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Author Topic:   Deflation And Hyperinflation. Could It Happen Here?
LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 16 of 33 (884349)
02-12-2021 7:45 PM
Reply to: Message 5 by Phat
02-10-2021 12:27 AM


Re: Handwriting On Wall Is A Metaphor
Inflation is not synonymous with the dollar's value against foreign currencies.

And the typical order of events generally has been inflation FIRST , then deflation SECOND.

But I should point out that a lot of wealth in the country will be in land, buildings, and stocks. It is not STOCKS & BONDS but stocks, bonds, buildings, land, etc.

(ALL inches of land will be claimed. Heck, it was even true back in the late 19th century. Little House on the Prairie was based on a family that could get no cheap land in Wisconsin, so the family went to the Diminished Indian Reserve in Kansas)

The population has grown, to today's levels,and now the stolen, claimed, sold, resold land ( yes, LAND) is surely the greatest chunk of the gross domestic asset total . Land values are explosive and much higher than ever.

I really wonder just how much punch an inflation increase throws nowadays. The somewhat diminished importance of inflation might explain the lack of it. It might be that it is just not so scary anymore, and perception drives values of so many assets. The only thing to fear is, well ...fear.

Edited by LamarkNewAge, : No reason given.

Edited by LamarkNewAge, : No reason given.


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LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 17 of 33 (884350)
02-12-2021 8:38 PM


Another general babble post.
Ever wonder what would happen if we traded the dollar for stocks 30 plus years ago? Put all dollars in a stock index.

The stock market ( Dow Jones, that is)did not hit 1000 until the late 1980s. Now it is around 30,000.

That is growth 30 times inflation.

What about the "crypto currency " Bitcoin. It went from less than $500 a coin,10 years ago, to $20,000 today.

40 times the value and while the $ had very little inflation , so there were no air bloating effects to explain such a shoot-out.

Granted the dollar is on a very grand scale compared to many assets it will be measured against. A government announcing a big federal asset investment will shoot the value of the targeted asset so fast that the purchase will come with an expensive premium.

So what is the point?

Investors are doing things with dollars( investments) and it will be a 100% hedge against inflation for many. I think the whole economy might be considered insulated from inflation for all sorts of reasons. Bond holders will be more at risk, if there really is large inflation, but who has everything invested in dollars ? Land and stocks bounce around like a yo-yo, but always go up long term. It all balances.

The national debt is high and higher and highest for sure. That is true everywhere. People still buy treasury bonds for stability when stocks are unstable. People like getting 0% interest if it means that a volatile stock market is blunted, so assets are protected.

It works!

Even with the seemingly monstrous innovation - Quantitative Easing - part of our new world. (Scary and unprecedented it may seem to be)

Edited by LamarkNewAge, : No reason given.


Replies to this message:
 Message 22 by Phat, posted 02-14-2021 3:49 PM LamarkNewAge has responded

  
LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 18 of 33 (884351)
02-12-2021 11:17 PM
Reply to: Message 1 by Phat
02-04-2021 3:41 PM


Deflation is more interesting than one might think.
Fernando Martin wrote an article on the history of inflation, and he showed a point of departure, in the suffering of deflation, just after World War 2. The inflationary periods, in the post World War 2 United States, were never followed by deflationary episodes. He tells us why.

Japan is an interesting story of a country that jacked up interest rates in the 1980s, which caused a deflationary spiral. This country ended up, as a corrective policy - nearly 2 decades later, inventing (I think this is accurate to say) Quantitative Easing, which has been proven to be able to hold interest rates at 0% WITH LOW INFLATION!

(Your Forbes article simple refers to Quantitative Easing as QE, and it is assumed that the abbreviation of the technical term is understood to be what it is, by the readers)

It should be pointed out that the great mass of web pages covering Deflation do not describe if as following am inflationary period. The typical reader will find the conditions surrounding deflation to be the complete opposite of a condition that is present during inflation. Truthfully , many things can cause deflation. To say anything about deflation's causes can set one up for a contradiction later.

Your Forbes article will simply show a bad economy's human victims needing a government to spend money to ease the pain, and the initial painful situation is described as deflationary. The government spending is presented as causing an increase in debt, with inflation coming from a currency that is eventually devalued. And the typical textbook definition of deflation will describe it as coming before inflation.

