The Deflation Monster Has Arrived
Submitted by Chris Martenson via PeakProsperity.com,
As we’ve been warning for quite a while (too long for my taste): the world’s grand experiment with debt has come to an end. And it’s now unraveling.
Just in the two weeks since the start of 2016, the US equity markets are down almost 10%. Their worst start to the year in history. Many other markets across the world are suffering worse.
If you watched stock prices today, you likely had flashbacks to the financial crisis of 2008. At one point the Dow was down over 500 points, the S&P cracked below key support at 1,900, and the price of oil dropped below $30/barrel. Scared investors are wondering: What the heck is happening? Many are also fearfully asking: Are we re-entering another crisis?
Sadly, we think so. While there may be a market rescue that provide some relief in the near term, looking at the next few years, we will experience this as a time of unprecedented financial market turmoil, political upheaval and social unrest. The losses will be staggering. Markets are going to crash, wealth will be transferred from the unwary to the well-connected, and life for most people will get harder as measured against the recent past.
It’s nothing personal; it’s just math. This is simply the way things go when a prolonged series of very bad decisions have been made. Not by you or me, mind you. Most of the bad decisions that will haunt our future were made by the Federal Reserve in its ridiculous attempts to sustain the unsustainable.
The Cost Of Bad Decisions
In spiritual terms, it is said that everything happens for a reason. When it comes to the Fed, however, I’m afraid that a less inspiring saying applies:
Yes, it’s easy to pick on the Fed now that it’s obvious that they’ve failed to bring prosperity to anyone but their inside coterie of rich friends and big client banks. But I’ve been pointing out the Fed’s grotesque failures for a very long time. Again, too long for my tastes.
I rather pointlessly wish that the central banks of the world had been reined in by the public before the crash of 2008. However the seeds of their folly were sown long before then:
(Source)
Note the pattern in the above monthly chart of the S&P 500. A relatively minor market slump in 1994 was treated by the then Greenspan Fed with an astonishing burst of new money creation -- via its ‘sweeps” program response, which effectively eliminated reserve requirements for banks .That misguided policy created the first so-called Tech Bubble, which burst in 2000.
The next move by the Fed was to drop rates to 1%, which gave us the Housing Bubble. That was a much worse and more destructive event than the bubble that preceded it. And it burst in 2008.
Then the Fed (under Bernanke this time) dropped rates to 0%. The rest of the world’s central banks followed in lockstep (some going even further, into negative territory, as in Europe’s case). This has led to a gigantic, interconnected set of bubbles across equities, bonds and real estate -- virtually everywhere across the globe.
So the Fed's pattern here was: fixing a small problem with a bad decision, which lead to an even larger problem addressed by an even worse decision, resulting in an even larger set of problems that are now in the process of deflating/bursting. Three sets of increasingly bad decisions in a row.
The amplitude and frequency of the bubbles and crashes are both increasing. As is the size and scope of the destruction.
The Even Larger Backdrop
The even larger backdrop to all of this is that the developed world, and recently China, have been stoking growth with debt, and have been doing so for a very long time.
Using the US as a proxy for other countries, this is what the lunacy looks like:
As practically everybody can quickly work out, increasing your debts at 2x the rate of your income eventually puts you in the poor house. As I said, it’s nothing personal; it’s just math.
But somehow, this math escaped the Fed’s researchers and policy makers as a problem. Well, turns out it is. And it’s now knocking loudly on the world’s door. The deflation monster has arrived.
The only possible way to rationalize such an increase in debt is to convince oneself that economic growth will come roaring back, and make it all okay. But the world is now ten years into an era of structurally weak GDP and there are no signs that high growth is coming back any time soon, if ever.
So the entire edifice of debt-funded growth is now being called into question -- at least by those who are paying attention or who aren't hopelessly blinkered by a belief system rooted in the high net energy growth paradigms of the past.
At any rate, I started the chart in 1970 because it was in 1971 that the US broke the dollar’s linkage to gold. The rest of the world complained for a bit at the time, but politicians everywhere quickly realized that the loss of the golden tether also allowed them to spend with wild abandon and rack up huge deficits. So it was wildly popular.
