Deflation

They're talking about possible deflation again in Japan and even Europe, who knows maybe the US next or at least not the inflation rate the Fed wants.

I have to tell you, I was sure we would be living in a world of inflation these last few years instead, starting around 2010. Maybe horrendous inflation. Thank God I didn't really act on these hunches.

A huge reason we have not seen more inflation is the game the Feds have played to reacapitalize the banks after the massive losses in 2008.

Banks walk up to the window at the Fed and borrow at 0.50%. Then either use it to refinance a mortgage at 4-4.5% which they then unload to Freddie and Fannie or just buy Treasuries in the 2%s.

Either way it is just moving funds around on paper and nothing more.

But the inflation is out there, those that deny it do not do the grocery shopping for their families.

Quote: AZDuffman

A huge reason we have not seen more inflation is the game the Feds have played to reacapitalize the banks after the massive losses in 2008.

It might show how I get confused in the first place, but seems to me this should cause more inflation, not less inflation.

Quote: AZDuffman

But the inflation is out there, those that deny it do not do the grocery shopping for their families.

I don't deny it; we do not have deflation here, but inflation. For anyone who's income is not keeping up, it's hard to believe deflation is worse for the country. But it is.

Quote: AZDuffman

But the inflation is out there, those that deny it do not do the grocery shopping for their families.

Indeed. Always worth tracking that basket of groceries. It's also worth seeing what the cause of that inflation is.

Quote: AZDuffman

But the inflation is out there, those that deny it do not do the grocery shopping for their families.

I'm seeing prices going up constantly. Meat is
out of sight. Dairy, canned goods, it's all going
up. I see breakfast cereal and wonder how people
can afford to eat it every day. Pet food has smaller
and smaller bags for the same price. What used
to buy an 18 pound bag now buys a 13 pound.
A package of polish sausage that was 2.49 for
16oz, is now 2.89 for 13oz.

all these things are true, I have been complaining too. But we may be making the mistake of assuming the past will be the future. The financial folks are raising eyebrows over some strange stuff like Germany's bonds going lower than 1% yield [briefly]. Deflation talk is around. Last month you could have gotten me to go on a rant about increasing prices. Today I am marveling that hyper-inflation not only has not set in but that there could be such talk.

OK, yeah maybe tomorrow they will be singing another tune.

Quote: odiousgambit

It might show how I get confused in the first place, but seems to me this should cause more inflation, not less inflation.

It would if the banks were lending and people wanted to borrow. They don't and they don't. 2003-2007 consumers loaded up on mortgage debt for all kinds of things which drove growth. Now they go deeper into debt to slightly lower their monthly payments. Nothing is being created.

Quote:

I don't deny it; we do not have deflation here, but inflation. For anyone who's income is not keeping up, it's hard to believe deflation is worse for the country. But it is.

People think deflation will be cool because they assume things will cost less next year but they will make the same. They do not realize it drives investment to a halt.

Deflation is UGLY. Inflation, as a low level is useful as it drives investment in the now (time cost of money and all that).

Quote: TheCesspit

Indeed. Always worth tracking that basket of groceries. It's also worth seeing what the cause of that inflation is.

http://www.zerohedge.com/news/2014-09-07/how-much-trillion#comments

According to Liar Bill, its simply a matter or hedonics. "If meat costs too much they will simply eat chicken" The old "let them eat cake trick"

The ptb have printed us into a corner. If just one of the monster estimates of the bank bailouts [12 trillion] would have been just handed out to the people of the US [much like Bush's cash for clunkers program] it would have been enough to pay off EVERY mortgage in the country. Now that would be stimulous. Only that would have been bottom up instead of top down, or [trickle down]. Think how that would have affected the economy, if all the wage slaves didn't have to worry about the roof over they're and their children's heads.

It would have evened the playing field a little bit between the wage slaves and the free shit army.

The news propaganda is nothing but distraction with commercials. As Nero knew "keep them fed and entertained". This must have the oligarchs squirming a bit in their seats though, this time the Luddites are armed.

Edward Bernays is the father of modern media programming, if you arn't familiar with who he is, it is working.

The only difference between the left/right is which pocket they are extracting the herds capitol from. The only reason for elections is to fool the slaves into thinking they have choice.

Quote: petroglyph

The ptb have printed us into a corner. If just one of the monster estimates of the bank bailouts [12 trillion] would have been just handed out to the people of the US [much like Bush's cash for clunkers program] it would have been enough to pay off EVERY mortgage in the country. Now that would be stimulous. Only that would have been bottom up instead of top down, or [trickle down]. Think how that would have affected the economy, if all the wage slaves didn't have to worry about the roof over they're and their children's heads.
.

Forgetting the problems it would cause in the financial industry the wage slaves would mostly end up back where they started. The irresponsible ones would have rushed for a HELOC to drop all their other debt on and I would have been working 65 hour weeks to process all the applications.