There is, in many situations, a pattern like that, but deflation-to-inflation, can be put into a circular motion where there is an infinite regress (deflation-inflation-deflation-inflation) and many of the examples are unique to given places and even periods. The theories can be circular if you developed them in a certain way. And a lot depends on how you connect the dots and group together the series of years and events. Plus gloss over and/or ignore many variable factors.

To me the biggest factor is what has been learned from the combined total of all of the experiences and lessons from the history of economic events. The broadest look at all the forms of situations - and in the least dogmatic mindset possible - is required.

The article seems to be based on a dogmatic belief in a scenario based on an economic-sclerosis type of theoretical and hypothetical outline - with a projection that WILL happen only if standard old stuff is implemented every step of the way by policy makers ( and it will require taking away, or ignoring, some of the fresh and vital new innovations like QE)

Edited by LamarkNewAge, : No reason given.

Edited by LamarkNewAge, : No reason given.


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LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 19 of 33 (884352)
02-13-2021 1:43 AM
Reply to: Message 18 by LamarkNewAge
02-12-2021 11:17 PM


Re: Deflation is more interesting than one might think.
There is a good article from InflationData.com editor Tim McMahon, Deflation and Depression Through the Years ( March 15, 2009)

He gives every single month in the 20th century there was deflation.

His expert commentary & analysis reaches essentially the same conclusion of senior economist Fernando Martin:

Martin said prices were overall stable through World War 2, but periods when the government took the nation off of metal currencies caused inflation, and the return to the metal standards tightened the money supply and caused deflation.

McMahon said the U.K. adoption of the Gold Standard caused the deflation that caused the Great Depression.

Martin said the post World War 2 avoidance of metal standards saved us from deflation.

NO DEFLATION has inflicted the United States since the Great Depression!

It was caused by tight money supply.

( I also have concluded that higher interest rates are a cause of deflation. Japan started its deflationary spiral due to higher interest rates)

McMahon said deflation follows inflation!

(Like Fernando Martin, who attributes all deflationary episodes to inflationary periods. Martin praised the post World War 2 period of limited inflation, and contrasted it to the pre-WW2 period of overall stable prices(with severe fluctuations at times, which eventually balanced out) caused by the metal standards)

I feel that there is not enough money in circulation to keep up with the exploding asset prices. The lack of inflation with ever more trillions of QE dollars pumped is proof. Deflation has been beaten down due to the rejection of metal currency standards, and we know that there are ways to get employment going ( Green New Deal, for one) in periods of high unemployment.

Edited by LamarkNewAge, : No reason given.


This message is a reply to:
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Phat
Member
Posts: 15223
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 20 of 33 (884378)
02-14-2021 2:36 PM
Reply to: Message 8 by Percy
02-11-2021 10:31 AM


A Bit Off Topic
Percy writes:

You've just introduced yourself as a topic of discussion. I won't comment on how smart you are, but we who have come to know you know that you're not analytical, rarely synthesizing a set of facts into a rational conclusion. Ideas either make sense to you or they don't, independent of reality.

Guilty. I do tend to go against the grain of logic and reason. The jury is still out on reality.

When it comes to spiritual beliefs, I go with what I have experienced. I cannot claim to know anything. jar always points out that there is no evidence for a Holy Spirit or a spiritual "war" and chalks it up to ignorant believers and con men. I will agtree that there are many con men in organized religion. I see the charlatans and know how to test what they claim with scripture. My critics go a step farthere and dismiss the ones I trust as part of the group.

Look, we have no evidencee apart from experience. I will show you a video of alleged deliverences from demonic influence. Feel free to question it, doubt it, and flat out accuse the participants as a fraud. I dont see evidence that they are acting. If they are, they are good actors.

EXHIBIT A:

EXHIBIT BDifferent pastor)

I doubt that many of you will bother listening to the 2nd video (a podcast) but I'm guessing that you will instantly label these ministers as willful con men. I do not get that same definite judgement, and the reason why is because you have never seen such stuff in real life whereas I have. (Plus you stick with lack of evidence as your belief)

This relates to inflation/depression/collapse only in that such a belief system globally may precipitate such a collapse.

And I grant that my extreme beliefs are illogical.

LETS TAKE THIS LINE OF DISCUSSION OVER HERE: Message 170

Edited by Phat, : No reason given.

Edited by Phat, : No reason given.