As long as everybody played along, this game of borrowing and then borrowing some more was fun. In one of the greatest circular backrubs of all time, the central banks and banking systems of the developed world all bought each other’s debt, pretending as if it all made sense somehow:
(Source)
The above charts show how hopelessly entangled the worldwide web of debt has become. Yes, it's all made possible by the delusion that somehow being owed money by an insolvent entity will endlessly prevent your own insolvency from being revealed. How much longer can that delusion last?
All of this is really just the terminal sign of a major credit bubble -- a credit era, if you will -- drawing to a close.
I will once again rely upon this quote by Ludwig Von Mises because apparently its message has not yet sunk in everywhere it should have:
“ There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
~ Ludwig Von Mises
Well, the central banks of the world could not bring themselves to voluntarily end the credit expansion – that would have taken real courage.
So now we are facing something far worse.
Why The Next Crisis Will Be Worse Than 2008
I’m not just calling for another run of the mill bear market for equities, but for the unwinding of the largest and most ill-conceived credit bubble in all of history. Equities are a side story to a larger one.
It’s global and it’s huge. This deflationary monster has no equal in all of history, so there’s not a lot of history to guide us here.
At Peak Prosperity we favor the model that predicts ‘first the deflation, then the inflation’ or the "Ka-Poom! Theory" as Erik Janszen at iTulip described it. While it may seem that we are many years away from runaway inflation (and some are doubting it will or ever could arrive again), here’s how that will probably unfold.
Faced with the prospect of watching the entire financial world burn to the figurative ground (if not literal in some locations), or doing something, the central banks will opt for doing something.
Given that their efforts have not yielded the desired or necessary results, what can they realistically do that they haven't already?
The next thing is to give money to Main Street.
That is, give money to the people instead of the banks. Obviously puffing up bank balance sheets and income statements has only made the banks richer. Nobody else besides a very tiny and already wealthy minority has really benefited. Believe it or not, the central banks are already considering shifting the money spigot towards the public.
You might receive a credit to your bank account courtesy of the Fed. Or you might receive a tax rebate for last year. Maybe even a tax holiday for this year, with the central bank monetizing the resulting federal deficits.
Either way, money will be printed out of thin air and given to you. That’s what’s coming next. Possibly after a failed attempt at demanding negative interest rates from the banks. But coming it is.
This "helicopter money" spree will juice the system one last time, stoking the flames of inflation. And while the central banks assume they can control what happens next, I think they cannot.
Once people lose faith in their currency all bets are off. The smart people will be those who take their fresh central bank money and spend it before the next guy.
In Part 2: Why This Next Crisis Will Be Worse Than 2008 we look at what is most likely to happen next, how bad things could potentially get, and what steps each of us can and should be taking now -- in advance of the approaching rout -- to position ourselves for safety (and for prosperity, too)
Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
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So that makes good sense.
Increased population= economic growth.
And then population reduction by warfare = economic growth.
Neat!
Repeat as necessary.
I expect the end game is to provoke civil unrest and to watch us eat ourselves alive.
<<Repeat as necessary.>>
And, as TPTB bring in those "migrants" and "families", TPTB will give their nieces, nephews, and churchmembers jobs "managing" the NGO's and "charities" which distribute our tax dollars to those "migrants" and "families".
Hindus have a low birth rate now. The fertility rate in India (presently 2.5, which isn't that high) is brought up by Muslims. Even in Catholic Mexico it is only 2.22.
Thanks. Still way too many people in India, I think. Maybe they will get it down somewhat, I hope.
yup
The next industry to see rapid growth? That is easy, weapons, ammo, and military hardware. Just like the last time the wheel fell off the free shit bus.
Yup, it really does come down to it all being an issue of demographics.
I'd posted this link above, but will do so again because I htink it really does show this issue fairly clearly:
http://econimica.blogspot.com/2016/01/sources-of-growth-examined-and-fou...
I agree as usual. And if GDP only grows 0.5-1.0%/yr now on the back of population growth, it's going to take a really long time, and/or a large correction, to make global equities seem fairly priced.
"The really simple question to ask is " Name the field of industry or technology that could produce another wave of rapid world growth?"
War.
Remember it's an Erection year, of corse oil drops. We can surmise oil going lower until Hillary is locked in the WH. prices back up. do not get used to low prices proles
see you in Nantuket
Hils
that really is the damned if you do . damned if you don't choice. do they try to control the collapse infear of out of control inflation or do they put off the collapse with some inflation juice with the idea of being able to control inflation?
