For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Joined: Dec 11, 2005 Posts: 430 Location: albuquerque
Posted: Tue Mar 13, 2007 9:02 pm Post subject: Re: Which will come first, deflation or hyperinflation?
All speculation.
Quote:
The analytical models tracking crude oil prices are sending warning signals for the economy. The crude oil future market and its derivatives are forming the long-term tops and cyclically are ready to collapse to levels unimaginable. Oil bulls are looking for $100 a barrel because there is no substantial new supply. But the problem is that the world economies are headed for depression.
The build in deflationary pressures from the real estate bubble burst in US, Yen?s forced rise from extremely undervalued levels, China and India?s potential hyperinflation is creating a scenario where the world economies can eventually collapse into deep recession if not depression.
In that case the shortage in supply is overtaken by collapse in demand. That is normal if you can believe the world is experiencing bubbles in china, India and US as far as the growth and stock market rises are concerned.
If the markets experience deep global recessions or depressions, oil price bulls may be trapped for a long time. Oil can collapse very easily to $30 or below a barrel. The oil price cycles point to that kind of price adjustments. The fundamentals from economies and bubble bursts confirm that.
Posted: Tue Mar 13, 2007 9:34 pm Post subject: Re: Which will come first, deflation or hyperinflation?
threadbear wrote:
Give it a rest, or have your welfare schtick tested by mythbusters. It gets really old, really fast.
I'm not exactly sure what you mean by this, but my point was that banks made out mortgages to people that had no hope in hell of ever paying them off. Very large mortgages have been given to people with little to no income. The welfare mom slant was just a quick way to convey this.
The big problem I see with this bailout plan is that the amount of subprime loans are in the Trillions. Where the hell is a government that is already 1 Trillion a year in debt going to get the "legitimate" money for this. Sure they could just roll out the printing press, but it will reek of fresh ink will reach from here to Shanghai.
The government can print money but it cannot appear to be printing money. Germany tried the "'screw you' and print" approach, but it didn't work out so well. _________________ Angry yet?
Joined: Oct 23, 2004 Posts: 5487 Location: New Jersey
Posted: Tue Mar 13, 2007 9:51 pm Post subject: Re: Which will come first, deflation or hyperinflation?
billp wrote:
All speculation.
Quote:
The build in deflationary pressures from the real estate bubble burst in US, Yen?s forced rise from extremely undervalued levels, China and India?s potential hyperinflation is creating a scenario where the world economies can eventually collapse into deep recession if not depression.
What happens if all these new energy projects don't come on line due to worried businesses and oil producing nations? What happens if oil supply collapses faster than demand? Are those restless natives of oil producing nations in the Mideast and Africa just going to sit around while their standard of living plummets? _________________ It's already over, now it's just a matter of adjusting.
Posted: Wed Mar 14, 2007 12:28 am Post subject: Re: Which will come first, deflation or hyperinflation?
Hell, this thread and others might be why I had a nightmare last night.
Dream scene obscure, but I and my loved ones were moving in the dark going through strange homes looking for shelter. It was an odd feeling to awaken and have the sense that all is not well in the dream world as well as the awake world. I normally have pleasant dreams.
cynthia
Posted: Wed Mar 14, 2007 1:28 am Post subject: Re: Which will come first, deflation or hyperinflation?
FoxV wrote:
The big problem I see with this bailout plan is that the amount of subprime loans are in the Trillions. Where the hell is a government that is already 1 Trillion a year in debt going to get the "legitimate" money for this. Sure they could just roll out the printing press, but it will reek of fresh ink will reach from here to Shanghai.
This is a great point. And add what you say to the fact that the government's own debt is heavily funded by short term paper. The country's financial future rests on a knife's edge. Awful things are almost certain to happen if their money policy is made either too strict or too accommodative. Therefore it appears the government must do the same thing you would do if you owed too much money to your creditors. Contact them with your hat in hand to try and work out special payment arrangements. Or, possibly, if you're a really big debtor, put your hat back on, start strutting, and threaten Armageddon.
Posted: Wed Mar 14, 2007 1:57 am Post subject: Re: Which will come first, deflation or hyperinflation?
