Inflation vs. Deflation debate

[Jason]

Jason, here is your quote from above:



"Haven't total debt levels in the US been declining since 2008???"

I assume this is part of deflationary rational. So then.......

How then was Gold under 1000 an ounce in 08 (i think part of the year it was in the 700's.

And Silver was as low as like 10 dollars.

Look at those medals now.........

How does well over double in Gold and over quadripple Silver figure in if US Debt is declining?

p.s. one think I like about you Jason is you always give good replies and answers

I can give you Jason;s answer (correct me if I'm wrong, J-dawg) - "Speculation!"

Yes indeed!

Arguing inflation/deflation is like arguing which way the Wizard of Oz is going to twist that dial he has his hand on.

He can win either way - he and his friends can be invested in equities and commodities, and win with a "twist" of inflation. He can short the market and win with a "twist" of deflation.

The best you can do is figure out what is going to be to the biggest advantage to the man with his hand on the knob - and even then good luck as he is a master of deception and giving false indications of his intentions.

Sort of. There are definitely things they can control like markets via large bets (for which they and they alone have the amounts to move the market in significant directions). But there are other things they do not control like us. Sure they can try to influence us....but the reality is I control whether I print money today, tomorrow, or the next day (although they can do it for me via government). They can raise or lower the cost of debt, they can play with credit scores, they can may even ultimately kill credit as we know it. But I'm the one that decides to sign on the dotted line. I'm the one that decides to pay off debt. I'm the one that decides to incur more debt.

In the macro outlook....there are key indicators we can read to determine which way the wind is really blowing despite the market facade (and manipulation)...and make correspondingly appropriate decisions. Can we beat them at their game....me thinks not. But we can/should prepare for what we see as the eventual end point.

I will say this and would be interested in Jason's take - yes public debt is exploding while private debt is being paid down - even outpacing the government's spending. I'll grant you - that is NET deflationary.

However, I think you are not looking at the whole picture/endgame. This means that while the public is getting rid of cash to get out of private debt - the government is offsetting a large part of that with spending - this means that the recipients of government money - MIC, other favored groups such as green energy and family/friends are gaining a growing stack of money that they are not circulating and thus they are sitting on a pile of cash - so if we have a deflationary crash, aren't they going to be buying up devalued assets for pennies on the dollar - with OUR TAX MONEY? Or maybe this is your point in that this is the final asset transfer - the question is, what is the smart move what can we do in such an apparently no win situation?

Part of the decline in debt is due to write-off....and not necessarily debt pay offs. Which as LIT has pointed out....isn't deflationary. Nor is it inflationary as the inflation already occurred with the origination of the debt and injection of the money into the system. Thus forgiveness of all debt (while retaining assets and ability to produce) would mean zero inflation or deflation. If more debt was incurred (we think we are good for another shot at bankruptcy)...then we would have inflation.

I look at the picture in terms of government and private as being one pocket. Government doesn't produce...and is a service to the people....as well as being the collective representation (whether its really representational or not). So government can borrow...but the ultimate obligation is still borne by the people....so effectively the people are borrowing via another vehicle. The problem as OI points out....is the debt/money is not distributed equally....nor is control equal. So what happens is some businesses die and others thrive based on the flow of debt/money. Another tool.

That's the whole point of oppressive government - the control or use of force to decide who gets what. That's why the government is so heavily invested in every major industry in the world....and have created legal control points to dictate where money flows (FDA, USDA, Fanny, Freddie, etc etc etc). Whoever controls the government....controls the flow of money via legal schemes....and can profit accordingly. Another reason the only legal insider trading is via our "representatives" in Congress. Why else would a person spend millions for a $75k per year job??? The reality is....because they can make millions trading with the insider knowledge they will obtain concerning where the money will flow...as well as making some of those decisions directly.

So in our current debt saturated deflationary environment - If some people can force debt upon others (who are already buried - thus hastening their default) while seeing that the proceeds of that debt go to someone else (prolonging that person's default or allowing them to buy the defaulted assets at pennies on the dollar)...it gets pretty nasty in a hurry. Which is what is happening. A real no win situation....unless you are buddies with dirty rotten scoundrels.

Smart moves?

Change representation to selfless individuals willing to sacrifice their opportunity for wealth to go with the best interests of their electorate - a long shot with the likes of ES&S and DVS...not to mention the macro scenario of people desperate to service debt while current representation controls the flow of debt/money (thus able to buy off or persuade others who selfishly sucker themselves in - mass media, propaganda, public relations, kickbacks, back scratching, etc).

Get mad and violent and shoot them all and start over.....just a thought.

Wait for the collective ability to borrow to reach its limits....such that they will fight each other as the game of musical chairs gets dramatic....and hope they kill each other off in the process....so can start over. This would include the majority of the masses who have participated in the combinations to obtain wealth from others....but who find themselves getting cut out (back stabbing)....and thus start really stabbing anyone they can get their hands on as a response. I think this is fairly well documented in history as one of the logical conclusion points of wickedness.

Seems to me it will be the latter....and I don't think we have too long to wait....although there is still a gap to be bridged between now and then. In my mind the best way to survive the gap is food storage, means of food production, having or obtaining the ability to produce other related stuff (shelter, energy, protection, and other basic needs), getting/staying out of debt (don't contribute new money, destroy money, and thus hasten the demise), some savings (as money gets harder and harder to come by), etc. I think most of which (if not all) has been recommended by the prophets as well as the prophecies concerning the end point for the current system.

Super Committee members get $83K in contributions
http://www.theunion.com/article/2011100 ... ofile=1053" onclick="window.open(this.href);return false;

[Original_Intent]

Wasn't Continental Scrip government (not banker) controlled fiat, and didn;t it die an inflationaery death quite quickly and started the phrase "not worth a continental"?

The market should control money creation, not government. (Yes the constitution grants money making power but in that case it is gold and silver - there is no "create money out of thin air power.) I do think a fiat currency could work if somehow the market controlled the amount created strictly. It isw a power that cannot be entrusted to any man or group of men, and there should be no ability other than the market to select winners and losers in the business sector.

Anything else either boils down to or morphs into a secret combination.

[iamse7en]

Yes, any system will be abused, but market forces allows for least abuse, whether in phones, food, or the money service. Supply, demand, and price of lending money should be market-determined. Central planning doesn't work, whether its done by the Rothschilds or the Harry Reids.

[Jason]

Wasn't Continental Scrip government (not banker) controlled fiat, and didn;t it die an inflationaery death quite quickly and started the phrase "not worth a continental"?

The market should control money creation, not government. (Yes the constitution grants money making power but in that case it is gold and silver - there is no "create money out of thin air power.) I do think a fiat currency could work if somehow the market controlled the amount created strictly. It isw a power that cannot be entrusted to any man or group of men, and there should be no ability other than the market to select winners and losers in the business sector.