It will much harder to break the deflationary mindset than anyone believes. Japan has been trying for 20+ years and they still haven't accomplished it. If you kick money to the people a good chunk will pay off debts with it, thus putting it right back into the hands of the banks. It will do nothing to address the velocity of money problem we are experiencing.
" It will do nothing to address the velocity of money problem we are experiencing."
Yup, cannot force the horse to drink!
Demographics (the problem that Japan was hit with and no one was willing to admit to) is killing the consumerism "milk cow." And with it, entire economies (to be followed by societal collapses).
Paying off loans will then wipe them off the banks' books. Clean here and then with little to no savings will mean the banks are out of business.
-The Fed has been defending a dying dollar since 1971. Volker was able to see it spared in 1979 but since then it has been on life support.
Yes there were winners along the way but the cost of nonsupport would have been....well we are about to find out because nonsupport and failing to support will look exactly the same. Everyone loses all financial wealth. First deflation then hyperinflation then we move on...have stuff (gold is the best 'stuff') when the hour comes.
WE have got to do something to stop this criminal cartel called the Federal Reserve, IMF, World bank, etc. Why does the US Federal Government, which is authorized by the Constitution to create and issue interest-free money, instead borrows that money at interest from a privately owned central bank, thereby plunging future generations into debt slavery to that bank? THAT is the real question we should be asking!"
The idea of a Privately owned central bank printing what THEY call money and loaning this ink and paper out with interest is patently absurd.
And their powers are based on the notion of perpetual growth (on a finite planet). The PROBLEM is far more systemic than it being just about the banking cartel: "Go forth and multiply!"
We're ALL linked in with a bad premise (perpetual growth on a finite planet). We never asked the question of what would happen when growth ended (which was always a mathematical certainty).
Romanov, what makes you think the US Gov would act any differently than the FED with regard to the creation of money?
What's the biggest problem with the creation of money...the principal or interest?
Just heard a real estate agent making fun of preppers during his Chicago area radio show. I think the guy is getting worried or desperate. Never heard that kind of nasty talk on his real estate show before.
Real Estate Agent/Car Salesman. Their fucking parasites.
How little you know: The REAL parasites are the RE Broker (with whom the RE Agent has to share 1/2 his money, so he can promote their brand), and the Car Dealership (that makes good money, even when the car salesman doesn't, because the salesman only gets a piece of the Front-end, and if the car price is dropped too much, it's the Front-end that gets chopped, whereas the Dealer still makes money on the Rear-end plus financing, none of which the salesman gets).
In the case of the car dealer, the people whose like bandits, are the guys at the Desk, surfing on the Net for financing opportunities with a given client. They get part of the Rear End margins, and each of them serves several (4-6) salesmen.
Chris Martensen,
"But I’ve been pointing out the Fed’s grotesque failures for a very long time. "
If you think what the Fed has done is a mistake, I have a bridge I'd like to sell you.
I understand your POV, but you're wrong. You probably think the Fed/Treasury 'saved us' from a collapse/depression. Wrong. They merely postponed it, and in effect guaranteed that the INEVITABLE collapse & reset will be much, much worse.
Most of the people I know that think like you are babyboomers - they love the Fed/Treasury for postponing the collaspe/reset... they just want to remain fat & comfortable until they die... typical selfish boomer mindset. Who cares if the country goes to hell-in-a-handbasket - I'll be dead! So long suckers!
Fuck that.
They should've let the banks fail, not socialize their losses. We should've taken the hit (recession/depression) back in 2002 and/or 2008, and if we had taken that medicine we'd be having a REAL recovery now... but instead, the biggest shitshow in economic history is still in front of us.
Fed/Treasury/USGov screwed the taxpayers and protected Wall St. - that was a mistake, and history will prove it so.
I haven't seen the survey, in which case I cannot speak to the point about babyboomers thinking a certain way or not...
"They should've let the banks fail, not socialize their losses. We should've taken the hit (recession/depression) back in 2002 and/or 2008, and if we had taken that medicine we'd be having a REAL recovery now... but instead, the biggest shitshow in economic history is still in front of us."
Who is "They?
Does one necessarily feel/know when a skyscraper falls when one is in the woods?
A recovery to what? To which bubble era?
The Fed et al did exactly what they were supposed to do- maintain commerce. Had they let the "collapse" happen then it would have been a "collapse." The System was never set to handle such a scenario- way too many things would unwind and blow up. I'm NOT saying this in defense of anyone or anything (other than facts).
