 Z80APremium
join:2009-11-23 | reply to ArrayList
Re: Greece! said by ArrayList:said by dr3yec:Are you serious? This country is and has been broke for sometime. By the end of the year, our deficit is going to be 62% of the gdp. That is insane. for how manyhudred years? Until we simply print massive amounts of money to cover it and those dollars in your bank account become more and more worthless.
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"Our goal (was to make) a billion phones Flash-enabled by 2010...We're actually going to get 1 billion Flash-enabled phones by 2009." -Adobe Chief Technology Officer Kevin Lynch in Nov 2008. |
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wierdo
join:2001-02-16
Tulsa, OK | said by Z80A:Until we simply print massive amounts of money to cover it and those dollars in your bank account become more and more worthless. You might want to look out the window, bud. We're in a deflationary environment, not an inflationary one. We could print another trillion bucks and it wouldn't even begin to put a dent in the hole of dollars destroyed by our recent troubles.
Certainly the bond market isn't concerned about lending the US Government more money given the current yields on treasuries. Obviously deficit spending cannot continue at current levels for all that much longer, but predictions of hyperinflation are beyond premature.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word.  |
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Z80APremium
join:2009-11-23
4 edits | Alas, inventing only trillion dollars would barely cover 1/2 the year's deficit. They would have to invent 1.8T every year just to break even. Invent 10 trillion and see what happens.
Meanwhile bond yields are at or near lifetime lows and prices are at highs because everything else is a complete disaster. It isn't that bonds are now oh so safe and attractive. So long as the Chinese continue to loan, the gov't can hold off inventing massive amounts of money but they have already signaled their intent to stop. And then on to the printing presses for not a trillion, but trillions upon trillions.
Hyperinflation is a monetary event that happens very quickly, not an economic one. |
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wierdo
join:2001-02-16
Tulsa, OK | said by Z80A:Hyperinflation is a monetary event that happens very quickly, not an economic one. If you really think the two are that divorced, there's no sense in continuing to discuss this.
You can't have hyperinflation without either an extreme expansion of the money supply, which we haven't had nearly as much of as the doomsayers would have us believe or a severe contraction in economic output. We haven't had either of those things.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word. |
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Z80APremium
join:2009-11-23 | Extreme expansion of the money supply is a monetary event, not an economic one and it is coming most assuredly unless spending is cut drastically. And we both know that will not happen. |
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those dollars in my bank account are yen |
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wierdo
join:2001-02-16
Tulsa, OK | reply to Z80A
said by Z80A:Extreme expansion of the money supply is a monetary event, not an economic one and it is coming most assuredly unless spending is cut drastically. And we both know that will not happen. If you say so. You seem to be under the impression that the value of the dollar is not directly tied to our economic output relative to the world. By what other benchmark does a fiat currency have value?
Hyperinflation requires inflation, by definition. If we have little to no inflation, hyperinflation is a simple impossibility.
You should be more concerned about deflation, but as with half of the world, you seem to have decided for no particular reason that a deflationary environment is inflationary.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word. |
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| Last I check my check, my food cost more, my energy cost more and other necessities cost more too. So, how is this not inflation?
Why should we have to be concerned about deflation. How is deflation a bad thing? So my dollar can buy more today than yesterday is a bad thing? |
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Z80APremium
join:2009-11-23
1 edit | said by cw30000:Last I check my check, my food cost more, my energy cost more and other necessities cost more too. So, how is this not inflation? That is because the gov't conveniently leaves out food and energy from 'core inflation' statistics. It is easy to have low inflation when you ignore in-demand items subject to inflation such as food and energy. And for others like CPI, they're manipulated through "seasonal adjustments" and weighting.
Deflation is bad because it feeds itself. Deflation is bad for producers, thus they have to control costs by firing people leading to lower demand, lower prices and more firings; lower demand, lower prices and more firings...etc.
A far more likely short term scenario is stagflation...high inflation with little to no economic growth.
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"Our goal (was to make) a billion phones Flash-enabled by 2010...We're actually going to get 1 billion Flash-enabled phones by 2009." -Adobe Chief Technology Officer Kevin Lynch in Nov 2008. |
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jniamehrPremium
join:2003-10-09
Roslyn, NY | reply to ArrayList
+1 |
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wierdo
join:2001-02-16
Tulsa, OK | reply to Z80A
said by Z80A:A far more likely short term scenario is stagflation...high inflation with little to no economic growth. That, I can agree with.
However, it's plain to see that energy and food prices are well off from their highs.
As far as certain items being excluded from the core inflation number, energy prices are so volatile, that it makes sense to exclude it from core inflation. Added back in to the long term trend, it makes more sense, but when comparing month to month or quarter to quarter, energy and food just muddy the waters.
In any event, however you calculate it, inflation is extremely low at the moment and yields on government debt is extremely low. The low inflation combined with the low federal funds rate tells us that deflation is a reasonable possibility. The low yield on government debt tells us that those buying the debt don't think hyperinflation is a likely scenario.
Interestingly, if you look at corporate balance sheets, you'll notice most companies are hoarding cash like mad right now. If that reverses, it might be time to consider tightening the money supply.
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It's wierdo, not weirdo. Yes, I know that's not the 'proper' spelling of the similar english language word. |
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