However, the future is here now. No more bets please. "The die is cast."
I used to subscribe to NIA until they started peddling penny Oil stocks. It's got all the trappings of a Pump and Dump operation to me. I cancelled.
No lucky lost decade for the US. More like an Argentine collapse followed by a break up soviet style. The US has no savings as a buffer and it has no strong global export market. Plus oil production has peaked. Life must become simpler and less complex, the marginal returns are collapsing.
Except that the North will be more than happy to repeat a Sherman's March to the Sea.
- the "North" may get a boot stuck up its ass.
The Union would probably lose this go-around. Us Yankees are soft.
i'm a pure yankee-I'm on the south's side - ned
Hard to do when the south has nukes.
There is a reason powerful nations don't engage in direct war anymore, and any subdivision of the US is going to create several powerful nations, most or all of which will be nuclear armed.
tm--
Dontcha' know. But don't know about locals seizing weapons. There are plans.
- Ned
Older workers in their golden age in the U.S. don't exist?
http://online.wsj.com/article/SB1000142405274870401790457540936414358410...
C'mon.
"While major economic, sociological and financial differences do exist"
As much as I hate to say it hellicopter Ben gets it. If he can pull it off politically, 1:1 odds, the next QE will be aimed at the bottom of the income ladder. Politically the test is the Bush tax cuts. Both Greenspan and Bernanke have said they sould be left to expire. Greenspan had some unusually harsh language about them. Appropriate for his position as a "retired" chairman. The proposition that the monied classes can be counted on to make investment capital available if only we give them a tax cut has been laid bare as a fraud. Trickle down is nothing more than a golden shower with a nice name attached. The monied classes deserve punsihment for their inflexible obstinancey. All the greedy bastards did was hoard the money. Like we need more of that?
effing right, J6P!
This whole country has turned into a scam. What a horrible reality. Even if the "economy" grows its way out slowly, there will be no widespread prosperity and the farcists will still be in power.
Incredible.
So far, the money elite are coming out on top of this crisis. In 1930's the elites bought up stuff for pennies on the $. They might want the same to happen now.
If the $ hyperinflates, all those treasuries become worthless. Who owns treasuries? The top 1%[I know pension funds have em but the 1% would be out more than a $40K pension]. A reset would harm the elites but would help both Joe6pak and ChipCountryClub. No more mortgage on the Detroit and Newport Beach houses. Credit crds go to 0. The US as a country would be better off. All those foreign $ holdings are worthless. Thanx China and Deutschland for all the free stuff!
But the elites dont want a strong US so I think they dont want $ hyperinflation. They are doin great with things as they are. They seem to want to err on the side of deflation. Plus as Americans become impoverished, they become dependent more and more on Uncle Sugar. So Sugar gives em bread and circuses and some legal weed. Riot problem solved :)
And what about those scary deficits, trade balances, govie debts? NIA is correct if the system worked on honest math. IT DON'T!!!!!!!!!!!!!!!! Sugar and the oligarchs will just change a few laws and standards. Pump up the DOW for election season, etc, etc, ad nauseum.........
Read a quote from Goerring. Was talkin to the boyz in private. Went somethin like: I cant believe how grateful the peasants are for just getting a little food from us.
Gold will do OK cuz they will create enough $ to buy bread and circuses. The world elites dont love the Golden Goose[US] but they get enough eggs to go along. If they crash it, we go back to agrarian within 10 years. Then how much fun is having 40 guys pull you around in your Ferrari at 10mph?
Read up on Wiemar. A hyper inflation is a great time for the oligarchs to marshall resource and buy assets. Now does an oligarch really care if a choice piece of land costs 1,000,000,000, when he can borrow at 0 into a hyper inflation so net cost of 0? It's not like they are going to announce it. My guess is if they really want to pull the trigger then you'll see the big boys get piles of fresh money and start buying with wild abandon. J6P will behind the 8 ball and once again lose. Sure our debts might be cleared but we would own nothing.
It's not like Ben is going to dump money out of helicopters, it goes to a select few. Remember he who touches the printed money first has it at full purchasing power.
I read a bit on Wiemar; the oligarchs with less leverage ended up buying the more leveraged. ChipCountryClub did OK by speculatin equities. The bums do get the fresh money first.