I'm MUCH better off now than I was back in 2008. And no, I'm NOT a banker (or anything that folks here would find being offensive). Instead of spending my time looking to blame others and to "solve" the world's problems I have concentrated on making MY life better (knowing what is coming).
You seem to imply that you're older. I'd think, therefore, that you'd understand this being largely an issue with demographics. Unless one can understand what the REAL problem is one cannot possibly expect to resolve the issues. So, in an effort to help educate people I once again toss this out:
http://econimica.blogspot.com/2016/01/sources-of-growth-examined-and-fou...
To summarize your POV: We should just 'give up' and party like it's 1999 because we don't know what's wrong or how to fix it, so privitizing profits & socializing losses is a pretty good compromise because it maintains commerce.
Yikes.
I'll repeat my point since you clearly missed it... the inevitable collapse is coming - "they" didn't prevent anything, "they" merely postponed it. You do understand this point, this truth, this reality, yes?
"They" = Wall St./int'l banking cabal. "They" own the Fed. "They" stole 700 billion from US taxpayers because DC is full of idiot sluts, and "they" own those idiot sluts. And if you think all of this is hunky-dory, then you ARE indeed defending this shitshow, intentionally or not - intentions don't matter, but consequences do matter.
I'm sure "they" bought themselves just enough time to collect a few more jets & secure island compounds in the tropics... but the rest of us? We're just not that lucky, I guess.
Recover to what, you ask? For starters, how about re-building a real, non-FIRE economy. How about ending the fraudulent FRB system, and re-instituting sound/hard currency. How about ending the Fed. Those would be great things upon which a real recovery could be built. You seem to think capitalism/economics is just a never-ending series of bubbles. Wrong. Bubbles are the result of NOT allowing the business cycle to take it's natural course. Yes, the business cycle is volatile... it involves growth AND destruction, but it's a a shit-ton better than some academic modelists attempts to ignore the natural order and achieve never-ending expansion w/in a closed system (restricted by limited resources).
Please read the 'austrian' economists & perhaps brush-up on the laws of thermodynamics, too. Or perhaps you are retired/old and just don't care...
So you're better off... good for you. Pull back the shades and you might notice that the rest of us are being turned into serfs... ZIRP, student debt, inflation in the things we need, deflation in the things we desire but will probably never get, zero wage growth, the list goes on & on & on... apparently none of this is effecting you... count yourself among the few lucky ones.
EDIT: I, too, have worked hard to prepare/improve my situation, and I'm quite content at the moment. But unlike you, I still give a shit for my country, my neighbors, and the future that awaits our children & grand-children... if you want to interpret all of this as 'blame & complain', then that's your problem.
Agree 100%. Martensen, I'll day what you're thinking but can't say:
Ultimately, it's always The Bankers vs. The People.
It's the Government's job to keep bankers on a leash, because it is their job to do for us those things, that we as individuals cannot do for ourselves. Things like national defense, national infrastructure, national currency, national standards and rules on a wide range of topics, etc.
There will be no helicopter money. This article like so many others think that the Fed is there for YOU. They are not. They serve their member banks. The Fed is just the pimple on top of a festering abcess of government and banksters in collusion.
Why would the banks want to relieve you of debt? They are all planning to destroy the current system and enjoy the deaths of 5 billion people. We are not seeing a new cycle. We are seeing the end of things as they were with death and destruction to close out this existence.
Debt money requires deflation. It always demands a greater return than was given. Default will happen, even if there is a time of hyperinflation for some. But what is the mechanism of hyperinflation. How do people get this money when they do not have jobs? Free hand outs? Only temporarily for suckers who will be led to the slaughter.
Chopper dollars from the sky are indeed but a temporary fix. They may do it simply to improve their reputation or to buy time. And yeah, I think 10 grand should be a minimum and they'll do it through the IRS like last time- though I forget when that was.
The system includes you and me, and the FED. The three of us thought the world is infinite. Now we both have to suffer the consequences, as the FED won't excist anymore when this goes down.
"Why would the banks want to relieve you of debt? They are all planning to destroy the current system and enjoy the deaths of 5 billion people."
Maybe because they see this as being better to get the govt to print up yet more money to cover sure-to-fail-loans than to offer up a Debt Jubilee? That additional printing goes on the books of everyone. And when the inevitable comes, that massive business collapses occur it'll take out the banks anyway. I've always thought that the Fed was going to be the Black Hole of all debt, that it would suck it up and then implode (after which who knows).
