Posted on 10/20/2009 11:17:05 AM PDT by blam
The PPI report this morning shows that inflation is deader than a door nail for the forseeable future(oops - a cliche!).
On the other hand(typical economist’s sidestep), there are ETFs one can use to hedge against. I think that is prudent.
The deflation/inflation prediction is confusing. Both will occur in the worst possible way. The falling value of the dollar will bring inflation, possibly hyperinflation. Currency traders will drive the dollar down similar to attacks on other currencies. Energy prices will rocket because of the fall in the dollar. Do not expect the dollar to recover quickly or at all unless the political situation here changes drastically. Wages will continue to deflate however (except perhaps for government). Companies will continue to reduce costs and move work to avoid the onerous tax and regulatory environment here. Economic ruin will occur similar to Argentina in 2001.
You pick. What's an example of hyperinflation?
That is the best summary I have seen on what is happening.
When the people see the money they are holding start to erode (through inflation even though it may start slow), they will start spending (and inflation will speed up), then start throwing their money at anything rather than watch it disappear by holding onto it. That is when hyperinflation will happen.
It is coming.
:D)
Economics by prayer
good luck.
I don’t know if you’d call it hyper or not, but gold and silver prices are heading up in a hurry!
Why? The system is so complex, we can't even predict the past. What got us into and out of "the" Great Depression? There's no consensus there either, and we have the data and a couple generations to think about it.
Heck, we don't have consensus on global climate direction, and we can measure that with a simple tool (okay, it's not THAT simple, but compared to the world economy...)
I'm coining the new term "hyper-stagflation" (think the 70's on speed). With the current deflationary trends in certain markets (housing, luxury items, autos, etc) the fed and Treasury will overcompensate to prevent the economy from contracting so that at some point within the near future (1-4 years I suspect), the crumbling trust in the dollar will evaporate so much and the money printing will broaden so greatly to try and restimulate the dead horse economy that one turning point event may likely cause a rapid collapse in the dollar with us finding ourselves in the worst of both worlds, high unemployment coupled with hyper-inflation.
Hyper inflation will not happen until people start spending again.
I think the American consumer is still spooked. I don’t think that’s going to change in the near future, either.
The only real way I can see inflation taking off is a complete collapse of the dollar at the international level.
I think, however, that’s unlikely, because there are way too many dollars held in foreign banks.
The Euro and Chinese Yuan are probably very over-valued. I know the Chinese manufacturing sector is in trouble if not near collapse.
I’m pretty sure the Euro has a lot of the same problems the Dollar has. I’ve seen articles indicating Europe wasn’t far behind the US when it comes to lending problems.
(and now we see why there’s no real consensus when it comes to the deflation/inflation argument)
And then they'll come to your region.
Buy this book, it's brilliant:
http://www.lulu.com/content/paperback-book/surviving-the-economic-collapse-a-modern-survival-manual/6745965
No hypothetical "zombie apocalypse" scenarios or BS, just facts from a guy who has lived through a complete currency collapse in what was a 1st world nation (Argentina).
I lived through the last inflationary period, 1971-1983 (but it started with decisions made a few years earlier than that). My father lived through the one before that, 1945-1950’s.
It does not happen overnight. That is why this will not come back to haunt its creator (I can’t say his name). However, when inflation starts building steam, it is VERY difficult to conquer. Reagan conquered the inflation in my day with the worst recession I have ever lived through, 1981-1983. This one is childs play in comparison (the Misery Index was 45% then. It is about 15-20% now). I understand from my father his was conquered by Eisenhower, which included a recession or two.
Reminds me of the guy that jumped off a tall building. As he passed each floor, he said “So far, OK”. Inflation is a lot like that.
Also, what about all of the debt and credit that's collapsing?
Debt = money and money = debt. There's a huge economic sinkhole that the Federal government is trying to fill with new spending.
It's not going to work.
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