[mattduke]

[eastbay]

This is a very telling chart. It reinforces my repeatedly stated contention we're entering into a historically unique (for the US dollar) inflationary period.

Any deflationists think otherwise? I'm always ready to read differing perspectives.

[3aidlillahi]

I'd noticed a month ago the plunge that the growth rate had taken. No doubt, it was from banks stopping their lending a great deal and the slowing economy. This, the rebound, was to be expected given the $x trillion that were dumped publicly and privately into the markets within the past few weeks. And I don't even think that chart has captured all of that dumping. 30% by Christmas is certainly possible.

Anyone check out the Gold-Silver ratio? It's nearly 90. I remember when it was less than 50 just a few months ago.

[pedalling_faster]

This is a very telling chart. It reinforces my repeatedly stated contention we're entering into a historically unique (for the US dollar) inflationary period.

Any deflationists think otherwise? I'm always ready to read differing perspectives.

i did allright in conventional business school classes, and i'm comfortable with medium complex math, but i do not understand the US monetary system.

it seems like a huge amount of money was created during the last ten years. but for every person that sold a home at a profit while real estate prices rose, e.g. an ex-Lockheed manager i met in Willits who sold his home in Silicon Valley for $500K, and bought a home in Willits for $150K. $350K worth of funding to buy gas for the Harley. multiply that by how ever many million, it seems like a lot of money is being created.

but on the deleveraging side, as people are having to deal with other people not re-paying the money they borrowed to finance some crazy investment, it seems like money is somehow being destroyed. that is, part of the money supply is being somehow un-created.

the Fed is not actually transparent. i would really like to find out how the Fed works. who owns it, who manages it, a flow-chart exactly describing how money is created & counted.

[mattduke]

This is a very telling chart. It reinforces my repeatedly stated contention we're entering into a historically unique (for the US dollar) inflationary period.

Any deflationists think otherwise? I'm always ready to read differing perspectives.

i did allright in conventional business school classes, and i'm comfortable with medium complex math, but i do not understand the US monetary system.

it seems like a huge amount of money was created during the last ten years. but for every person that sold a home at a profit while real estate prices rose, e.g. an ex-Lockheed manager i met in Willits who sold his home in Silicon Valley for $500K, and bought a home in Willits for $150K. $350K worth of funding to buy gas for the Harley. multiply that by how ever many million, it seems like a lot of money is being created.

but on the deleveraging side, as people are having to deal with other people not re-paying the money they borrowed to finance some crazy investment, it seems like money is somehow being destroyed. that is, part of the money supply is being somehow un-created.

the Fed is not actually transparent. i would really like to find out how the Fed works. who owns it, who manages it, a flow-chart exactly describing how money is created & counted.

http://mises.org/rothbard/rothmoney.pdf

[mattduke]

Past 22% growth rate.

[topfuel]

Okay for 3 weeks what's on the next page,
to simple to say just yet,but I still don't get the #'s

[Daculling]

It's flat without the TAF, PCDF, other alphabet soup...

That money is going into the singularity. It is not inflationary.

Inflation comes later when they overshoot. Just my opinion.

[smallpoxgirl]

We've gone round and round about this before, but inflation is not increasing money supply. Inflation is rising prices. Some fields of economics hold that increasing money supply is always the cause of inflation. To measure whether you have inflation though, you have to look at prices. Prices right now are falling pretty rapidly. It's pretty clear to me that we are in deflation at least for the short term. The reason is that there have been significant changes in the way money is flowing right now that aren't reflected in the M3. Everyone from Chase Bank all the way down to Joe the delusional non-plumber have suddenly started hoarding money. Everybody is saving all of a sudden and not spending. It's fundamentally changed how money is flowing. A lot less of that M3 is circulating than was 3 months ago.

If and when the credit markets loosen up and more of that M3 starts moving around again, then as Daculling said, we're likely to overshoot and end up with some pretty serious inflation, but we're not there now.

[ReverseEngineer]

Everyone from Chase Bank all the way down to Joe the delusional non-plumber have suddenly started hoarding money. Everybody is saving all of a sudden and not spending.

You are joking I trust? Nobody I know is saving massive amounts of money, and the banks aren't saving it either despite the fact Ben is delivering truckloads in JIT fashion

Where this money is going is into the Black Hole. It is simply disappearing from existence. Its going into accounting books to balance out contracts which for all intents and purposes are meaningless. Pouring the toilet paper into the Black Hole does not make it appear on the street. It just reconciles the books, which in the end worldwide will show negative net worth, which is of course impossible. There is SOME value left out there, just this accounting system is not accounting for it. Its at the Zero Point.

Reverse Engineer

[smallpoxgirl]

Where this money is going is into the Black Hole. It is simply disappearing from existence. Its going into accounting books to balance out contracts which for all intents and purposes are meaningless.

Then why is it still showing up on the M3 chart?

Nobody I know is saving massive amounts of money

Everyone I know has canceled all their major purchases. Consumer spending is WAY down.

and the banks aren't saving it either

Actually, yeah. They are. Bank reserves are currently over 4 times what they were two months ago.

[cube]

We've gone round and round about this before, but inflation is not increasing money supply. Inflation is rising prices.

If you insist on using this definition (which is fine by me) then I think we need to break it down:
stock market - deflation
real estate - deflation
everyday expenses - inflation
I don't see prices going down at the grocery store and my land lord isn't reducing my rent that's for sure.
So that means we have inflation in everyday consumer prices with the exception of perhaps SUV's.

[ReverseEngineer]

Then why is it still showing up on the M3 chart?

Because its still on the books and hasn't yet been used to settle out contractual obligations in the CDS market.

Everyone I know has canceled all their major purchases. Consumer spending is WAY down.

Cancelling purchases is NOT the equivalent of saving money. Its just not spending money you don't have.