Regarding this being some big plot to kill off a ton of people, well... who the fuck can actually speak to knowing? I can, however, and this is more important/relevant, say that NATURE (Nature's "god?") has the real say-so (and it's possible that these "bad" people understand nature?). But... "enjoy" the death of 5 billion people, no, maybe one person out there, but nothing like any majority that you seem to imply: how the fuck would ANYONE think that they've got their asses covered to survive in the face of such widespread death?
Reducing the global pop to ~2 billion seems logical, as it allows for plenty of workers of all types across the globe.
It also allows the planet to recover from the human blight that is destroying it. They will likely wipe out 50% of the developed world and 80% of the rest, using IQ, health and wealth as down-selection criteria.
It's what you'd do, if you used cold, dispassionate logic, and tried to solve the problem from orbit, or from places like Davos.
Yup. The people who think the Fed will allow Congress to give 'helicopter money' to Main Street are delusional yet you see it on here time and time again. They didn't do that in '08 and they won't do it again either even if this a huge shock. They'll let people on Main Street starve first and in large enough numbers if necessary as long as their isn't outright large scale social unrest and turbulence.
someone help me with this. in 2006, it was clear(not to many at that point because they were paid to ignore it or too dumb) the mortgage bubble was going to burst creating a huge sudden demand for liquidity. where is that danger today? so far, i only see an inventory recession. i don't see where some sudden demand for liquidity might come from. the interest rate rise has kind of done what it used to do, chasing money out of equities into bonds( a bit sooner than expected.lol) because the market expects the fed to back off but now that trillions of dollars have vanished there is a lot of room for more qe.
i think they will send out the black helicopters to drop pallets of cash in your neighborhood because the fed cannot go negative if for no other reason than the american people are too stupid to see it is meant to put money in their pocket and only because they are stupid they are right that it will do them no good.
hopefully the fed quants have developed an algo that tells the fed that helicopter money will juice the banking sector and i hope they determine $10000/person is the magic number.
"i don't see where some sudden demand for liquidity might come from."
Collapsing oil industry?
It's more about a reversal in growth that's the killer, more so than the "amount." Things just really don't work with negative growth: everything is programmed for positive growth.
While that match may not look all that threatening, the affect it has on the fuse, and therefore the bomb, is.
Keep an eye on what's happening up in Canada. The US is still the best-looking-horse-at-the-glue-factory, in which case you'll see how others end up being slaughtered first.
None of us knows from where the margin call is going to come from, BUT, it WILL come.
I cannot decide whether it'll be helicopter money or negative interest rates. I suppose that this means that the Fed is doing what it should be doing- not telegraphing what it's going to do next.
oops
the thing is the boom and bust commodity cycle isn't some mystery. yea, billions are going to lost and this suspension of mark to market is bad policy meant to keep the within some control. i don't see system crushing issues there. i see a paleorecession, an inventory recession. what is the overcapacity in the things that need oil? will it take a one month shutdown or a three month shutdown of the economy to catch up? i just don't see the source of catastrophe that would cause a cascading demand for liquidity. there is a critical mismatch in equities and fundamentals but this is just equilibrium beckoning.
show me where it is? i sincerely want to know.
i don't see any trigger that would chase people out of the dollar. the only thing i can speculate on is the new war, the virtual war fought with currencies getting out of hand accidently or a hot war.
the one thing that does concern me about the currency war is that the dollar must get stronger(as it has) before it collapses altogether. this would only be true now if there is something we don't know about that is about to break.
"Either way, money will be printed out of thin air and given to you. That’s what’s coming next. "
I sincerely hope so (although very unlikely). It will rapidly diminish the value of my outstanding mortgage and I'll use the newly printed fiatscos to buy more shiny. Bring it on. This has taken too long already.
Um no, the shiny will be way more expensive at that point, so you gotta buy the shiny now and sell it then to pay off the mortgage. Repeat after me- buy low sell high.