Anything else either boils down to or morphs into a secret combination.

Well the fact that England was shipping ship loads of it over (counterfeiting)....didn't help!

We can rant about market control....but we do have that to a certain extent right now via the debt vehicle. Personally I think no solution is truly safe in the hands of wicked people....and a whole lot of solutions become viable in the hands of righteous people. People have to function in a level of trust....its impossible to transact with each other without some degree of trust (hence the breakdown and destruction of wicked societies - sleeping on possessions with sword in hand).

The problem we have now is individuals within the market have co-opted the government. Those individuals could be constrained by the masses....but the masses have chosen their own self interests when it comes to sincere opposition. It begins and ends with the moral foundation.

[Jason]

Yes, any system will be abused, but market forces allows for least abuse, whether in phones, food, or the money service. Supply, demand, and price of lending money should be market-determined. Central planning doesn't work, whether its done by the Rothschilds or the Harry Reids.

Right....so you have to constrain government and keep it out of the markets. But then you get into the animal spirits of the market and the reality that the goal becomes monopoly....and we are back to trying to get government to then constrain the market.

The people have to make the correct choices!!! Then their representatives will make correct choices.....and consequently the government....and life gets good!

[Jason]

We are all living a big lie, economically, and have done so our entire lives not knowing what exists outside of the box presented to us. In the year 1913 the “Federal Reserve Act” gave the power to control the production of money to the “Federal Reserve Banks” which are not Federal, they possess no reserves, and they are not even a bank. What they are is private corporations owned by private banks, who in turn are owned by private individuals.

This is not only an outright lie in name, but it is clearly a conflict of self-interest. Giving a few private individuals the right to control the production of money inevitably leads to them producing money and using it to buy the political system they desire – one that benefits them. Their benefit is at the expense of others, the further away from the production of money you are, the more it damages you.

There is a natural way of being in regards to money – money is simply an agreed medium of exchange. Its production should never benefit individuals, it absolutely can be created and controlled in such a way that its production benefits everyone equally. There is no need, for example, for a nation to have a national debt. A sovereign nation can simply produce money and spend it into existence instead of borrowing it into being as we do now. Take a look at the money in your wallet, you see that it says “Federal Reserve Note” on top. The term ‘note’ means debt. That debt carries interest paid mostly to the private banks who hold the majority of our nation’s debt.

That debt is their power base. They wield their power to control the government, to control the markets, to control the media, to control our defense industry, to control the medical industry, the nuclear industry, our higher institutions of learning, etc. The production of money is all about control – those who produce it are in control, those who do not are not. If you covet a truly representative government, one that represents YOU, then you must work to return the money creation power to the people as is meant to be the case and as has been the case before in this nation.

So, we’ve been living a central banking lie that has placed us all into a false paradigm – a box with walls that are false. Within that box is found impossible math. There is simply no way that incomes can ever come close to servicing all the debt, and that has led to Macroeconomic Debt Saturation which I can prove has occurred in about five different ways.

A fundamental false belief economically is to compartmentalize our debts. When applying for a car loan, for example, the bank will look at your personal debt levels and compare that to your income. But you are not only responsible for your own personal debt, you are also responsible for your town’s debts, your county’s debts, your state’s debts, your nation’s debts, as well as your share of the corporate debt! It amounts to well over $300,000 per person or $1.2 million for every family of four – conservatively, and reality is probably much worse than that. Compare that amount to the average income and it quickly becomes clear that the math is indeed impossible.

Once debt saturation occurs, then “stimulating” the economy with more debt money only works to drag the economy down and to create higher unemployment. This build up of debt must be cleared in order for the economy to create real productive growth. Unfortunately the math of debt has gone exponential – yet another fact that is ignored leading to still more false beliefs.

But the debt cannot be cleared when the political system is controlled by those who produce the debt and got us into this situation to begin with. And this highlights the fact that allowing private individuals to control the production of money goes against the very nature of nature. Math is a part of nature after all, it just is, and there are limits imposed by it.

The impossible math that has taken root around the world is entangling all who get near it.

This same type of twisted self-interest is happening all over the fields of medicine, food production, what we formerly thought of as free markets, the military industrial complex, and really all facets of modern day life. We are living in a central banker backed special interest box.

This box is not good for society. It creates all sorts of false economic beliefs. It is much closer to voodoo than it is to science, because keeping humanity in the dark is profitable to those controlling the population.

There are no solutions to the impossible math that work as long as we continue to live inside of their false box. Tear down the walls to their box, however, and true solutions are immediately clear. Just such a solution can be found within the framework of Freedom’s Vision.

So you see, economics is rooted in and intertwined with science, there is a natural order to the universe with real boundaries that cannot be exceeded.

The proper foundation to a well functioning economy is found in a rule of law that keeps itself well-centered within the natural limits imposed on it. From that proper rule of law the next step is to form a monetary system that benefits everyone equally. Then you can begin to develop human and natural resources to create jobs, wealth, and prosperity.

That wealth pyramid exists within and is surrounded by nature. But before a proper rule of law is established, empathy and communication must exist! Any and all relationships exist because people first communicate with one another, and because all parties involved feel that being in the relationship is beneficial (there’s that self-interest again)! It’s like a good marriage – when you’re in one you know it. You recognize that you are better off as a team, not just an individual, and like all good things it is self-perpetuating when both parties feel good about themselves and their relationship(s). But when you’re in a bad relationship you riot – and just look at the world today.

Right now people are not feeling good about their relationship with their money, they are finally beginning to get focused on the root of the money problem – WHO it is that controls its production (central banks). This is why we are seeing the current set of “Occupy Wall Street” riots – note that each set of riots is getting closer to the root of who controls the production of money.

And so the money and political environment is about to change, but unless we smash a few false assumptions what we wind up with may not be a whole lot better than what we have now.

http://economicedge.blogspot.com/2011/1 ... false.html" onclick="window.open(this.href);return false;

I think he misses the key by a mile - people constraining themselves according to righteous principles. Without that all bets are off!

[Jason]

From Dow Jones: "French banks are experiencing difficulties providing financing for aircraft purchases by airlines, a market that is largely dominated by dollar transactions, Louis Gallois, chief executive of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), said Monday. "French banks clearly have problems financing aircraft purchases," he said, speaking on the sidelines of an event to launch a new French think-tank to promote the French industry. Mr. Gallois's comments come as French banks have indicated that they were planning to cut back on dollar financing, as raising dollars has become increasingly difficult."

http://www.zerohedge.com/news/airbus-pa ... ity-issues" onclick="window.open(this.href);return false;

...aren't those worthless dollars being printed and circulated in massive quantities????

For starters, Dexia had 566 billion euros in debt and 19 billion euros in equity as of the end of 2010. Right off the bat, that’s a leverage ratio of 29 to 1. Lehman Brothers was leveraged at 30 to 1 when it collapsed.

