I haven’t watched this yet, but my prepper pals from Okie land sent it to me in an “urgent” message, so I wanted to make sure it was available to watch later. I like Maloney’s videos and find them interesting, even if he’s selling his own stuff in the end.
The Absolutely Deplorable Fiatman60
October 6, 2016 12:06 pm
Excellent post Maggie!!
We are definitely in the “pent up” stage now. That includes all corporations who are not spending on upgrading their productivity but rather do stock “buy backs” and reward CEO’s with outrageous compensation.
Ordinary people are not spending any money other than the idiots who are maxing out their credit cards with essential “must haves”
The last part of the post is the best…. when all that money comes home to roost AFTER the hyper inflation has already reared it’s ugly head here at home! It’s going to get REAL interesting……….
Rob
October 6, 2016 1:32 pm
I went into Starbucks yesterday to get a coffee and asked if they could break a $100 bill. The old lady behind the counter, you know, the one with a masters in Women’s Studies, she smiled sheepishly and pointed to the drawer. Not a single $20. Only one $10 and some fives and ones. Starbucks doesn’t use money any more. They found that people come in and steal it if it is there so they don’t want it to be there. This is a corporate wide policy as far as she knew. Luckily, I had one more $20. And even that gave her a hard time.
Deflation is not exclusively a product of lower velocity of money.
Credit deflation is actually the evaporation of monetary wealth that did not exist in the form of banknotes. It is what happens when a bank bails in your deposits. It’s what happens when the credit card company pulls back some or all of your unused credit limit. It’s what happens when firms stop offering to sell you their wares unless you pay for them RIGHT NOW.
Yes, it’s controlled by psychology and cycles (and waves.)
He talks about “currency” being created by the Fed, but what he means is credit. Central banks in the modern world create very little paper banknote money. Almost all of the money supply growth has been bank credit.
-Unused credit balances on credit cards.
-Secured or unsecured loans from banks.
-Margin debt available from brokerage firms.
-Corporations issuing bonds (debt) so they can repurchase their shares.
-Exotic “investments” in the derivatives market where original capital required maybe very, very small, and leverage of the “investment” very, very high.
All of this is credit as it exists.
Shrink the amount of credit available and the money supply shrinks. Add in rising worry and the velocity of money will collapse even more (it’s already very, very low.) This will reduce the monetary demand across most, if not all markets and prices will fall if sellers still need to sell. And they will.
This will be a feedback loop until the amount of debt outstanding is deemed trustworthy enough to accept. It could be but a TINY slice of what exists now.
Gold and silver should fall. They are small markets, though, so who knows? I think they’ll rise, then fall, and when they reach their lows during the depths of the deflation it will be imperative to load up on them. And on other STUFF (real things, things you will want to own, and things other people will want to own in a few years after that. Your guess is as good as mine….)
TPTB CANNOT fill every crack with currency. Not at $100 per bill. The USA cannot run its economy on banknote cash. The path ahead has to include passing through a valley of “collapse of wealth.” What people THINK they have must mostly burn to a stub. This means their home may lose 95%, their stocks may lose 99%, their metals may lose 50%, their bank accounts are bailed in to the tune of 90 cents on the dollar, and their pension promises are reduced by 95% or more.
dc.sunsets
October 6, 2016 2:30 pm
diogenes, I expect in a few years to be able to buy CCI Mini-mags for 2-3 cents per round. Why? Because all the folks today lining their basement walls with cases of them (so I can’t find any) will be desperate: No job. Bank won’t give them but a pittance of their deposits per week. Government handouts dried up. Gas, at $0.15/gal, is still too expensive because they already shook the couch cushions for change in order to buy milk for the kids.
Desperate people will sell everything they own to obtain MONEY. This is the huge paradox of our times. The Wiemar Republic (and Zimbabwe) inflation is NOT the relevant historical precedent.
This time it really is different. There has never been a credit bubble this big, a debt ocean this broad and deep, and a ruling elite this smug and stupid.
All roads lead to a collapse in monetary wealth. This means that real stuff will simply be worth a lot less money, but vis-a-vis other stuff it will be business as usual. Most prices may fall 90% or more.
But like I said, people will be desperate for money. Money to stay solvent, to pay for essentials, to avoid bankruptcy and foreclosure and repossession (or dispossession…it was TAX LIEN SALES that put most people out of their property in the 1930’s. Your government will not stop robbing you just because you fell on hard times.)
Once the turn comes, any attempt to increase credit will fail.
Eventually, Congress will seize the Fed and attempt to reflate the economy with banknote cash, and eventually they’ll print $1,000 bills, then $10,000 bills, and even $1,000,000 bills may be printed for inter-bank accounting.
Zimbabwe style hyperinflation will march across North America.
Overall, I concur with a lot of this video. Of course, I don’t know the future. I give no warranties. All we know is that it will be a challenging time.