Amen to that, and Halleluja, Nirvana.
i had this ahha moment during the housing bubble. home equity represents value the homeowner cannot reach. when the homeowner sells they must buy another home and since all homes have increased in value (we hope) the profit on equity is used buying another home. so using home equity as savings is really a zero sum game despite what experts believe. opening up a line of credit on hoeowner equity seemed like a stroke of genius if the (new) equity was put to work in investments which return more than the rate of inflation and if this happened in concert across the entire class of assets. it was like printing money out of thin air. it blew up because the distortions in the economy, raging healthcare costs, grabbed the equity away from the homeowner before they could invest that money. homeowners were also caught up in spending their equity to improve the value of their home. that became the second obstacle to the alchemy of releasing hidden assets for higher return investments. (bad decision) then of course some people used the money for personal reasons, but people were being downsized and taking golden handshakes needed the money to gap their early retirement. the policy might have worked, with better education, more control, and proper regulation of the markets so that these investorss were not thrown to the wall street sharks.
now i digress, i just said goodbye to my mother, she and my father bought a home raised a family and made themselves financially secure through a depression and a war staying away entirely from the stock market. i think its a lesson another generation will have to learn. savings and frugality are what creates wealth. and if you take the equity out of your home today you wont have that later. in a world where you are judged by what you consume its a difficult sell. i would like to be here in fifty years to see how it all comes out. i think there will be a few winners among the 99%, its hard to say because the notion that you might have one job and that will sustain you seems less likely. it wasnt easier in those days, people just had different values and there was less social stigma to being thrifty.
"i think there will be a few winners among the 99%, its hard to say because the notion that you might have one job and that will sustain you seems less likely. it wasnt easier in those days, people just had different values and there was less social stigma to being thrifty"
Couldn't agree more. Now everything revolves around a 'credit rating'. When I moved back to Canada, been away for so long didn't have credit rating. Worse than having a bad credit rating.
There are still ways of getting housing and vehicles without the almighty thumbs up from trans union or equifax.
Condolences on your loss.
Deflation is a necessary part of a banker generated fiat cycle ... otherwise it would not be a cycle.
It is the only way the bankers can assure that they retain control.
The only problem is Greenspan blew the bubble way too big. Now(since 2008, peak debt), they can't deflate w/o implosion. They have bought time by putting the US taxpayers on the hook for another $9 Trillion. They are losing control. They'll need a pearl harbor sized false flag to distract everyone and excuse another huge US fed gov. debt increase. Desperate times=desperate measures.
Transportation costs for US retailers is quite a stick save.
It's likely to assist many of them in preventing (reporting) shit earnings for awhile yet.
Let's not also forget that US consumer is nearly maxed out, has shit credit scores and major purchases already completed. Banking laws allowing for CC usury rates is often overlooked by the general public. Tighter USD and shit wages will keep most in eternal debt, and they'll accept it as if it were the norm.
I'm expecting homelessness and food assistance to gain momentum this year. Cable and cell phone bills are taking a back seat to the urgency of paying for energy, water and mortgages. No additional hours available for US workers, and no available part time employment to keep up with the bills. I'm a seasonal worker and can tell you for a fact that not one of my fellow employees has any idea that their life is likely to change drastically.
I've said it before...Only food insecurity will awaken those who have no clue of what's happening around them.
Yes, the US consumer is maxed out, not to mention that Obamacare, as predicted, has siphoned off discretionary spending.
At some point, a large part of this debt mountain bankers have racked up is going to have to go to money heaven.
While I'd prefer to see the debt written off, it's more likely that humanity will get 86'd instead. That's been the Illuminati's/Federal Reserve shareholders'/Death Cult's/Transhumanists'/Bohemian Grovers' plan all along. The mathematical solution to Martenson's math problem is depopulation. Research their annually reenacted Cremation of Care ceremony that cleanses the elite of any remorse for their actions. As Gates, Winfrey, Rockefeller, Buffet, Turner and others stated publically after their billionaire get together 5 years ago or so, "God like actions need to be taken to reduce population." Well, those actions are being taken now. Look Up.
The Fed has reached the limit. It must now allow the economy to collapse or the currency to collapse. Deflation or hyperinflation. Me thinks they will sacrifice the economy this time around. But the danger is when the average Joe realizes that productivity and even conservative investing is being steadily penalized by the system. Then the currency collapses on its own. We may be pretty close to that point, but then again the average Joe in America is pretty darn stupid, so we will probably see this played out in the old political battle of fascism vs socialism first.
We have both inflation and deflation.
Things you need aren't getting less expensive. Food, cars, medicine, housing.
Shit no one needs is a 'bargain'.