Now consider that Belgium’s entire GDP is just 348 billion euros. Dexia has 566 billion euros in assets. Of this 352 billion are loans. Put another way, Dexia’s loan portfolio alone is larger than its home country’s entire economy.

http://www.zerohedge.com/contributed/gr ... xt-edition" onclick="window.open(this.href);return false;

[jonesde]

Jason wrote: "The problem we have now is individuals within the market have co-opted the government. Those individuals could be constrained by the masses....but the masses have chosen their own self interests when it comes to sincere opposition. It begins and ends with the moral foundation."

Our form of government seems to incent people to behave badly. Groups have learned that they can get a big bang for the buck on government lobbying and infiltration (ie revolving door between public and private orgs). This is a basic principle of our form of government (and most forms of government), that of concentrated benefits and diffuse costs, described well in this book:

http://en.wikipedia.org/wiki/The_Logic_ ... ive_Action" onclick="window.open(this.href);return false;

A completely honest and hardworking people may be able to live peacefully without stealing under our form of government, but the temptation is ALWAYS there and it only takes a few to abuse it unless the rest are really watching out for it (and not watching for lies about how they can benefit from the legitimized theft and enslavement).

It seems like the best solution is more competition and less centralization in government, but that requires such a high level knowledge and understanding among the people to maintain it and resist centralization while remaining safe from outside invaders, that who knows if such things would work.

[jonesde]

I remember reading in this thread a long time ago, and failing to keep up with it in spite of the interesting topic. With so much understanding and evidence of various things I'm surprised it is still a debate of any sort. The answer to the question of "are we going to see deflation or inflation in the future?" seems to be a simple "yes" (in other words, both).

Someone may have already brought this up and I missed it by not reading every page of the thread. If so, I apologize.

If government was SO constrained that the only lever they had was the issuance of money then for the most part you'd only have the two options of general inflation and general deflation in a given period of time. Of course, that can be mixed with the pattern of cycles of inflation and deflation so that those in the know can time investments correctly to dominate the market and basically steal from everyone else.

Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

Is there currently inflation or deflation? Yes.
Will there soon be extreme inflation or extreme deflation? Yes.

The trick seems to be in which markets are deflating versus inflating. Having real estate and many more durable goods and assets inflate (price inflation) versus consumables for a long time (ie mid-80s to mid-00s) created a GREAT time to be alive and work a little with lots of benefits. Now we have the opposite. Real estate and many assets are deflating (price deflation) while consumables are inflating (price inflation).

What has monetary policy been doing all along? Both inflating and deflating in convenient cycles and by convenient means, combined with regulation, to produce the price inflation/deflation patterns above.

The comments about debt saturation above are an interesting way to look at this same trend. We (or those who came before us) have created an economy that creates debt with benefits to some and liability to others. Some of it has been benefits to certain small groups at the expense of the many, and a lot of it has been benefits to people with more time on earth at the expense of people with less time on earth (or even yet to arrive on earth... assuming the system lasts that long).

But that's just how it worked monetarily and financially. In terms of actual labor there is NO debt. Everything that exists has already been produced (or existed naturally without human effort) so it's not like people can enjoy things now that will be produced in the future. All this fancy economic system does is allow people to enslave other people, for people to borrow and have someone else pay it off... or in other words for people to convince others that they need to work because they were born into an obligation, while others don't because they have managed to control the issuance of obligation.

So, the only natural response is to repudiate the debt that we didn't incur in the first place.

The problem is that by doing that there are probably around 100,000,000 people in this country alone who are living on welfare or other government funds and would have to go back work instead of having other people provide for their needs. From a merciful perspective, this is a big problem because if we cut off these programs too quickly many of these people will die. Is that just punishment for participating in a program of enslavement?

Still, it seems inevitable at this point that the nation and the young of the nation will repudiate their ancestral debt and refuse to pay for the so called "entitlement" programs, and also refuse to pay the debts incurred by others. As that happens we'll have a time period where those who are working who have already been robbed and enslaved so thoroughly that they won't be able to voluntarily help those who are not able.

Those who refuse to work will probably (hopefully) whither until they are humbled or they go the way of all things. For the rest of us, we'll have to work hard for a while and suffer through it, unless of course a significant catastrophe reduces the population enough to handle the problems of temporarily reduced production and temporary reduced ability to voluntarily provide the charity that many of use are used to paying at the threat of violence (and many may be embittered and refuse to offer up any charity to those who honestly need and are really co-victims of all of this mess).

[BroJones]

Welcome to the forum, jonesde, and thanks for your perspective and insights.

Yes, its a real mess. The Gadiantons have parasitically extracted much wealth out of the world-wide economies, and continue to do so.
Do they realize this legalized robbery cannot continue? or are they such habitual gamers that its all like a big chessboard to them, a game. Soon to reach checkmate. Of course, they plan to win the game. Probably a BIG surprise move at the end, like their generating an EMP and blaming it on the next country they seek to control/dominate.

But they finally won't win. Let me remind all that John prophecies that the Lord will administer justice on the whore Babylon. I have discussed this elsewhere and hesitate to review here since its time for sleep.

But the solution is -- get independent of Babylon, "come out of her" John warns, pleads really, lest we be "partakers of her plagues" to come.

[davedan]

I do support returning to a gold and silver standard. One problem with gold and silver is the manipulation. Much of the banking failures leading up to the creation of the FED were because of repeated silver and gold bubbles and busts.

Solution: Get rid of fractional reserve banking. Fractional reserves makes banks vulnerable to contractions of the money supply.

Another problem with using gold and silver alone, is there is not enough of it alone to furnish the money supply needs of our economy.

Solution: allow congress via the treasury to issue credit/loans administered by local banks (Safety Societies) for relative non-depreciating goods (heirloom), certain high-quality machinery, and real-estate. Local banks would make money charging a loan origination fee and a monthly service charge which amounts to simple instrest. Congress could generate revenue by collecting a percentage (simple insterest = voluntary tax) like credit card companies do. Real-estate, and real-assets are their own backing for this portion of the money supply. The money that is created doesn't need to be double backed by gold and silver because the land, or building, or machine, or heirloom furniture is the backing.

Other financial institutions could provide for other needs such as for venture capital. But safety societies would not engage in speculation.

The safety society system would create a system of local banks that would be immune from fluctations in the money supply and the economy. Fractional reserves do not determine a banks ability to lend. What determines lending is need. If there is a lot of cash in the system and less loans are issued. Then more money is needed, Congress can create money as needed. This prevents inflation.

Corporations and larger communities can qualify for larger loans based on credit worthiness criteria. A community could forcast proceeds from a 1% sales tax, and qualify for a low-interst loan based on that revenue.