Alter Boyz
October 6, 2016 3:44 pm
How many gold and silver salesman does it take to screw in a light bulb ?
Any one else tired of these guys ?
Mark
October 6, 2016 6:05 pm
The video has nuggets of truth in a closed system. Namely, the old way of looking at the global economy as independent non correlated entities. Without a broader context of an interdependent global economy that relies on capital flows where the Dollar is the international currency.
As the EU collapses , the big money will seek refuge in buying up US assets to preserve wealth.
Remember folks, emerging markets borrow in dollars because the interest rates are much lower. But, the strengthening dollar will make those low interest loans much more expensive. Those economies will also go bust.
There won’t be much for the U.S. to export and the competive pressure for US manufacturing even in the domestic market will be rough. As the U.S. dollar becomes much stronger.
The scarcity of jobs in the new recession will be enough to turn the velocity of money down.
The government needs to swap out its debt for private assets. And corporations need to swap out their debt for equity.
The end result will mean the government will not be able to spend more then they take in taxes. People are going to live in reality. However, if people are assured that their wealth is being preserved via the swap in a private asset or assets , confidence of the future can be restored.
Maggie
Author
October 6, 2016 6:14 pm
Thanks Mark. So many of us want to know WHEN. But in the final end game, those of us who were/are ready WHENEVER will move on through it.
Somehow. I like Maloney, even though I’ve never spent a dime at his firm or any of his advertisers.
Mark
October 6, 2016 6:25 pm
Maggie the EU can’t hold much longer. I don’t think our political system lends itself to radical changes of debt to equity swaps. And all the necessary cut backs in taxes and government spending .
We are going to have to crash and burn. And the military is going to have to step in and institute these changes.
The military may step in, but it is an astonishing illusion to think people who work in a hierarchical monopoly supported by taxes are qualified to make such changes.
The past 50 years have been one kind of adventure. The next 100 years promise to be a different kind of adventure. I just wish I knew where to go, when to go, what to do, etc. So instead, I’ll stay here and hope for the best.
Lysander The Deplorable
October 6, 2016 11:23 pm
In a hyper inflationary economy, what happens with wages? I would imagine that wages would have to soar upwards with the costs of goods and services, but how? How would it be determined? In a free for all of one Burger King out bidding another one for workers?
Another question: As inflation takes off in a big way, wouldn’t the .gov declare a national emergency and implement wage and price controls? I know they wouldn’t work and would further the growth of the black market, but I wonder if they wouldn’t do it as a stop gap to buy them time.
And yet another question: What do you suppose all the EBT card holding FSA pavement apes will be doing as this shit goes down? Okay….that was rhetorical….we all know what will happen, lol.
I haven’t watched this yet, but my prepper pals from Okie land sent it to me in an “urgent” message, so I wanted to make sure it was available to watch later. I like Maloney’s videos and find them interesting, even if he’s selling his own stuff in the end.
Excellent post Maggie!!
We are definitely in the “pent up” stage now. That includes all corporations who are not spending on upgrading their productivity but rather do stock “buy backs” and reward CEO’s with outrageous compensation.
Ordinary people are not spending any money other than the idiots who are maxing out their credit cards with essential “must haves”
The last part of the post is the best…. when all that money comes home to roost AFTER the hyper inflation has already reared it’s ugly head here at home! It’s going to get REAL interesting……….
I went into Starbucks yesterday to get a coffee and asked if they could break a $100 bill. The old lady behind the counter, you know, the one with a masters in Women’s Studies, she smiled sheepishly and pointed to the drawer. Not a single $20. Only one $10 and some fives and ones. Starbucks doesn’t use money any more. They found that people come in and steal it if it is there so they don’t want it to be there. This is a corporate wide policy as far as she knew. Luckily, I had one more $20. And even that gave her a hard time.
What the hell are you going to Starfuck for?
Stacking lead and silver
Deflation is not exclusively a product of lower velocity of money.
Credit deflation is actually the evaporation of monetary wealth that did not exist in the form of banknotes. It is what happens when a bank bails in your deposits. It’s what happens when the credit card company pulls back some or all of your unused credit limit. It’s what happens when firms stop offering to sell you their wares unless you pay for them RIGHT NOW.
Yes, it’s controlled by psychology and cycles (and waves.)
He talks about “currency” being created by the Fed, but what he means is credit. Central banks in the modern world create very little paper banknote money. Almost all of the money supply growth has been bank credit.
-Unused credit balances on credit cards.
-Secured or unsecured loans from banks.
-Margin debt available from brokerage firms.
-Corporations issuing bonds (debt) so they can repurchase their shares.
-Exotic “investments” in the derivatives market where original capital required maybe very, very small, and leverage of the “investment” very, very high.
All of this is credit as it exists.
Shrink the amount of credit available and the money supply shrinks. Add in rising worry and the velocity of money will collapse even more (it’s already very, very low.) This will reduce the monetary demand across most, if not all markets and prices will fall if sellers still need to sell. And they will.
