Posted on 03/07/2011 6:41:10 PM PST by blam
Educate me on this.
If we suffer major deflation does that mean savings accounts will disappear/go under?
“I hope these articles are over blown but when they run the numbers they seem to make sense. I just hope they’re wrong.”
The people saying that we’re in deflation, I guess, don’t bother checking the price of gold or the price of gasoline.
For those of us who do, we know FULL WELL that the dollar is not buying anything near what it bought only a couple of years ago.
So, do we get “hyperinflation”...probably not in the sense of Zimbabwe...but will we get HUGE inflation, as in a tripling of prices (without wages climbing) - hell, yea, and like you say, it’s the only outcome possible after you run the numbers and find out that most of the geezers even here are not willing to give up a dime of the precious Social Security checks, even if it leaves us as a Third World country.
What about post 9? Never heard that before in the inflation vs deflation argument...
Bad Fundamentals are not hyperinflation. There still are deflationary forces out there too. That is not a good thing for us or the economy. Fighting deflation with inflation is like helping someone trapped against a huge rock by crushing him with a bulldozer. The inflation can crush the economy again.
Right now we have the 2007 inflation oil and food without the housing bubble(BTW : the bubble itself was bad too.), and neither had wage inflation. Jim Rogers predicted this in a post I did early 2009 when he advised Asians to invest in production of both.
I pinged Southhack because he always gives me grief when I post that we have inflation.
I think I can survive on 3x the prices. But if it’s like the Glen Beck scenario of 64 dollar orange juice then it’s lights out.
bfl
“What about post 9? Never heard that before in the inflation vs deflation argument...”
I addressed Post 9 when I said that we will not go the way of Zimbabwe as our debt will simply disappear if we print enough currency - since the debt is in dollars. But it will cause real prices to triple, as that much currency is needed to deal with the debt load.
Iceland, however, got stuck the other way. The loans they all had were in Euros and people were stuck watching their loan balances increase as their currency died. In the end, they just blew off the loans...fortunately for everyone, they were small enough not to impact the world economy.
Hi blam. I’ve seen nothing that changes my outlook for about 10 years of stagnation and mild deflation.
Not that that’s any bed of roses either...
“I think I can survive on 3x the prices. But if it’s like the Glen Beck scenario of 64 dollar orange juice then it’s lights out.”
I think I could survive 3x also...and the 3x really only applies to fully imported stuff (where we have to pay the world price with a very weak currency). For stuff with US content (what little we have left), that new price will likely be more like 1.5x.
The problem for the country is the other 98.5% of the people that will have to give up serious necessities if prices go up that much. They will have a fit.
Okay, thanks for the input.
How do we pay the debt with stagnation and deflation that won't generate enough tax/income to pay the debt....it's got to be paid, right?
Your best bet is to send it to me. I will hold it for you.
The luxuries of one generation are the necessities of the next.
In the grand scheme of things, even electricity and running water are luxuries, not necessities.
All of those countries had major debt denominated in a currency which was not their own.
The Weimar Republic had it forced upon them through the Treaty of Versailles.
“cool, I’ll sell off a few ounces of gold and pay off my mortgage. Then I guess I’ll be raising chickens and goats. maybe some rabbits. Bring it.”
Survival Chickens! I’m breeding mine.
http://www.survivalblog.com/2008/02/the_home_chicken_flock_for_sel.html
“The luxuries of one generation are the necessities of the next.
In the grand scheme of things, even electricity and running water are luxuries, not necessities. “
No kidding. The rich robber-barons of 100 years ago would be SHOCKED to see how today’s poor live.
But even so...the idea that these people will take a decline to 3rd world standards in stride is a stretch, I think, for all of us.
A lot of regional and state level banks would go under.
Thanks.
Any time...I love people who ‘cut’ Commies.
And Bill Gates will be selling Goats 2.0. Just like the old goat, but with a little better look-and-feel!
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