Safety Society banks would operate on full reserve banking. Deposited money would never be used to issue new loans. Therefore, money would alway be "on hand" to pay withdrawals. This makes Safety Societies immune from banking runs. Since new loans come from Congress via the Treasury, Safetly Societies are never in a position where they cannot make new loans and generate revenue based on loan origination fees and monthly loan service charges (simple interest).

[Tribunal]

The problem with this davedan is government using force to obtain taxes from the people and giving the money to local banks for these loans you spoke of. Government should be a partner in an economy and not the source!

After reading this very long thread I'm still confused on how we are deflating our economy and not inflating it, but I'll figure it out some day!!! (

[Glenn]

The problem with this davedan is government using force to obtain taxes from the people and giving the money to local banks for these loans you spoke of. Government should be a partner in an economy and not the source!

After reading this very long thread I'm still confused on how we are deflating our economy and not inflating it, but I'll figure it out some day!!! (

These are perplexing times; no doubt about that. Here are my thoughts:

There is the institutional money supply; then there is the public/consumer money supply. Some institutions (Banks and corporations) release liquidity to the public sector in the form of wages and loans. At the institutional level, money/credit is being withdrawn to some, but extended/increased to others depending on their political connections.

Since jobs are disappearing and money is being re-directed to favored institutions there appears to be a real contraction in liquidity in the public sector. At the public level some assets are still declining in value (like homes) while other necessities are increasing in value (like groceries). Since things like groceries are a weekly necessity the average household feels the immediate impact of inflation. Put simply, some sectors are deflating; while other sectors are inflating (you feel what you are most exposed to). There are a lot of cross currents in play at the moment due to unprecedented corruption and re-allocation of funds. What we may be witnessing is the death of a free market system, being replaced by a command and control fascist system in which only those institutions that cooperate with those in power survive or thrive.

Those who hoard precious metals are speculating on their future value. Likewise those who accumulate cash are also speculating on its future worth. I think it’s wise to have a little of both. Which chairs will be safe havens when the music stops? That’s the grand question. I, however, think the biggest liberation for a typical household will be the lack of debt with emergency preparations in place. However, in Joseph’s Egypt gold/silver was exchanged for food. Eventually the scriptures say that even the money failed (which was probably the gold/silver in most cases). In such a calamity I do not see modern day cash/fiat money providing any security. Eliminating debt and securing food storage and other preparations is hard to do when the “famine” waxes strong in the land.

[Jason]

I remember reading in this thread a long time ago, and failing to keep up with it in spite of the interesting topic. With so much understanding and evidence of various things I'm surprised it is still a debate of any sort. The answer to the question of "are we going to see deflation or inflation in the future?" seems to be a simple "yes" (in other words, both).

Someone may have already brought this up and I missed it by not reading every page of the thread. If so, I apologize.

If government was SO constrained that the only lever they had was the issuance of money then for the most part you'd only have the two options of general inflation and general deflation in a given period of time. Of course, that can be mixed with the pattern of cycles of inflation and deflation so that those in the know can time investments correctly to dominate the market and basically steal from everyone else.

Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

Is there currently inflation or deflation? Yes.
Will there soon be extreme inflation or extreme deflation? Yes.

The trick seems to be in which markets are deflating versus inflating. Having real estate and many more durable goods and assets inflate (price inflation) versus consumables for a long time (ie mid-80s to mid-00s) created a GREAT time to be alive and work a little with lots of benefits. Now we have the opposite. Real estate and many assets are deflating (price deflation) while consumables are inflating (price inflation).

What has monetary policy been doing all along? Both inflating and deflating in convenient cycles and by convenient means, combined with regulation, to produce the price inflation/deflation patterns above.

The comments about debt saturation above are an interesting way to look at this same trend. We (or those who came before us) have created an economy that creates debt with benefits to some and liability to others. Some of it has been benefits to certain small groups at the expense of the many, and a lot of it has been benefits to people with more time on earth at the expense of people with less time on earth (or even yet to arrive on earth... assuming the system lasts that long).

But that's just how it worked monetarily and financially. In terms of actual labor there is NO debt. Everything that exists has already been produced (or existed naturally without human effort) so it's not like people can enjoy things now that will be produced in the future. All this fancy economic system does is allow people to enslave other people, for people to borrow and have someone else pay it off... or in other words for people to convince others that they need to work because they were born into an obligation, while others don't because they have managed to control the issuance of obligation.

So, the only natural response is to repudiate the debt that we didn't incur in the first place.

The problem is that by doing that there are probably around 100,000,000 people in this country alone who are living on welfare or other government funds and would have to go back work instead of having other people provide for their needs. From a merciful perspective, this is a big problem because if we cut off these programs too quickly many of these people will die. Is that just punishment for participating in a program of enslavement?

Still, it seems inevitable at this point that the nation and the young of the nation will repudiate their ancestral debt and refuse to pay for the so called "entitlement" programs, and also refuse to pay the debts incurred by others. As that happens we'll have a time period where those who are working who have already been robbed and enslaved so thoroughly that they won't be able to voluntarily help those who are not able.

Those who refuse to work will probably (hopefully) whither until they are humbled or they go the way of all things. For the rest of us, we'll have to work hard for a while and suffer through it, unless of course a significant catastrophe reduces the population enough to handle the problems of temporarily reduced production and temporary reduced ability to voluntarily provide the charity that many of use are used to paying at the threat of violence (and many may be embittered and refuse to offer up any charity to those who honestly need and are really co-victims of all of this mess).

Best not to mix the macro and the micro. The tide either comes in or out. Individual ship movements are based on the constraints of individual ships.

The numbers stipulate that deflation is occurring in terms of the macro (declining total debt). Speculation in commodities has created bubbles which many attribute to inflation. In order for inflation to ultimately be in play....it takes more and more money chasing relatively same amount of goods. That isn't happening. We have excess supply in nearly everything...from houses to oil. But some markets are more monopolized than others and they can simply warehouse those excess goods in order to demand the price they want.

[Glenn]

I remember reading in this thread a long time ago, and failing to keep up with it in spite of the interesting topic. With so much understanding and evidence of various things I'm surprised it is still a debate of any sort. The answer to the question of "are we going to see deflation or inflation in the future?" seems to be a simple "yes" (in other words, both).

Someone may have already brought this up and I missed it by not reading every page of the thread. If so, I apologize.

If government was SO constrained that the only lever they had was the issuance of money then for the most part you'd only have the two options of general inflation and general deflation in a given period of time. Of course, that can be mixed with the pattern of cycles of inflation and deflation so that those in the know can time investments correctly to dominate the market and basically steal from everyone else.

Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

Is there currently inflation or deflation? Yes.
Will there soon be extreme inflation or extreme deflation? Yes.