"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 8 by Percy, posted 02-11-2021 10:31 AM Percy has acknowledged this reply

Replies to this message:
 Message 21 by LamarkNewAge, posted 02-14-2021 3:01 PM Phat has acknowledged this reply
 Message 28 by ringo, posted 02-23-2021 11:28 AM Phat has responded

  
LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 21 of 33 (884381)
02-14-2021 3:01 PM
Reply to: Message 20 by Phat
02-14-2021 2:36 PM


Re: A Bit Off Topic
Try to stay on topic.

This discussion got derailed earlier; posters were wrong to make it sound like your OP predictions were contrary to standard economic theory.

Just make your case, while ignoring the generic (endless here, it seems) insults.


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Phat
Member
Posts: 15223
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 22 of 33 (884384)
02-14-2021 3:49 PM
Reply to: Message 17 by LamarkNewAge
02-12-2021 8:38 PM


Re: Another general babble post.
Keep in mind too that the value of stocks and bitcoins is measured in dollars. So which asset is actually tied to reality?

"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 17 by LamarkNewAge, posted 02-12-2021 8:38 PM LamarkNewAge has responded

Replies to this message:
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LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 23 of 33 (884385)
02-14-2021 4:02 PM
Reply to: Message 22 by Phat
02-14-2021 3:49 PM


Re: Another general babble post.
BITVOIN went up in dollars and every other currency.

They are all tied to reality.

We don't really know what completely drives inflation anymore, and I am talking about consumer prices in a United States store. I am not sure what completely drives the dollar's value anymore.

It seems that investors have to be attracted to a currency, for it to have value, but the bidding process is different now. Investors no longer solely drive interest rates up, due to QE. Now they have to accept low to no interest, while getting a "safe" asset to cushion ( or replace entirely) stock risks.

Investors still matter, but not to the same extent as before.

Rising interest rates are a form of a deflationary "direction", except it usually is to bring inflation toward balance( less inflation)


This message is a reply to:
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LamarkNewAge
Member
Posts: 1819
Joined: 12-22-2015


Message 24 of 33 (884386)
02-14-2021 4:07 PM
Reply to: Message 22 by Phat
02-14-2021 3:49 PM


Your hyperinflation scenario is based on...
a central bank refusing to raise interest rates to meet the markets demand for higher interest.

It will often involve defaults, as well.

There was nothing unreasonable about your concern. Interest rates are quite low.

Edited by LamarkNewAge, : No reason given.


This message is a reply to:
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Phat
Member
Posts: 15223
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 25 of 33 (884495)
02-22-2021 1:45 PM
Reply to: Message 13 by Percy
02-12-2021 11:44 AM


Re: Financial Charlatans & Religious Charlatans
Percy writes:

Better and more informed perspectives are called for. The US should be placed in the context of the whole world. The country's goal, however expressed in a slogan, should be economic opportunity, justice, fairness and healthcare for all.

Don't abandon your topic, which mentions both deflation and hyperinflation. You say little about deflation, but that possibility seems very real given how close to zero interest rates are, and given that the economy won't be mostly free of virus constraints for perhaps another six months.

And are you still including hyperinflation as a realistic possibility, defined as inflation exceeding 13,000% annually?

For now, I've backed off of suggesting hyperinflation, but I will introduce you to 4 "financial charlatens" who have what I consider to be reputable arguments regarding the demise of the US debt bubble.

I realize that many here at EvC want me to express what I present in my own words, but I simply cant at this time explain is as well as I hear it explained.

Im not demanding that everyone watch my videos, which many of you consider to be videos of Financial Charlatans & Religious Charlatans but I will honestly tell you that these people whom I select are to the best of my limited knowledge,intuition, and gut feeling to be at least considered without being written off as con-men. (And this is what I dislike about jars approach) He dismisses anything that challenges his assumptions. Granted Percy, I do that also, so I will plead guilty. But if you have a minute, I would appreciate a review of what my guys say. I will tell everyone here at the Forum that I do and have listened to some of what your guys say, even though I am dogmatically and practically opposed to what they "preach".


"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 13 by Percy, posted 02-12-2021 11:44 AM Percy has responded

Replies to this message:
 Message 30 by Percy, posted 02-24-2021 9:57 AM Phat has not yet responded

  
AZPaul3
Member
Posts: 5802
From: Phoenix
Joined: 11-06-2006
Member Rating: 3.0


Message 26 of 33 (884500)
02-22-2021 3:53 PM


The Baskets Are Coming!
So being the world’s foremost expert in all things economic I will now pronounce to all the world the god given reality that is our economic future yet to come.