Zentric wrote:
if you're a really big debtor, put your hat back on, start strutting, and threaten Armageddon.
Reminds me of the saying:
Quote:
Owe $5 000 to the bank
and you are in trouble.
Owe $5 000 000 to the bank
and the bank is in trouble.
Sorry I haven't voted --- can't make up my mind which way the herd of investors will run. Panic could set them off in any direction.
But I know that deflation would make it much much harder for me to sell the idea to my work place of spending money to mitigate some of the effects of PO. It is a hard enough sell even in the time of rising oil prices. _________________ We should teach our children the 4-Rs: Reduce, Reuse, Recycle and Rejoice.
Posted: Wed Mar 14, 2007 2:19 am Post subject: Re: Which will come first, deflation or hyperinflation?
Count me in on the deflation camp. The government's hands are so tied financially it's doubtful any bailout package will make it out of congress (if it can get moving faster than the unwinding of the realestate market will proceed). Credit will get tighter and money will evaporate as economic activity quiets. Deflation solves the energy dilema pretty well, since a dying economy uses less energy so it doesnt matter so much that all of the major oil producing nations have slipped into decline. Deflation is unacceptable elsewhere though as it makes lending practically impossible (not to mention repayment of existing loans). It also removes the growth incentive since people will wait till tomorrow if they know it will be cheaper, or their savings will go further. I fully expect the government will make a real go at reinflation though at this point I havent thought how that will play out. _________________ UNplanning the future...
http://unplanning.blogspot.com
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Wed Mar 14, 2007 8:10 am Post subject: Re: Which will come first, deflation or hyperinflation?
Inflation of oil/NG and everything affected by it and deflation of the rest. I think that Real Estate will deflate, it needs the support of the local economy which will fail due to high energy prices. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Joined: Aug 25, 2004 Posts: 34 Location: Regina, SK, Canada
Posted: Wed Mar 14, 2007 8:53 am Post subject: Re: Which will come first, deflation or hyperinflation?
There will be no deflation. If a deflation took hold (a reduction in the supply of money) the level of debt default would be astronomical. As more debt was defaulted up and fiats became harder and harder to come by people would loose confidence in the currency. The currency is a debt note, your cash is someone elses liability. When that liability is defaulted upon your note becomes worthless. As that happens prices for goods would start rising as people rushed to get rid of their paper. I'm voting for the end of paper currencies... inflation... till the people are crazy to try it again in anther hundred years. _________________ Drive to work... work to drive!
Posted: Wed Mar 14, 2007 9:09 am Post subject: Re: Which will come first, deflation or hyperinflation?
FoxV wrote:
saving Welfare moms from getting kicked out of their $300K 500sqft condo will just be the excuse to drop a nice big pallet of cash on the person's mortgage holder
if they really wanted to bailout the borrowers, they would change the bankruptcy laws to make it easier for them to dump their debt and start over.
What are the odds of that happening
Yes of course. After all, why practice something like personal responsibility? Instead, let's punish the responsible middle class while giving Jerome, Shanice, Maria, and white trash Joe free government money to compensate for the fact that they are completely worthless Fark-ups who overextended and "bought" a home--no money down, on a 5-year IO ARM. Now these dirtbags are seeing the reality that anyone with a brain the size of a flea's dick saw 4 years ago.
Posted: Wed Mar 14, 2007 2:18 pm Post subject: Re: Which will come first, deflation or hyperinflation?
Prince wrote:
FoxV wrote:
saving Welfare moms from getting kicked out of their $300K 500sqft condo will just be the excuse to drop a nice big pallet of cash on the person's mortgage holder
if they really wanted to bailout the borrowers, they would change the bankruptcy laws to make it easier for them to dump their debt and start over.
What are the odds of that happening
Yes of course. After all, why practice something like personal responsibility? Instead, let's punish the responsible middle class while giving Jerome, Shanice, Maria, and white trash Joe free government money to compensate for the fact that they are completely worthless Fark-ups who overextended and "bought" a home--no money down, on a 5-year IO ARM. Now these dirtbags are seeing the reality that anyone with a brain the size of a flea's dick saw 4 years ago.