The trick seems to be in which markets are deflating versus inflating. Having real estate and many more durable goods and assets inflate (price inflation) versus consumables for a long time (ie mid-80s to mid-00s) created a GREAT time to be alive and work a little with lots of benefits. Now we have the opposite. Real estate and many assets are deflating (price deflation) while consumables are inflating (price inflation).

What has monetary policy been doing all along? Both inflating and deflating in convenient cycles and by convenient means, combined with regulation, to produce the price inflation/deflation patterns above.

The comments about debt saturation above are an interesting way to look at this same trend. We (or those who came before us) have created an economy that creates debt with benefits to some and liability to others. Some of it has been benefits to certain small groups at the expense of the many, and a lot of it has been benefits to people with more time on earth at the expense of people with less time on earth (or even yet to arrive on earth... assuming the system lasts that long).

But that's just how it worked monetarily and financially. In terms of actual labor there is NO debt. Everything that exists has already been produced (or existed naturally without human effort) so it's not like people can enjoy things now that will be produced in the future. All this fancy economic system does is allow people to enslave other people, for people to borrow and have someone else pay it off... or in other words for people to convince others that they need to work because they were born into an obligation, while others don't because they have managed to control the issuance of obligation.

So, the only natural response is to repudiate the debt that we didn't incur in the first place.

The problem is that by doing that there are probably around 100,000,000 people in this country alone who are living on welfare or other government funds and would have to go back work instead of having other people provide for their needs. From a merciful perspective, this is a big problem because if we cut off these programs too quickly many of these people will die. Is that just punishment for participating in a program of enslavement?

Still, it seems inevitable at this point that the nation and the young of the nation will repudiate their ancestral debt and refuse to pay for the so called "entitlement" programs, and also refuse to pay the debts incurred by others. As that happens we'll have a time period where those who are working who have already been robbed and enslaved so thoroughly that they won't be able to voluntarily help those who are not able.

Those who refuse to work will probably (hopefully) whither until they are humbled or they go the way of all things. For the rest of us, we'll have to work hard for a while and suffer through it, unless of course a significant catastrophe reduces the population enough to handle the problems of temporarily reduced production and temporary reduced ability to voluntarily provide the charity that many of use are used to paying at the threat of violence (and many may be embittered and refuse to offer up any charity to those who honestly need and are really co-victims of all of this mess).

Best not to mix the macro and the micro. The tide either comes in or out. Individual ship movements are based on the constraints of individual ships.

The numbers stipulate that deflation is occurring in terms of the macro (declining total debt). Speculation in commodities has created bubbles which many attribute to inflation. In order for inflation to ultimately be in play....it takes more and more money chasing relatively same amount of goods. That isn't happening. We have excess supply in nearly everything...from houses to oil. But some markets are more monopolized than others and they can simply warehouse those excess goods in order to demand the price they want.

The 4th paragraph in the Jonesde quote is important. Actually discussing the Micro within the context of the Macro is appropriate. Most readers will not believe the case for deflation when all they see is inflation at the individual/household level. Discussing both can help reveal the conflicting story within a story.

In regards to tides, ultimately it’s either coming or going especially at the Macro level. However, I remember my weekends at beautiful Canon Beach in Oregon. When the tide withdrew, there were many large tidal pools that never went dry. I suspect there will be similar pools of liquidity in the days ahead. I think this is especially true of the institutions that are in bed with the controlling powers….Finally the tide may continue to contract until it doesn’t; there is not a static fixed destination, but rather a journey through time. Different assets will be ideal for different points along that journey.

[Jason]

I remember reading in this thread a long time ago, and failing to keep up with it in spite of the interesting topic. With so much understanding and evidence of various things I'm surprised it is still a debate of any sort. The answer to the question of "are we going to see deflation or inflation in the future?" seems to be a simple "yes" (in other words, both).

Someone may have already brought this up and I missed it by not reading every page of the thread. If so, I apologize.

If government was SO constrained that the only lever they had was the issuance of money then for the most part you'd only have the two options of general inflation and general deflation in a given period of time. Of course, that can be mixed with the pattern of cycles of inflation and deflation so that those in the know can time investments correctly to dominate the market and basically steal from everyone else.

Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

Is there currently inflation or deflation? Yes.
Will there soon be extreme inflation or extreme deflation? Yes.

The trick seems to be in which markets are deflating versus inflating. Having real estate and many more durable goods and assets inflate (price inflation) versus consumables for a long time (ie mid-80s to mid-00s) created a GREAT time to be alive and work a little with lots of benefits. Now we have the opposite. Real estate and many assets are deflating (price deflation) while consumables are inflating (price inflation).

What has monetary policy been doing all along? Both inflating and deflating in convenient cycles and by convenient means, combined with regulation, to produce the price inflation/deflation patterns above.

The comments about debt saturation above are an interesting way to look at this same trend. We (or those who came before us) have created an economy that creates debt with benefits to some and liability to others. Some of it has been benefits to certain small groups at the expense of the many, and a lot of it has been benefits to people with more time on earth at the expense of people with less time on earth (or even yet to arrive on earth... assuming the system lasts that long).

But that's just how it worked monetarily and financially. In terms of actual labor there is NO debt. Everything that exists has already been produced (or existed naturally without human effort) so it's not like people can enjoy things now that will be produced in the future. All this fancy economic system does is allow people to enslave other people, for people to borrow and have someone else pay it off... or in other words for people to convince others that they need to work because they were born into an obligation, while others don't because they have managed to control the issuance of obligation.

So, the only natural response is to repudiate the debt that we didn't incur in the first place.

The problem is that by doing that there are probably around 100,000,000 people in this country alone who are living on welfare or other government funds and would have to go back work instead of having other people provide for their needs. From a merciful perspective, this is a big problem because if we cut off these programs too quickly many of these people will die. Is that just punishment for participating in a program of enslavement?

Still, it seems inevitable at this point that the nation and the young of the nation will repudiate their ancestral debt and refuse to pay for the so called "entitlement" programs, and also refuse to pay the debts incurred by others. As that happens we'll have a time period where those who are working who have already been robbed and enslaved so thoroughly that they won't be able to voluntarily help those who are not able.

Those who refuse to work will probably (hopefully) whither until they are humbled or they go the way of all things. For the rest of us, we'll have to work hard for a while and suffer through it, unless of course a significant catastrophe reduces the population enough to handle the problems of temporarily reduced production and temporary reduced ability to voluntarily provide the charity that many of use are used to paying at the threat of violence (and many may be embittered and refuse to offer up any charity to those who honestly need and are really co-victims of all of this mess).

Best not to mix the macro and the micro. The tide either comes in or out. Individual ship movements are based on the constraints of individual ships.

The numbers stipulate that deflation is occurring in terms of the macro (declining total debt). Speculation in commodities has created bubbles which many attribute to inflation. In order for inflation to ultimately be in play....it takes more and more money chasing relatively same amount of goods. That isn't happening. We have excess supply in nearly everything...from houses to oil. But some markets are more monopolized than others and they can simply warehouse those excess goods in order to demand the price they want.