Actually, yeah. They are. Bank reserves are currently over 4 times what they were two months ago.

This because they still have not put on the books the debts owed thru the CDS market. When this stuff goes live, it sucks the reserves down in a virtual INSTANT. The banks are piling up as much money as they can to try to survive this storm, but they cannot do it and Ben can't print the money fast enough for them to do it either. CDS are Weapons of Mass Economic Destruction. I did not say that. Warren Buffett said that.

Reverse Engineer

[smallpoxgirl]

I don't see prices going down at the grocery store and my land lord isn't reducing my rent that's for sure.

Understand, the cycle I'm talking about here is about the last 3 months.

Rent prices are high right now because of foreclosure pressures. There's a fair number of people that use to own homes and are now looking for rentals. The counter to that is that housing prices, certainly are falling.

I couldn't begin to tell you what's happening to food prices over the last six months, but I can tell you that cocoa, wheat, corn, pork bellies, the raw materials that become your grocery store foods are all plummeting right now. So are natural gas, gasoline, coal, and heating oil. Car prices are significantly down. Precious metals, aluminum, tin, copper, all the things that go into your consumer goods have fallen off a high dive in the last three months.

[smallpoxgirl]

When this stuff goes live, it sucks the reserves down in a virtual INSTANT.

That's just simply not true. A CDS is a counterparty contract. One person has to pay money to another person. So one person goes broke and another gets rich. There is no CDS monster that gobbles up and digests money. CDS settlements move money. They don't destroy it.

[eastbay]

I don't see prices going down at the grocery store and my land lord isn't reducing my rent that's for sure.

Understand, the cycle I'm talking about here is about the last 3 months.

Rent prices are high right now because of foreclosure pressures. There's a fair number of people that use to own homes and are now looking for rentals. The counter to that is that housing prices, certainly are falling.

I couldn't begin to tell you what's happening to food prices over the last six months, but I can tell you that cocoa, wheat, corn, pork bellies, the raw materials that become your grocery store foods are all plummeting right now. So are natural gas, gasoline, coal, and heating oil. Car prices are significantly down. Precious metals, aluminum, tin, copper, all the things that go into your consumer goods have fallen off a high dive in the last three months.

For the government, a prolonged deflationary period is a nightmare scenario, to put it mildly.

I strongly suspect it won't be allowed to continue much longer. Expect more money rain and other decisive monetary action.

[Tyler_JC]

SUVs, cars in general, construction services, electronics, clothing, gasoline, natural gas, heating oil, and toys are all falling in price based on what I see.

There are going out of business sales all over the place.

Linens-N-Things is having a massive fire sale of all of its merchandise. If you want heavily discounted pillows, now is the time to act. Dust ruffles are priced to SELL.

This isn't a great sign for the health of the economy...but it's certainly putting a damper on inflation concerns. At least in the short term.

[mattduke]

M3 + TAF hits 24.5%

[ColossalContrarian]

I don't see prices going down at the grocery store and my land lord isn't reducing my rent that's for sure.

Understand, the cycle I'm talking about here is about the last 3 months.

Rent prices are high right now because of foreclosure pressures. There's a fair number of people that use to own homes and are now looking for rentals. The counter to that is that housing prices, certainly are falling.

I couldn't begin to tell you what's happening to food prices over the last six months, but I can tell you that cocoa, wheat, corn, pork bellies, the raw materials that become your grocery store foods are all plummeting right now. So are natural gas, gasoline, coal, and heating oil. Car prices are significantly down. Precious metals, aluminum, tin, copper, all the things that go into your consumer goods have fallen off a high dive in the last three months.

Aside from rent, it seems like everything you've pointed out is really helpful for J6P for the time being.

It's a market that favors towards the consumer when the price of everything falls. I'm not going to complain about the price of everything falling. I'm also not going to go out and get a loan or make an expensive purchase but from my perspective everything looks rosey, at least for the time being...

[firefly]

I have been going to the bank for weeks, removing my 401 k in cash, bonds, in cash, accounts in cash and putting it in the safe at my dads business. and I bank at four different banks over the years with several accounts at each.

I am down now totwo accounts, one with 50 dollars in it (the lowest In the last 12 years) and another with under 100,000 which I plan to leave in there. If there is a collapse I can phone in the next day and digitally request the whole thing transferred to the Internal revenue system online banking and move it all there that way I will be overpayed for the fourth quarter and if the government exists next year I will get it back if not no loss.

anyway... the rest of the story...


In the last two weeks, all the cash at all the banks is newly printed, crispy, and they are having trouble counting it out. Their limits are now down to 2000-4000 at a time and one suggested I come back wednesday "We are expecting a large truck of money on wednesday, but you better come in the morning because by Thursday we maynot be able to cash you out again...

What are people are doing with their accounts? Obvious.

Everyone is, as quietly as possible, removing all the cash they may have saved very quietly, and converting to gold or burying it.

A Third person met me at the door, asked me how I was doing, did I have fun this weekend? and he was appearing very nervous...
He asked why I was there today.
I said I just wanted to check my account.
When he heard that he became noticebly more relieved and then a nearby lady asked if I would be interested in starting a new account.

I said no, I have too many accounts and I want to close some of them and today I want to cash this one out. She became noticebly sadder. it was an old account I used for Ebay (ebay is worthless these days haven'tused it for months) and I wasnt sure how much was in it it just collected the profits of the sales as I was getting rid of stuff when we moved to our isolated retreat permanently. Only had a couple thousand in it, but still she had to ASK if there was enough to cover it!

There is nervousness in the banks THIS WEEK, this did not exist last week. something is up.

Anyway,we beat the rush, we have enough to survivefor some years and the money is in bundles of 1000. I figure that is how much a bag of flour will cost next year.