My take is this. People who overextend are unlikely to be financially savvy in the first place.
There should be a duty of care NOT to loan money to people who can't pay it back to you.
If one of your friends or relatives came asking to borrow $1, $100, or $5000 you *know* if you give your hard earned money to the less reliable ones you are unlikely to ever see it back.
IMO the banks/institutions/system loaning the money and trading the derivatives etc.. should just be allowed to go belly up. Sell up all the overextended people and start from scratch.
The whole bail out every financial mess e.g. LTCM due to stability or whatever reason just gives the cowboys in the industry more reason to offer financial products that are just speculative, such as the sub prime mortgage market.
These financial institutions that provide "easy finance" actually make it harder for the more responsible people to own a home due to the artificial demand they create in the housing market by writing large cheap easy to get loans.
This has been a disaster waiting to happen for a few years, I am genuinely surprised it has taken so long to even come to the fore and there is still a question whether our financial masters can put a lid on the problem.
Time will tell... _________________ "Once the game is over, the king and the pawn go back in the same box."
-Italian Proverb
Posted: Fri Mar 16, 2007 10:20 pm Post subject: Re: Which will come first, deflation or hyperinflation?
Kris wrote:
There will be no deflation. If a deflation took hold (a reduction in the supply of money) the level of debt default would be astronomical. As more debt was defaulted up and fiats became harder and harder to come by people would loose confidence in the currency. The currency is a debt note, your cash is someone elses liability. When that liability is defaulted upon your note becomes worthless.
The above was correct till about this point, but conclusions were all wrong and thus the opening statement was wrong.
Kris wrote:
As that happens prices for goods would start rising as people rushed to get rid of their paper. I'm voting for the end of paper currencies... inflation... till the people are crazy to try it again in anther hundred years.
This is based on an assumption that there are people with lotsa paper doing the rushing... Please name those people!
Most definitely it ain't gonna be Joe Six-Pack deep in debt as it is and doing the defaulting. Then it ain't gonna be the bank foreclosing. Then it ain't gonna be the Federal Governement sharing the situation with the Joe. It ain't gonna be the leaders of Chinese Communist Party either for they need to make sure that all those Zhangs are employed and not rioting and doing stupid things like revolutions. Zhangs ain't be those people either dreaming on saving enough of those $1/hour paychecks to finally step up from a bicycle to Yugo happy to be working for everybody above. So who is going to do all this buying to push prices up?
If there is no demand at this price, guess what, prices fall till there is a demand to match the supply of all those distressed things at the lower price. No way around it and thus no other way then deflation.
If there would be hyperinflation then driving a Hummer or an Excursion is the same as driving a Prius - no matter what you paid at the pump it wouldn't matter since you would pay 1/2 next time. In context of peak oil this is ridiculous and obvious that it ain't gonna happen.
Posted: Fri Mar 16, 2007 11:08 pm Post subject: Re: Which will come first, deflation or hyperinflation?
Kris wrote:
The currency is a debt note, your cash is someone elses liability. When that liability is defaulted upon your note becomes worthless.
Not exactly. Most big loans are collateralized by something real. So there is backing to the money incase of default.
Quote:
As that happens prices for goods would start rising as people rushed to get rid of their paper.
Problem is the general public is in debt and is needing more debt to service the current debt. So it's debt stacked upon debt which amounts to a lot of money. If there is a reduced availability of credit, loans everywhere will not be able to be serviced and the banks will seize up. The government/fed will bail the banks out by creating tons of new money. End result is a poor economy where everything is expensive.
Or keep loaning people more and more money so they can keep paying the interest. Eventually the inflation evaporates the middle class and totalitarianism easily takes hold.
Posted: Fri Mar 16, 2007 11:51 pm Post subject: Re: Which will come first, deflation or hyperinflation?
When Argentina had their banking fiasco, and currency collapse, prices sure didn't fall, they skyrocketed, supply was constrained and demand fell because there was hardly any available money for anything. Prices rose but real estate prices fell.
All times are GMT - 6 Hours Goto page Previous1, 2, 3, 4Next
Page 2 of 4
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