The 4th paragraph in the Jonesde quote is important. Actually discussing the Micro within the context of the Macro is appropriate. Most readers will not believe the case for deflation when all they see is inflation at the individual/household level. Discussing both can help reveal the conflicting story within a story.

In regards to tides, ultimately it’s either coming or going especially at the Macro level. However, I remember my weekends at beautiful Canon Beach in Oregon. When the tide withdrew, there were many large tidal pools that never went dry. I suspect there will be similar pools of liquidity in the days ahead. I think this is especially true of the institutions that are in bed with the controlling powers….Finally the tide may continue to contract until it doesn’t; there is not a static fixed destination, but rather a journey through time. Different assets will be ideal for different points along that journey.

I don't understand your point. There's either inflation or deflation. End of story. Everything else is the result of something else - speculation, government manipulation, secret combinations, etc. It only gets confusing when you try to mix the two together and come up with some convoluted incomprehensible definition to try to explain what is taking place. The tide is going in or going out....sure there are tidal pools...but that doesn't change the direction of the tide. Of course there will be liquidity pools....most likely right around those with access to the printing press (I've stated that over and over and over now). The tide will contract until we reach the point where the system collapses or to the point where people are in the situation where they can take on more debt (reset) and thus create more money....and we are off to the next ramp up on the next business cycle.

[jonesde]

Jason: For impact on our personal lives and society it may be more useful to distinguish between monetary and price inflation/deflation as opposed to micro and macro economics. I think you're correct for monetary direction for a specific currency... it is always either inflating or deflating. Price inflation/deflation is another matter and while influenced by monetary inflation and deflation that is not the only factor, and that is not even a good factor for prediction on a short time scale.

Personally, I'm more concerned about price inflation and deflation in different segments of the market than I am about the actual money supply... well unless the change in money supply is dramatic enough to cause a hyper-in/deflation situation. The powers that we are currently privileged to live in subject to seem to have enough experience from centuries of experimentation to keep things from going out of control (for now any way), so it seems like most of the pain we'll experience in the near future (and are experiencing now) is due to market manipulating through price inflation/deflation that is different across market segments in clearly strategic ways.

BTW, I agree with your general point about monetary deflation. In spite of the fed issuing all sorts of special private and public loans, and the federal govt spending like crazy, that money only makes it into certain balance sheets and rarely into the marketplace. I've been hit pretty hard personally by intentional deflation, especially in the year or so that banks were aggressively reducing credit card balance limits which unfortunately are an important part of my small business. I went from a healthy credit buffer with tens of thousands available for short term business needs to having basically zero credit available because every time I paid a card down more than $1000 from its limit the limit was lowered so that less than $1000 was available. This made even small things like business travel difficult because I got to the point where I had to require payment in advance for at least expenses because I couldn't float from personal funds the few thousand dollars required for travel to visit clients. This credit retraction seems to have mostly stopped, but I haven't seen or heard of any evidence of credit expansion.

[Jason]

Jason: For impact on our personal lives and society it may be more useful to distinguish between monetary and price inflation/deflation as opposed to micro and macro economics. I think you're correct for monetary direction for a specific currency... it is always either inflating or deflating. Price inflation/deflation is another matter and while influenced by monetary inflation and deflation that is not the only factor, and that is not even a good factor for prediction on a short time scale.

Personally, I'm more concerned about price inflation and deflation in different segments of the market than I am about the actual money supply... well unless the change in money supply is dramatic enough to cause a hyper-in/deflation situation. The powers that we are currently privileged to live in subject to seem to have enough experience from centuries of experimentation to keep things from going out of control (for now any way), so it seems like most of the pain we'll experience in the near future (and are experiencing now) is due to market manipulating through price inflation/deflation that is different across market segments in clearly strategic ways.

BTW, I agree with your general point about monetary deflation. In spite of the fed issuing all sorts of special private and public loans, and the federal govt spending like crazy, that money only makes it into certain balance sheets and rarely into the marketplace. I've been hit pretty hard personally by intentional deflation, especially in the year or so that banks were aggressively reducing credit card balance limits which unfortunately are an important part of my small business. I went from a healthy credit buffer with tens of thousands available for short term business needs to having basically zero credit available because every time I paid a card down more than $1000 from its limit the limit was lowered so that less than $1000 was available. This made even small things like business travel difficult because I got to the point where I had to require payment in advance for at least expenses because I couldn't float from personal funds the few thousand dollars required for travel to visit clients. This credit retraction seems to have mostly stopped, but I haven't seen or heard of any evidence of credit expansion.

Yes there is a definition issue here....which I've explained multiple times throughout the course of this thread. I stick with the tide because as you point out....if you get mixed up in all the different segments of the market trying to explain the monetary situation.....you end up with a convoluted incomprehensible definition that no one understands. People hear "money" and "worthless" while seeing inflationary prices in certain segments like food....and then see big names pushing gold/silver while utilizing the evidence from those certain segments. My effort has been to combat that view based on a macro view of the entire picture.

But on an individual investment basis....yes you better know what's going on with the whole picture as well as what's happening in individual segments.....or else you'll probably get burned. And yes manipulation, outright fraud, combinations, and tons of propaganda currently define the investment arena. That said, there are fundamentals which never go away. If the people have no money (or less and less money) then they will buy less and less. So if you have a monopoly....and people have to have it....you can charge whatever you want (at least until they have absolutely no money). If you don't have a monopoly (via lots of control via government, corporations, and investment banks).....and people don't have to have it.....you are in major trouble.

Agree with you on the credit side. They are smart and know where we are at in the cycle. Limits have been imposed that existed previously, but were removed for the ramp-up, and now are back in play (perhaps even more excessive constraints than what existed previously). I think we are still near the beginning and we have a long ways to go before this all plays out. I've played in the entrepreneurial space since going the white collar route. I'm seeing much more extensive funding difficulties. In fact most small businesses get going by leveraging a home owner's housing equity....that's pretty much dead!

The deflationary route is easiest for them to handle because they always have the luxury to open the credit floodgates a little and add some money to the system to control the rate of descent. That control diminishes as people become debt saturated and won't borrow at any cost.....but even those can extend and pretend by transferring credit card balances at zero percent for an injection of time. And via government (which they control) they can add debt/money as needed.

The hyperinflation route on the other hand.....once that psychology hits the masses....that the money is absolutely worthless and no one wants it.....once that train has left the station I don't think it can be stopped. We nearly had a run away in the 70's that took Volcker a few years to tamp down with double digit interest rates.