My crash/agrarian remark: there isnt much reserve in our basic systems. All this just-in-time shit. Its all complex and very interrelated. Read that if we had a nationwide electric grid fail- we might not get it back up-ever. We might have local power- subject to outages. The quality of personnel in many areas is low. Products of dumbed down schools since the 70's. So...if youre an Oligarch, why risk the unknowns of hyperinfating? The current method of stealing 1 or 2% of the nations standard of living each year can be hidden from the baffled.
Unless they wanna use a crash to bring in a world currency;not SDR but an entirely new animal.
Have some cash n AU, what else can ya do? Lead and food too.
dang- foil hat - you don't need AU foil for what Gauss said merely needed to be conductive.
And I'm all with you for the JIT stuff.
I've shaken the hand of the engineer who uses the waterwheel to restart the Northeast blackout. He maintained that puppy despite "management."
- Ned
The dollar won't become worthless. Its being replaced as the world currency by gold so yes treasuries will lose their purchasing power but you won't lose you money. The SDR/gold will value all currencies. In otherwards all currencies will spin off gold. If gold is increased purchasing power will increase if money supply increases gold will go up.
I firmly believe we maybe paying back the chinese thru the gld. That is owned by HSBC and hong kong based bank. If we give them that everything is back to even. Or the government will take it. Gold is probably going to a minimum of 12000-15000 overnight if not and they use some calculation based on world money supply your looking at 50000 gold. After gold revaluation and money printing begins again you will get your inflation. We will not look like japan. There will be no goods everything will be very expensive and worst of all we will continue to vomit jobs especially in the financial sector after this.
Shhh. We're paying Saudi's in gold to keep them from driving the exchanges. China keeps her own gold. HSBC is a creature of The City.
I doubt gold would revalue so high without being confiscated and outlawed first.
Why would they repay in gold rather than dollars fresh off the preSs?
No choice. Zimbabwe can't pay for goods produced outside of it's borders with their hyperinflated dollars. There will come a time when similar austerity is forced upon our own government (though they may attempt to force people within the US to keep using dollars).
IF they have gold, they would pay with printed dollars as long as they could, then switch to gold when they were forced to do so. Should they switch to gold payments, I agree that they might try confiscation again.
I forgot to add which will have some effect on money supply that something big is going down in the housing market. I think its a 1 for 3 on everyones mortgage. Your looking at a severe dislocation after this and the housing market has got to be free its so locked up with everyone in over their heads. Your looking at a severe reduction in primary residents mortgages. But you still have to work to pay off whats left and the job situation is so bad .....there has already been 2 rumours to this effect in the past week.
Gold 12000-50000 is coming
I started laughing at 500% debt/gdp.
THE JAPANESE BOW. WE NUKE. - A GREENSPAN
I just don't see how these guys can see Japan in a better economic position than the US or the yen as a stronger fiat. The point of Japanese guv borrowing being financed by its own citizens is a good thing how? Seems to me that how the debt is financed is only relevant if there is a question of default. All fiats fail but if there is a confidence crisis in the yen or Japanese bonds what can they do to regain the trust? I just don't see them having the same riggle room as the US. They could cut back on public services and entitlements and then what? They only spend about 50 billion on military spending so there are no cuts to be had there. The US can get out of two wars to reign in spending before they have to cut public services or entitlements. I know military spending in the US doesn't get talked about but according to Wiki it is between 880 bil and 1.1 tril. Also as the reserve currency, every trade surplus and commodity country has a vested interest in keeping the greenback kicking. Sooner or later the dollar will be junk but I can definitely see it outlasting the yen, and also hanging around for a lot longer than most inflationists think.
Sovereign debt is claims on futeure tax reciepts. They can tax the very same people that that own their debt. The US can not.
This video is fucking garbage. Don't watch.
yep, you're correct,, for all you plebes out there, google "george4title"...better yet, see this;
http://www.youtube.com/watch?v=sDxUjMOKROU
Good grief. I hate to say shame on Tyler. But Wow.
