If anybody wants to know why your food and energy costs are going higher, this is why.
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Global Financial Crisis (8 Viewers)
- Thread starter Dostoevsky
- Start date
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Not really.
"Throwing" the money into the system from reserves won't cause hyperinflation. Hyperinflation will be seen when country wants to solve their insolvency by printing money, which is something else.
When they throw more money into the system you will see higher interest rates so they don't mess with the prices, so it would be restrictive politics. When you can smell recession it has to be done that way.
Federal reserves aren't something bad. All the money banks get they have to send 10% to a central bank which later coordinates with it.
"Throwing" the money into the system from reserves won't cause hyperinflation. Hyperinflation will be seen when country wants to solve their insolvency by printing money, which is something else.
When they throw more money into the system you will see higher interest rates so they don't mess with the prices, so it would be restrictive politics. When you can smell recession it has to be done that way.
Federal reserves aren't something bad. All the money banks get they have to send 10% to a central bank which later coordinates with it.
Yes, I meant the printing presses. That's what quantitative easing is all about. Whether it be the actual printing of money, or adding a few digits to electronically created "money", downward pressure on the currency arises and all those dollars have to flow somewhere. In this case, banks are putting those excess reserves into buying physical assets like commodities.
Now, the debate surrounding hyperinflation is that to have it, you need an environment where wages are also rising. We currently have depressed wages and an over supply of workers, so deflationistas are saying it's impossible to have hyperinflation in our current economy. But I think this logic is flawed. We have already seen the US dollar index beaten down past 74 support, commodity prices are soaring even without a major increase in demand, and it's all because of the FED's Zero Interest Rate policy and the QE1/QE2 money printing shenanigans debasing our currency in terms of gold and other assets. If the primary goal of these QE's is to fund the federal budget deficit (which politicians will never seriously address) and inflate away our debts, the FED might issue a QE3, QE4, or QE Infinity, and with each of those they will debase the currency even more. So there will come a point where this devaluation won't be so orderly anymore and a mass exodus from the currency will occur. It's happened before, it can happen again. Who cares what your wages are when the dollar loses 90% of it's value and the only solution the government has is to print more money.
I guess the one saving grace for the dollar is that it's the world reserve currency, so you have an artificial demand for dollars to purchase oil and other commodities. But it's becoming less and less desirable for foreigners to do business in dollars, so the world reserve status won't be there forever.
Now, the debate surrounding hyperinflation is that to have it, you need an environment where wages are also rising. We currently have depressed wages and an over supply of workers, so deflationistas are saying it's impossible to have hyperinflation in our current economy. But I think this logic is flawed. We have already seen the US dollar index beaten down past 74 support, commodity prices are soaring even without a major increase in demand, and it's all because of the FED's Zero Interest Rate policy and the QE1/QE2 money printing shenanigans debasing our currency in terms of gold and other assets. If the primary goal of these QE's is to fund the federal budget deficit (which politicians will never seriously address) and inflate away our debts, the FED might issue a QE3, QE4, or QE Infinity, and with each of those they will debase the currency even more. So there will come a point where this devaluation won't be so orderly anymore and a mass exodus from the currency will occur. It's happened before, it can happen again. Who cares what your wages are when the dollar loses 90% of it's value and the only solution the government has is to print more money.
I guess the one saving grace for the dollar is that it's the world reserve currency, so you have an artificial demand for dollars to purchase oil and other commodities. But it's becoming less and less desirable for foreigners to do business in dollars, so the world reserve status won't be there forever.
And it's so humorous how all this inflation is hidden to central bankers. They don't see it. Ben Bernanke doesn't see any inflation. I guess he hasn't looked at a chart of oil, soybeans, sugar, coffee, wheat, gold, silver... I mean gold has very limited industrial use whatsoever, yet it's still going higher. So that blows the whole "commodity prices are rising because of economic recovery" bullshit. But Bernanke only looks at his beautiful CPI number, which conveniently discards stuff that people don't really need, you know, like those useless things of food and clothes and energy, so no wonder why he doesn't see it.
He's not an idiot, though. He knows it's there. It's just that the middle class isn't who he works for.
He's not an idiot, though. He knows it's there. It's just that the middle class isn't who he works for.
Good article from the Telegraph:
http://www.telegraph.co.uk/finance/...alking-towards-disaster-does-no-one-care.html
http://www.telegraph.co.uk/finance/...alking-towards-disaster-does-no-one-care.html
Quantitative Easing is monetary policy used by central banks to increase the money supply by buying up its own government's debt. In the case of the FED, they have announced two different QE programs where they are buying up government bonds to "keep interest rates low and provide support to the housing market." But that hasn't really worked since the 10-year note, which is tied to mortgages, has gone up when these programs have been conducted. The FED and Bernanke knows it hasn't worked, so they are lying. The real goal of QE1 and QE2 is to finance the federal budget deficit and keep their Wall Street friends happy. How does it work? The FED buys these treasury securities from primary dealers (large investment banks), so they become the bondholders who receive interest payments from the US Treasury.
The other outcome of QE policies is the debasement of the currency, which you can see in the rising commodity prices we have currently.
It's all Ponzi finance.
The other outcome of QE policies is the debasement of the currency, which you can see in the rising commodity prices we have currently.
It's all Ponzi finance.
Bad News.
China to cut 2/3 of its $3 trillion USD holdings
http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
So, Japan is out of buying US government debt since the earthquake, and now it looks like China has had enough as well.
Who is going to buy our debt and finance our government spending? I guess our own central bank.
Whether they print or don't print, there is no way out of the coming economic pain.
China to cut 2/3 of its $3 trillion USD holdings
http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
So, Japan is out of buying US government debt since the earthquake, and now it looks like China has had enough as well.
Who is going to buy our debt and finance our government spending? I guess our own central bank.
Whether they print or don't print, there is no way out of the coming economic pain.
Silver is exploding to new highs again as the dollar gets trashed. Talk of an extension of QE2.
This chart of silver is a three-wave parabolic pattern with the third having the steepest slope. 99% of the time these parabolic rises come crashing down, so I wouldn't be buying silver right here, even though a lot of people are imploring you to.
This chart of silver is a three-wave parabolic pattern with the third having the steepest slope. 99% of the time these parabolic rises come crashing down, so I wouldn't be buying silver right here, even though a lot of people are imploring you to.