The long feared collapse of the U$dollar is going to happen.

Just not so soon or so abrupt.

The U$dollar is the store of value for all the world’s wealth. There is no competitor.

There is not enough real estate nor gold nor both combined to store the present world wealth the U$dollar presently stores. As more switch to those other forms of wealth-storage there will be major increases in the value of each to the point that it will become insanely expensive to own either. And the trading of these things is done in increments of what? Micro grams and postage stamp sized suburban lots?

The Great Big Basket of World Currencies is a political nightmare waiting to happen on all the world’s national banks let alone the effort needed to keep the thing in value and stable all over the world at least most of the time. That’s difficult enough to do with the U$dollar throughout each trading day let alone a dozen or so currencies roiling and boiling all over everybody’s basket. Again, it will be done, but it is not going anywhere fast.

The central banks know what levers to push and buttons to pull to keep this capitalist tanker afloat and going on an ever increasing sea of liquidity. But they can’t keep it up for more than, I don’t know, another couple generations or two or three? 40, 80 +- years? The dire predictions we hear in this thread might actually come to pass given enough time.

What is going to happen quicker is the revolution. Not only an economic collapse but the societal collapse that caused it. Yeah … societal collapse, then economic. Shifting weather patterns, shifting social patterns, shifting economic patterns. More drought and sever winter storms. More social disparity. Pandemics. Famine.

Bring on the guillotine. War.

By the end of this century, certainly by the middle of the next, there may not be much need for either the U$dollar or a Great Big Basket of World Currencies.


Eschew obfuscation. Habituate elucidation.

Replies to this message:
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Phat
Member
Posts: 15223
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 27 of 33 (884513)
02-22-2021 6:46 PM
Reply to: Message 26 by AZPaul3
02-22-2021 3:53 PM


Re: The Baskets Are Coming!
Well what do you know???!!! You and I actually agree on something. I think it will happen quicker than you predict, but wouldn't mind being wrong about that at all!

"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 26 by AZPaul3, posted 02-22-2021 3:53 PM AZPaul3 has not yet responded

  
ringo
Member
Posts: 18986
From: frozen wasteland
Joined: 03-23-2005
Member Rating: 3.1


Message 28 of 33 (884534)
02-23-2021 11:28 AM
Reply to: Message 20 by Phat
02-14-2021 2:36 PM


Re: A Bit Off Topic
Phat writes:

I will show you a video of alleged deliverences from demonic influence.


Bob Larson? Are you kidding me? I had a discussion with that idiot many years ago, before the Internet. I wouldn't believe him if he said water was wet.

Phat writes:

Look, we have no evidencee apart from experience.


Sure we do. We have collective experience - which can be objective.

One of the most common phrases in the English language is, "Did you see that?" We crave confirmation. We should never trust unconfirmed experience.


"I've been to Moose Jaw, now I can die." -- John Wing

This message is a reply to:
 Message 20 by Phat, posted 02-14-2021 2:36 PM Phat has responded

Replies to this message:
 Message 29 by Phat, posted 02-23-2021 2:11 PM ringo has acknowledged this reply

  
Phat
Member
Posts: 15223
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 29 of 33 (884539)
02-23-2021 2:11 PM
Reply to: Message 28 by ringo
02-23-2021 11:28 AM


Re: A Bit Off Topic
ringo writes:

We have collective experience - which can be objective

I'm glad to see that you admit that collective experience can be objective.

Lets keep this thread focused on Deflation and Hyperinflation.

LETS TAKE THIS LINE OF DISCUSSION OVER HERE: Message 170

I apologize for allowing it to drift off topic.

Edited by Phat, : added redirection link


"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 28 by ringo, posted 02-23-2021 11:28 AM ringo has acknowledged this reply

  
Percy
Member
Posts: 20034
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.0


(4)
Message 30 of 33 (884550)
02-24-2021 9:57 AM
Reply to: Message 25 by Phat
02-22-2021 1:45 PM


Re: Financial Charlatans & Religious Charlatans
I'm not going to watch your video. Make your argument in your own words. If you can't even articulate and defend your position yourself, how good could your judgment be for selecting videos that you think do it for you?

Use your words. Your own words. Until you understand your position well enough to do that you shouldn't be advocating for it.

--Percy


This message is a reply to:
 Message 25 by Phat, posted 02-22-2021 1:45 PM Phat has not yet responded

  
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