This will be a feedback loop until the amount of debt outstanding is deemed trustworthy enough to accept. It could be but a TINY slice of what exists now.
Gold and silver should fall. They are small markets, though, so who knows? I think they’ll rise, then fall, and when they reach their lows during the depths of the deflation it will be imperative to load up on them. And on other STUFF (real things, things you will want to own, and things other people will want to own in a few years after that. Your guess is as good as mine….)
TPTB CANNOT fill every crack with currency. Not at $100 per bill. The USA cannot run its economy on banknote cash. The path ahead has to include passing through a valley of “collapse of wealth.” What people THINK they have must mostly burn to a stub. This means their home may lose 95%, their stocks may lose 99%, their metals may lose 50%, their bank accounts are bailed in to the tune of 90 cents on the dollar, and their pension promises are reduced by 95% or more.
diogenes, I expect in a few years to be able to buy CCI Mini-mags for 2-3 cents per round. Why? Because all the folks today lining their basement walls with cases of them (so I can’t find any) will be desperate: No job. Bank won’t give them but a pittance of their deposits per week. Government handouts dried up. Gas, at $0.15/gal, is still too expensive because they already shook the couch cushions for change in order to buy milk for the kids.
Desperate people will sell everything they own to obtain MONEY. This is the huge paradox of our times. The Wiemar Republic (and Zimbabwe) inflation is NOT the relevant historical precedent.
This time it really is different. There has never been a credit bubble this big, a debt ocean this broad and deep, and a ruling elite this smug and stupid.
All roads lead to a collapse in monetary wealth. This means that real stuff will simply be worth a lot less money, but vis-a-vis other stuff it will be business as usual. Most prices may fall 90% or more.
But like I said, people will be desperate for money. Money to stay solvent, to pay for essentials, to avoid bankruptcy and foreclosure and repossession (or dispossession…it was TAX LIEN SALES that put most people out of their property in the 1930’s. Your government will not stop robbing you just because you fell on hard times.)
The question is…What will be money?
Once the turn comes, any attempt to increase credit will fail.
Eventually, Congress will seize the Fed and attempt to reflate the economy with banknote cash, and eventually they’ll print $1,000 bills, then $10,000 bills, and even $1,000,000 bills may be printed for inter-bank accounting.
Zimbabwe style hyperinflation will march across North America.
Overall, I concur with a lot of this video. Of course, I don’t know the future. I give no warranties. All we know is that it will be a challenging time.
How many gold and silver salesman does it take to screw in a light bulb ?
Any one else tired of these guys ?
The video has nuggets of truth in a closed system. Namely, the old way of looking at the global economy as independent non correlated entities. Without a broader context of an interdependent global economy that relies on capital flows where the Dollar is the international currency.
As the EU collapses , the big money will seek refuge in buying up US assets to preserve wealth.
Remember folks, emerging markets borrow in dollars because the interest rates are much lower. But, the strengthening dollar will make those low interest loans much more expensive. Those economies will also go bust.
There won’t be much for the U.S. to export and the competive pressure for US manufacturing even in the domestic market will be rough. As the U.S. dollar becomes much stronger.
The scarcity of jobs in the new recession will be enough to turn the velocity of money down.
The government needs to swap out its debt for private assets. And corporations need to swap out their debt for equity.
The end result will mean the government will not be able to spend more then they take in taxes. People are going to live in reality. However, if people are assured that their wealth is being preserved via the swap in a private asset or assets , confidence of the future can be restored.
Thanks Mark. So many of us want to know WHEN. But in the final end game, those of us who were/are ready WHENEVER will move on through it.
Somehow. I like Maloney, even though I’ve never spent a dime at his firm or any of his advertisers.
Maggie the EU can’t hold much longer. I don’t think our political system lends itself to radical changes of debt to equity swaps. And all the necessary cut backs in taxes and government spending .
We are going to have to crash and burn. And the military is going to have to step in and institute these changes.
The military may step in, but it is an astonishing illusion to think people who work in a hierarchical monopoly supported by taxes are qualified to make such changes.
The past 50 years have been one kind of adventure. The next 100 years promise to be a different kind of adventure. I just wish I knew where to go, when to go, what to do, etc. So instead, I’ll stay here and hope for the best.
In a hyper inflationary economy, what happens with wages? I would imagine that wages would have to soar upwards with the costs of goods and services, but how? How would it be determined? In a free for all of one Burger King out bidding another one for workers?
Another question: As inflation takes off in a big way, wouldn’t the .gov declare a national emergency and implement wage and price controls? I know they wouldn’t work and would further the growth of the black market, but I wonder if they wouldn’t do it as a stop gap to buy them time.
And yet another question: What do you suppose all the EBT card holding FSA pavement apes will be doing as this shit goes down? Okay….that was rhetorical….we all know what will happen, lol.