[Glenn]

From Jason: I don't understand your point. There's either inflation or deflation. End of story. Everything else is the result of something else - speculation, government manipulation, secret combinations, etc. It only gets confusing when you try to mix the two together and come up with some convoluted incomprehensible definition to try to explain what is taking place. The tide is going in or going out....sure there are tidal pools...but that doesn't change the direction of the tide. Of course there will be liquidity pools....most likely right around those with access to the printing press (I've stated that over and over and over now). The tide will contract until we reach the point where the system collapses or to the point where people are in the situation where they can take on more debt (reset) and thus create more money....and we are off to the next ramp up on the next business cycle.

Actually I don’t think it’s convoluted at all. I am simply agreeing with the quote/paragraph from jonesde below. I’m just visualizing a real tide with all its granularities; the tide does not recede all at once, and it affects the beach differently depending on the terrain. With Macro/Policy/Deflation it’s a process/trend. The question is how it will impact price inflation at the individual or household level over time. Most people will hear deflation and refuse to believe because they are experiencing inflation pain at the grocery store. Most of the confusion may be due to terminology and individual points of reference.

From jonesde: Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

In regards to the evolving banking crisis, and Soverign debt crisis there is clearly a mad push to re-capitalize, so deflation is clearly occurring at the macro level…I’m trying to figure out what that means for the individual/household level. How prolonged and how severe will the macro deflation have to become before it impacts the price inflation for everyday people? It appears that jonesde has a similar focus as seen from his quote below:

From jonesde: For impact on our personal lives and society it may be more useful to distinguish between monetary and price inflation/deflation as opposed to micro and macro economics. I think you're correct for monetary direction for a specific currency... it is always either inflating or deflating. Price inflation/deflation is another matter and while influenced by monetary inflation and deflation that is not the only factor, and that is not even a good factor for prediction on a short time scale.

Personally, I'm more concerned about price inflation and deflation in different segments of the market than I am about the actual money supply...

In summary, how prolonged and protracted will macro deflation have to be before it has any real impact on price inflation? My concern is that a dramatic/severe deflationary contraction will also restrict the means of production in many industries. Many goods and services will become increasingly scarce offsetting any strength in the dollar. Today $10 dollars cash may buy ten cans of bargain beans; will the same $10 cash buy twenty cans of beans after a deflationary crash? I just don’t see it happening that way. Many people claim to have the magic bullet that will insulate them from the growing financial crises. I think it’s unwise to become emotionally attached to either precious metals or cash as a financial life raft. For the individual,/household debt reduction is key, followed by food storage and other preparations. If there is something left after that then by all means spread the risk around in the asset classes of ones choosing.

BTW, jonesde, Good insight/comments.

[Jason]

From Jason: I don't understand your point. There's either inflation or deflation. End of story. Everything else is the result of something else - speculation, government manipulation, secret combinations, etc. It only gets confusing when you try to mix the two together and come up with some convoluted incomprehensible definition to try to explain what is taking place. The tide is going in or going out....sure there are tidal pools...but that doesn't change the direction of the tide. Of course there will be liquidity pools....most likely right around those with access to the printing press (I've stated that over and over and over now). The tide will contract until we reach the point where the system collapses or to the point where people are in the situation where they can take on more debt (reset) and thus create more money....and we are off to the next ramp up on the next business cycle.

Actually I don’t think it’s convoluted at all. I am simply agreeing with the quote/paragraph from jonesde below. I’m just visualizing a real tide with all its granularities; the tide does not recede all at once, and it affects the beach differently depending on the terrain. With Macro/Policy/Deflation it’s a process/trend. The question is how it will impact price inflation at the individual or household level over time. Most people will hear deflation and refuse to believe because they are experiencing inflation pain at the grocery store. Most of the confusion may be due to terminology and individual points of reference.

From jonesde: Unfortunately, government doesn't just manipulate the money supply, they also manipulate and corrupt the marketplace. They don't even issue currency in a way the spreads it across the economy as evenly as possible, they do it in a way that causes certain market segments to INFLATE at the same time that other market segments DEFLATE. Combine that with regulatory policy that also works to grow certain markets and stifle others, and you've got some real economic fun.

In regards to the evolving banking crisis, and Soverign debt crisis there is clearly a mad push to re-capitalize, so deflation is clearly occurring at the macro level…I’m trying to figure out what that means for the individual/household level. How prolonged and how severe will the macro deflation have to become before it impacts the price inflation for everyday people? It appears that jonesde has a similar focus as seen from his quote below:

From jonesde: For impact on our personal lives and society it may be more useful to distinguish between monetary and price inflation/deflation as opposed to micro and macro economics. I think you're correct for monetary direction for a specific currency... it is always either inflating or deflating. Price inflation/deflation is another matter and while influenced by monetary inflation and deflation that is not the only factor, and that is not even a good factor for prediction on a short time scale.

Personally, I'm more concerned about price inflation and deflation in different segments of the market than I am about the actual money supply...

In summary, how prolonged and protracted will macro deflation have to be before it has any real impact on price inflation? My concern is that a dramatic/severe deflationary contraction will also restrict the means of production in many industries. Many goods and services will become increasingly scarce offsetting any strength in the dollar. Today $10 dollars cash may buy ten cans of bargain beans; will the same $10 cash buy twenty cans of beans after a deflationary crash? I just don’t see it happening that way. Many people claim to have the magic bullet that will insulate them from the growing financial crises. I think it’s unwise to become emotionally attached to either precious metals or cash as a financial life raft. For the individual,/household debt reduction is key, followed by food storage and other preparations. If there is something left after that then by all means spread the risk around in the asset classes of ones choosing.

BTW, jonesde, Good insight/comments.

Yes I agree....there are definition issues. Many use those to their advantage to talk their book.

Amen on deflation at the macro level.

With regards to the individual/household level...that's where it gets sticky because everyone has a different situation. There's also short term issues driven by speculation, fraud, government manipulation, etc....that drive things for a time in the short term....before the macro problems catch up or overwhelm their ability to control. If you don't have money/debt....you don't buy. The speculation concerning the outcome and timing is at dramatic levels and drives up fear/volatility as a result. So something like corn can hit the up limits on one day and the down limits on the next. Because the ethanol program which is renewed year to year by Congress.....consumes over 40% of the market demand for corn....the reality is that nearly half the market demand could dry up and go away within 12 months....or it could stay the same.....or it could increase. Not to mention the impacts of weather and everything else that impacts the market. Despite all that....there are long term macro effects that drive it like the amount of money at the consumer level.

Well there's plenty of supply of most goods and services....and not enough money. Its like my grandfather said about the great depression - the wheat farmer had wheat, the store keeper had goods, the coal miner had coal....but none of them had any money.....so the wheat farmer burned wheat in his stove to stay warm, the store keeper ate the foodstuffs and burned the rest, and the coal miner starved to death.

