Posted on 12/05/2008 9:29:14 AM PST by mr_hammer
>>Yes, I’m aware of all that. My question is: what is the practical point of trying to sort out or claim we are in or going into a Depression?<<
The same reason you check the weather report to determine what to wear. It enhances the reliability of short and long term planning.
Is this now voodoo economics?
When you count the disabled, retired, students and those too young to work, the true unemployment rate is over 50%.
Who thinks we can't have inflation during a recession? You have a list?
Maybe my glasses are dirty, but I can't see any deflation of your chart.
THAT period was deflationary.
Disinflationary, not deflationary.
Yep and these metrics should only apply when there is a Republican President! When a democrat is in the White House we should count the family members of the employee as part of the employment forces even if they are not working.
But to work out your question. Well, they do not all mature at once. So, it is not like we have to come up with the money, just like that.
They could sell them quite quickly, to other parties who would then hold them.
Thus it depends upon the worlds appetite for T Bills, which right now, is very good.
I suppose the 2 trillion dollars will mostly come out of dollars from out side the US.
This would make dollars more valuable, as they have gone to China.
But what will the Chinese do with the dollars? Stuff it in mattresses? Maybe they will buy American wheat, farm goods.
At worst we will have to increase the yield on T Bills to find more dollars other than the ones the Chines got. For us it might well pull dollars out of private savings, banks, private investments. So interest rates will go up.
So, we would see higher interest rates, slower economy, China stuffed with dollars, and yet higher debts for us.
Maybe a stronger dollar, China investing in its capacity and exporting yet more and higher value goods.
I can not think more beyond that.
I think we have had inflationary recessions in the past, although what these clowns are doing today make James Earl Carter and his ilk look both wise and restrained. In fact, these bozos seem intent on making Robert Mugabe jealous.
Bush obviously thinks there is nothing the Federal Government can't or shouldn't supply. Bernanke obviously thinks there is no limit as to how large the money supply should be...no limit.
Lots of people think Obama is the smartest guy in the room. I wonder what he sees as a legacy maker, other than dead babies as far as the eye can see.
Nice chart, sink_rules. Keep the faith.
I couldn’t agree with you more.
No kidding. Why only today oil jumped from $42 to $40 a barrel (4 year low) while gasoline futures jumped from nearly 97 cents all the way to 90 cents a gallon (5 year low). Darn that Bernanke!
NO, but I have some links. Beginning with this one from the wall street journal http://blogs.wsj.com/economics/2008/01/04/which-is-the-bigger-risk-recession-or-inflation/
and I am extremely glad to hear you are not one of those who would be on such a list. Actually, I think most of these people know that the situation is not that you "cannot have both of them" but that they think the cure for recession is inflationary activity. My point is that the inflationary activity will lead to the need for interest rate pressure that will lead to semi-depression, or you have to let the currency go......, and you won't stop the recession anyway. Deflation is ugly, but inflation is deadly. Not much you can do to stop deflation, as it is part of the business cycle. You CAN stop inflation, though, by not being a damn fool and printing money it as a tool to alleviate deflation. It is like setting off a nuclear device on your lawn because you don't like the gophers.
Inflation is not deadly. We survive inflation on a daily basis.
Not much you can do to stop deflation,
Except increasing the money supply will stop deflation.
as it is part of the business cycle.
If it's part of the cycle, why don't we have it every few years?
You CAN stop inflation, though, by not being a damn fool and printing money it as a tool to alleviate deflation.
It's true, you don't stop inflation by printing money. Nobody is trying to stop inflation when the threat is deflation.
It is like setting off a nuclear device on your lawn because you don't like the gophers.
Worrying about inflation when deflation is the threat is like treating your hangnail and ignoring your heart attack.
I've been saying for awhile now that Obama is going to the be the nation's first black Jimmy Carter.
"Stagflation".
It's likely, but not certain: in the 1970's the US was a much larger portion of the world's economy than it is today. What happens when we have all the factories all over the world trying to prevent themselves from going under, all trying to sell to us? That's not inflationary.
On the other hand, you have the Fed spending money at a rate that even democrats get helicopter envy. That IS inflationary.
Which will win?
Read an earlier vanity of mine on the subject (from almost three years ago) here.
Kyrie Eleison!
Wouldn't this depend on whether you have lots of spare cash sitting around, or are heavily in debt?
If you have cash, you love deflation.
If you are in debt, you love inflation.
I’m not talking about individuals, I’m talking about the entire economy.
...however...
isn't the economic the aggregate behaviour of individuals?
(i.e. we didn't have a problem of "too much saving" during the Bush administration now ending, as Japan did during their L-shaped recession of the 90's.)
Kyrie Eleison!
“I believe a depression is a recession the government fixed.”
You just found yourself a tagline.
Yes. More people would be harmed by deflation than would be helped.
Thanks for your thinking on this....$2Trillion would buy a lot of acreage in Montana
http://www.chinadaily.com.cn/china/2008-07/04/content_6817936.htm
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.