It appears most have still missed "it" Rusty. Now, I dont like to swear too often, but I HATE scammers who pump-n-dump stocks or who aren't transparent about their dealings, and I know a crook when I see one. SO, you pump-n-dump stocks, take the filthy cash and get someone to produce a fairly decent video so you can get more people to sign up for your newsletter so you can get more fools to buy the stocks your newsletter is pumping. Don't get me wrong, the video is pretty informative, but it is not a documentary and is designed to hook the viewer and pull in more subscribers to the newsletter run by a con artist. Because the video is produced for the end goal of profit, I wonder if anyone as questioned whether all the manegerie of copyrighted material was reproduced with permission.
Yeah, yeah, yeah. I'm all for the relentless ZH undressing of the wicked oligarchy for their grand diabolical schemes against humanity. But, Lebed (ahem NIA) is scum cut from the same mold!! ZH would be wise to disclaim the video.
ADDENDUM: This is just a wild guess, but having studied and done a little investigating of the Russian Mob, Lebed looks like a usual suspect.
inflation.us ... run by a stock pumper? WTF
If you're going to make comments like that at least qualify why in some way.
I may not agree with a viewpoint but if it makes me THINK I will at least consider it.
So, watch this video, it is NOT 'fucking garbage'.
FYI, personally I veer towards deflation or stagflation, the latter of which isn't discussed very much.
ADDENDUM - OK, I stand corrected! I've just viewed this on YouTube;
http://www.youtube.com/watch?v=gR2nx9I8f5k&feature=related
A bit more involved than I realised!
However, I still maintain my comment about viewing alternative viewpoints if they make me think!
DavidC
What if those comments are based on disinformation engineered to trick you? Does it not blacken the source and venue?
I seem to remember not too long ago that Marla was also trying to trick the readers while cooing over:
Timothy Sykes .com
hummmmm.
You know - you guys and gals have pointing devices that allow you to vote NO. I said it above and I'll say here again. NIA has a huge credibility problem and nobody is asking you to click anything besides the video. Refute their thesis if you can, but the numbers seem legit if you take Turbo Tim at his word. The GSEs will be monetized, he said as much. The non-discretionary entitlements must be factored in to the debt calculations. If you do those two things and come up with different numbers, then bully - let's have 'em. I find the premise of the video to be sound. I wouldn't go to the NIA website for anything more than viewpoint information.
"This video is fucking garbage. Don't watch."
We won't watch because the act of watching gives the video additional views. Additional views adds twisted credibility on youtube.
I can't wait till they add the 'Count Me Out' button so the dissatisfied viewer can act as if they didn't see the garbage that they were tricked into viewing.
--Pissed
Would someone explain to me how hyperinflation or even signficant inflation gets any traction in this economic environment? So Bernake prints money. How does he get it into the economy? Unless he comes out and tells Americans that there will be 2x or 3x the amount of dollars out there tomorrow, why would people all of a sudden start buying up stuff expecting hyperinflation? If anything, people would be stuffing it away, saving, or paying off debt.
I just don't see the environment to support high inflation regardless of whether the money supply is expanded. Maybe I'm missing something here. Any help?
My guess:
1: China will ramp up its current global shopping spree to dump low interest rate US dollars and thus prices of imported goodies goes up. Result : Stagflation in USA. Gold continues its upward march.
2: PTB here jack up Treasury debt interest rates. Result: Economy here is strangled to death and price of gold tanks.
3: Food riots and worse cause PTB to distribute so much cash to so many peasants that hyperinflation kicks in. Gold price (in USD) goes to moon.
I’m not so sure about gold tanking in step 2. Foreign demand and people wising up on a global scale may drive up price of gold even if interest rates are 50% per minute. If gold does tank I’ll just buy more.
My personal plan is 50% gold/silver. 50% canned food.
No - prices go up before hyperinflation. The Gov floods the zone to keep people pacified. That cycle thus begins the vortex that spins tighter and faster. My electricity bill is way up. My water bill is significantly up. Voinovich is seriously proposing new gas taxes (!). Go back through your checkbook register a couple years and wax nostalgic. Wages are falling against real price increases in many essentials.