I agree on the recommendations. I've repeatedly advocated what the prophets have stated (except for perhaps emphasizing a means of production). Basically - get out of debt, have some savings for a rainy day (some cash under your control), food storage, food production to whatever extent possible, fuel/energy storage & production, etc. Basically as independent as feasible in whatever circumstances a person may find themselves in. If a person is there....then what about helping the support group/family? And last of all...if they so desire....precious metals to sit in a safe and gather dust.

[Jason]

Jason wrote: "The problem we have now is individuals within the market have co-opted the government. Those individuals could be constrained by the masses....but the masses have chosen their own self interests when it comes to sincere opposition. It begins and ends with the moral foundation."

Our form of government seems to incent people to behave badly. Groups have learned that they can get a big bang for the buck on government lobbying and infiltration (ie revolving door between public and private orgs). This is a basic principle of our form of government (and most forms of government), that of concentrated benefits and diffuse costs, described well in this book:

http://en.wikipedia.org/wiki/The_Logic_ ... ive_Action" onclick="window.open(this.href);return false;

A completely honest and hardworking people may be able to live peacefully without stealing under our form of government, but the temptation is ALWAYS there and it only takes a few to abuse it unless the rest are really watching out for it (and not watching for lies about how they can benefit from the legitimized theft and enslavement).

It seems like the best solution is more competition and less centralization in government, but that requires such a high level knowledge and understanding among the people to maintain it and resist centralization while remaining safe from outside invaders, that who knows if such things would work.

If we have a truly representational government....the government will reflect the desires of the people as a whole. We can get wrapped around the axle about the creation of money, or centralization of government power, etc etc etc.....but if each individual truly has a voice via a delegate....government will reflect the people - good or bad.

[Original_Intent]

Jason wrote: "The problem we have now is individuals within the market have co-opted the government. Those individuals could be constrained by the masses....but the masses have chosen their own self interests when it comes to sincere opposition. It begins and ends with the moral foundation."

Our form of government seems to incent people to behave badly. Groups have learned that they can get a big bang for the buck on government lobbying and infiltration (ie revolving door between public and private orgs). This is a basic principle of our form of government (and most forms of government), that of concentrated benefits and diffuse costs, described well in this book:

http://en.wikipedia.org/wiki/The_Logic_ ... ive_Action" onclick="window.open(this.href);return false;

A completely honest and hardworking people may be able to live peacefully without stealing under our form of government, but the temptation is ALWAYS there and it only takes a few to abuse it unless the rest are really watching out for it (and not watching for lies about how they can benefit from the legitimized theft and enslavement).

It seems like the best solution is more competition and less centralization in government, but that requires such a high level knowledge and understanding among the people to maintain it and resist centralization while remaining safe from outside invaders, that who knows if such things would work.

If we have a truly representational government....the government will reflect the desires of the people as a whole. We can get wrapped around the axle about the creation of money, or centralization of government power, etc etc etc.....but if each individual truly has a voice via a delegate....government will reflect the people - good or bad.

TARP was opposed by the electorate by something like 16 to 1 - of course a few "representatives" got retired over that, hope we can add Lord Hatch to that list a year from now..

[Jason]

Jason wrote: "The problem we have now is individuals within the market have co-opted the government. Those individuals could be constrained by the masses....but the masses have chosen their own self interests when it comes to sincere opposition. It begins and ends with the moral foundation."

Our form of government seems to incent people to behave badly. Groups have learned that they can get a big bang for the buck on government lobbying and infiltration (ie revolving door between public and private orgs). This is a basic principle of our form of government (and most forms of government), that of concentrated benefits and diffuse costs, described well in this book:

http://en.wikipedia.org/wiki/The_Logic_ ... ive_Action" onclick="window.open(this.href);return false;

A completely honest and hardworking people may be able to live peacefully without stealing under our form of government, but the temptation is ALWAYS there and it only takes a few to abuse it unless the rest are really watching out for it (and not watching for lies about how they can benefit from the legitimized theft and enslavement).

It seems like the best solution is more competition and less centralization in government, but that requires such a high level knowledge and understanding among the people to maintain it and resist centralization while remaining safe from outside invaders, that who knows if such things would work.

If we have a truly representational government....the government will reflect the desires of the people as a whole. We can get wrapped around the axle about the creation of money, or centralization of government power, etc etc etc.....but if each individual truly has a voice via a delegate....government will reflect the people - good or bad.

TARP was opposed by the electorate by something like 16 to 1 - of course a few "representatives" got retired over that, hope we can add Lord Hatch to that list a year from now..

LOL....I reckon I should have bold and underlined the "IF"......of course we started with a truly representational government though....so the endpoint still is a result of the choices made by the masses.

[Jason]

I'm going to step back into the spot light momentarily for three important (imo) news blipits with regard to finances -

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not.

The entire system has been utterly destroyed by the MF Global collapse.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago.

Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

http://www.zerohedge.com/news/entire-sy ... l-casualty" onclick="window.open(this.href);return false;

...what's the 100:1 (or whatever the ratio) "leverage" (i.e. debt) denominated in??? Most likely US dollars....

The entire dollar funding market is now at levels not seen since the Lehman collapse and is effectively frozen. Only this time it is much, much worse as never before has the global central bank cadre been assumed and implied to be backstopping the global liquidity cascade. Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets. The liquidity crunch explains why everyone is liquidating the one asset that is performing best YTD to procure much needed dollars - gold.

http://www.zerohedge.com/news/global-do ... quidations" onclick="window.open(this.href);return false;

...when the calling card comes due on the leverage and the ratio reverses for payment of debt.....where are the dollars going to come from? What will get liquidated to pay debt? What's the opposite of inflation?

As every central banker, politician (except Chuck Schumer), and bank CEO looks towards Chinese central planners as their apparent bottomless pit of dumb money, it seems that perhaps the cupboards are bare. Reuters, via The China Post, highlights in a recent article that while there are indeed reserves, they are gainfully employed and the unwinding of those positions (in size enough to matter) to provide the cash that is so desperately needed to keep the ponzi going, will itself cause a vicious circle of negative sentiment. In fact, analysts reckon China's armory has only about US$100 billion to spare.

The build-up in FX reserves, a result of the central bank's intervention to limit the yuan's appreciation, tends to fuel inflation pressures even as the central bank issues bills to mop up the amount of local currency it pumps into the economy.

And it explains why foreign reserves cannot easily be used for domestic spending on infrastructure or shoring up pension systems, since simply converting the cash risks driving up both inflation and the value of the yuan currency.

http://www.zerohedge.com/news/sorry-eur ... s-areempty" onclick="window.open(this.href);return false;

...Who controls the money? Who just recently threw Congress under a bus with the revealing of insider trading (after its been going on for decades - and plenty more of that to come I imagine as they try to make the final transition to complete dictatorship)?

[Moss Man]

Jason - would you cash-in your precious metals (if you had any) for reserve notes or hold onto them?