Off the microphone of RE
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Snippet:
…What the CBs and Financial Pundits like Ambrose Evans-Pritchard are TERRIFIED by now is apparent DEFLATION through numerous of the micro economies throughout Eurotrashland. Prices are FALLING! Horrors! Even in SWEDEN prices are falling! This really gets nasty in the world of Real Estate, because falling prices put many McMansion “Owners” underwater, where they owe more than the box is worth on the market. Combine that with defaults and foreclosures (which actually are the cause of the falling prices) and banks get stuck with a lot of White Elephants they can’t sell.
To solve THAT problem, the Cbs start offering up lots of low interest money to the well connected to go buy the junk and keep the prices propped up, leading to Hedge Funds like Blackrock getting into the rental bizness, which generally is a nightmare to run….
For the rest, listen to the RANT!
RE
The “Deflation is evil” propaganda is the stupidest conclusion in economics. When have people ever rioted & started a revolution because things became fucking cheaper? When have U ever known anyone to get mad at prices going down for food, goods, etc.
A trip to Jamaica now costs me $100? My money keeps buying more & more? Now I’m pissed off!
It’s about as logical as a population getting mad because criminals started giving out money & breaking into your house & fixing things.
Deflation is a make believe story.
There will be inflation if the CB`s print it and give it to the sheeple. They are riding a tiger and don`t know how to get off.
“Deflation is Evil” doesn’t seem Evil to J6P, but it certainly seems Evil to Economistas like Ambrose Evans-Pritchard, Helicopter Ben, Mario Draghi…et al. You can’t keep a monetary system such as this one running if you don’t inflate it, then periodically deflate it. As Thomas Jefferson wrote:
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
If TPTB want to continue to run this monetary system, it HAS to be deflated. The Inflation has been ongoing for quite some time here, and it is going exponentially ballistic now. That is a failure point.
Of course, lack of available resources this time make a reboot pretty questionable.
RE
I think you make a number of valid points but DUDE!!! Your site has become home to a select group of mind wasting melon flower casserole bigots
What is a “melon flower casserole bigot”?
RE
“The “Deflation is evil” propaganda is the stupidest conclusion in economics.” —- Econman
Inflation and deflation are extremes. The market likes stability.
It may be good for YOU if Stucky’s Spitzbuben cookies sell for half price …. not so good for ME. Not so good for you in the long run either … I might just stop making them.
If Stucky as a $10,000 credit card debt (I don’t) I’d rather pay it with inflationary dollars. Paying back debt with delationary dollars would be very bad for me …. especially on things like a mortgage.
Contracts are set in nominal terms …. NOT real terms. So when real prices change there are ALWAYS winners and losers. When prices go up, sellers and debtors are winners …. buyers and creditors are the losers. That’s easy to understand. The reverse happens with deflation …. the sellers and the debtors turn into losers.
In deflation scenario businesses can get fucked in a real hurry.
LIFE’S A BEACH, AND THEN YOU FRY!
Deflation is an economic low tide that will leave many gasping, flopping and dying on the beach of life. We are most likely in for something worse than the 1930’s, something less than TEOTWAWKI.
To summarize, we will probably go through a number of crash-and-bailout cycles before the ultimate ‘clog, seize up and collapse completely’ scenario — probably each one progressivey worse, but accompanied by some complacency based on previous outcomes. Bernanke was the only the first to attempt a delation-neutralizing monetary strategy, and it probably worked out for him as well as it ever will in the future.