Reflections on Australia's Housing Bubble
http://israelfinancialexpert.blogspot.com/2010/08/guest-post-reflections-on-australias.html
Anyone under the age of 40 and living in an Australian capital city knows first hand that it is becoming increasing difficult to find a decent, reasonably priced home within a reasonable commute to work. We’ve all watched in amazement, disbelief or dread as we, our friends or family are priced-out of the housing market or take on mortgages the size of a small African nation simply to put a roof over our head. But how expensive have Australian house prices become? Where has the money come from? And is this house price growth sustainable?
To answer the first question, Chart 1 plots average Australian established house prices (sourced from the Real Estate Institute of Australia) against average Household Disposable Incomes (HDI) and Average Full-Time Ordinary Earnings (AFTOE).
http://israelfinancialexpert.blogspot.com/2010/08/guest-post-reflections-on-australias.html
Reflections on Australia's Housing Bubble
Wait a while Dan, and save your pennies. You patience will be rewarded.
Thanks for the link , an interesting read.
short aussy v usd via medium dated out the money options is probably a worthwhile punt.
im perplexed at the ACB raising rates into 2010 , i see that as a similar policy mistake as the BoE raising rates in late 07/ 2008. Im assuming theyre trying to pop the bubble , a la China. Seems better policy to reign in bank lending and poor lending standards than jacking up rates though. The AUD is over valued and when the ACB are forced to reverse course and cut rates dramatically in a bid to shore up the housing mkt once the correction spills over into a slump , their currency will crumble. For Australia , see UK in 2007-08
Sorry to nitpick but the Reserve Bank of Australia (RBA) dictate the interest rate changes in Australia.
Point of information, as this occurs quite a lot on ZH - one doesn't 'reign in lending', one 'reins in lending' - comes from guiding or controlling horses via their reins.
I may be pedantic or I may be anally retentive, I'm also grateful if anyone corrects any of my errors (in a polite way!)
DavidC
Hear, hear!
3 responses , all about an acronym and a spelling error. Seriously guys , theres alot of white noise on this fantastic website as it is , if you must pass the captcha to use bandwidth up to make the comment section longer , at least respond in kind to the posters statement. Do any of you have a view on the Australian housing market circa 2010 and possible similarities to the UK housing market crica 2007 ?
If im writing a resume or a thesis on part of the financial market i'll use a spellchecker - when im responding on a blog , i wont. Thanks all the same.
OK, fair enough, but it dilutes the message for me if the poster can't spell correctly (and I DO appreciate that English isn't everyone's first language).
A lot (NOT alot) of job sites emphasise checking spelling and grammar because of the unfavourable (I'm English hence the spelling!) impression of bad or incorrect use. I've been in the position of employing people and it's true.
Spellchecking will NOT pick up faults - effect and affect are both valid words meaning slightly different things, for example.
I'm happy to have errors pointed out to me.
Look at Tyler and crew's posts. Very few errors (which do get corrected when they're picked up, I've noticed) and high level use of language (and humour! Again, English spelling).
Rant over.
DavidC
equity_momo,
With regard to your question about the Australian housing market, it's a bubble. Steve Keen has some great stuff;
http://www.debtdeflation.com/blogs/
DavidC
thx for the link.
It is good that you pointed that out.
Question: Wouldn't it be more correct to have a colon after "Point of information" rather than a comma? ;>()
Implicit simplicit,
That made me smile! You could be right!
Now, where's my Fowler's 'Modern English Usage' got to?
DavidC
Not to be a nit picker, DavidC, but a central bank could "reign in lending" while concurrently "reining" in lending.
And ultimately reigning in lending is a prerequisite to reining in lending.
I know, enough already.....
Hi Kayman,
Good one!
DavidC
What's with all the spam on ZH as of late?
Does no one have respect for the format here?
Last time I checked, income ain't the opposite of a loss. Though I do agree with the sentiments underlying the NIA's work, me smells the whiff of propaganda.
The crux of this is the House of Sauds relationship with the US. I dont see them dumping treasuries . Until there is a credible alternative to the dollar as world reserve currency there will be no hyperinflation. Before that alternative occurs , the US will start more wars and create more imbalances in regions around the world to destabilize competitors.
The end game has started but it can take a very long time to play out.
A credible alternative to the dollar must be supported by an even more aggressive military force.
http://www.globalissues.org/article/75/world-military-spending#InContext...
When you invest in a tool, you don't just purchase it's utility but the guarantee behind it.