Inflation vs. Deflation debate

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2EstablishZion
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Re: Inflation vs. Deflation debate

Post by 2EstablishZion »

I believe there will be helicopter money. Probably in the first year of the next president's reign.

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

2EstablishZion wrote:I believe there will be helicopter money. Probably in the first year of the next president's reign.
Perhaps. Only way out of a deflationary collapse is debt forgiveness or helicopter money...

I believe they will resort to other methods of control...primarily war and also purple spots...

2EstablishZion
captain of 100
Posts: 337

Re: Inflation vs. Deflation debate

Post by 2EstablishZion »

I only believe in helicopter money because I keep thinking Boobus Americanus is going to get a clue, grab pitchforks and torches, and "helicopter money" will be the elites way to appease the angry mobs (at least for the short term) while they make their collective egress to destinations unknown.

I don't think that eliminates wars and purple spots - wars at least are pretty much inevitable when we inevitably default on our debts (which helicopter money will have only increased). Purple spots are also inevitable I think due to prophecy, unless we repent on a massive scale - which I don't like the odds of that happening.

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

2EstablishZion wrote:I only believe in helicopter money because I keep thinking Boobus Americanus is going to get a clue, grab pitchforks and torches, and "helicopter money" will be the elites way to appease the angry mobs (at least for the short term) while they make their collective egress to destinations unknown.

I don't think that eliminates wars and purple spots - wars at least are pretty much inevitable when we inevitably default on our debts (which helicopter money will have only increased). Purple spots are also inevitable I think due to prophecy, unless we repent on a massive scale - which I don't like the odds of that happening.
I'm not putting down your opinion. Certainly thoughtful and as justified by past history (or more so) than my thoughts on the matter.

The basis for my opinion is the extensive prophetic counsel up to the current day of getting out of debt....which in a hyperinflationary environment becomes quite meaningless. As I've reconciled my thoughts on the economic aspect, the gadianton aspect, and the prophetic aspect...I've come to believe the end of the day will be deflationary.

In terms of how the elite deal with the masses...I believe they will soon come to the conclusion (if not already - Georgia guidestones) that the only answer is to eradicate the majority of the population. War is simply a sideshow attraction to distract people and keep them occupied/focused on an event/object whilst the hand does its moving. Also allows the invoking of powers in the name of the cause that otherwise might not be tapped into (allowed by the people). I think that's why the purple spots will roll forth.

Anyways my attempt at trying to guess the future in light of what I know (prophesies, economics, politics, combinations, etc)...fwiw...

No matter the accuracy of the forecast...interesting times upon us and certainly very interesting times ahead....

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Original_Intent
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Re: Inflation vs. Deflation debate

Post by Original_Intent »

I believe the debt free counsel is because it is in accordance with eternal principles. I do no think even if hyperinflation was on the horizon that the prophetic counsel would change to "Hurry up and rack up all the debt you can!". In other words, I don't believe that this counsel means deflation.

I think you have been right about deflation and deflation is what we are seeing and have been seeing. What we know is that TPTB (financial) need both inflation and deflation, and the more they can catch the majority "off-guard" and also the more extreme they can make both swings of the pendulum, the more they can reap the benefits due to foreknowledge of which way they are going to go.

I think that all of the QE and ZIRP is inherently inflationary, but they have managed to hide it due to rapidly rising prices of goods and flat wages. The inflation of the money has gone to a select few on Wall Street, which has inflated the monetary supply while the vast majority live in a deflationary reality.

It's all distortion of markets and interest rates, and I feel that there are eternal laws that govern these things. Right now we are seeing man exerting his will in opposition to the eternal principles - just meaning when the consequences inevitably come, it's going to be a pretty big deal.

Definitely not a matter of you are right, or I am right, it's all a matter of timing. there's going to be deflation, there is going to be inflation as long as the current system is in place. Appreciate your insights and glad you still post from time to time.

2EstablishZion
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Posts: 337

Re: Inflation vs. Deflation debate

Post by 2EstablishZion »

Jason, I don;t know if you have taken the Briggs-Myers personality test, but I highly suspect you are a fellow INTJ or something close to it (?)

I think this forum attracts a disproportionate number of INTJs....

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

2EstablishZion wrote:Jason, I don;t know if you have taken the Briggs-Myers personality test, but I highly suspect you are a fellow INTJ or something close to it (?)

I think this forum attracts a disproportionate number of INTJs....
nice analysis! ...back and forth between INFJ & INTJ

2EstablishZion
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Posts: 337

Re: Inflation vs. Deflation debate

Post by 2EstablishZion »

My son is an INFJ those are even more rare than INTJ! Like you he has bounced between INTJ and INFJ.

Myself, I have never tested other than INTJ lol

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

2EstablishZion wrote:My son is an INFJ those are even more rare than INTJ! Like you he has bounced between INTJ and INFJ.

Myself, I have never tested other than INTJ lol
fascinating...and again great analytic work!

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

13 trillion reasons for deflation....

Dutch bonds just did something that we haven't seen in 499 years
http://www.businessinsider.com/dutch-10 ... ime-2016-7" onclick="window.open(this.href);return false;

....why else would folks buy into negative yielding bonds? Isn't that a bet that the actual deflation is going to be much worse than the priced in deflation?

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Jason
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Re: Inflation vs. Deflation debate

Post by Jason »

Image

...globalization of money....and corresponding debt saturation...and corresponding slump in production as money flow slows down and interest siphons off available cash...

Velocity of MZM Money Stock
https://fred.stlouisfed.org/series/MZMV" onclick="window.open(this.href);return false;

Velocity of M2 Money Stock
https://fred.stlouisfed.org/series/M2V" onclick="window.open(this.href);return false;

China's exports and imports fell more than expected in July in a rocky start to the third quarter, pointing to further weakness in global demand in the aftermath of Britain's decision to leave the European Union.
http://www.reuters.com/article/us-china ... SKCN10J0AA" onclick="window.open(this.href);return false;

There’s a river of steel flooding from China despite the best efforts of governments around the world to dam the flow from the top producer, with data on Monday showing that overseas shipments held above 10 million tons in July.
http://www.bloomberg.com/news/articles/ ... sions-rise" onclick="window.open(this.href);return false;

...further consolidation of production to China....artificially (i.e. supported by globalists and every US politician from Obama to Ron Paul)...

With the potential to touch on 64 countries, 4.4 billion people and around 40 percent of the global economy, Jen estimates that the One Belt One Road project will be 12 times bigger in absolute dollar terms than the Marshall Plan. China may spend as much as 9 percent of gross domestic product -- about double the U.S.'s boost to post-war Europe in those terms.
http://www.bloomberg.com/news/articles/ ... shall-plan" onclick="window.open(this.href);return false;

....world power???
In early 2005, the US Senate began debating a bill seeking to impose a broad 27.5% tariff on Chinese exports to the United States. Congress was emotionally moved by the supposed problem of pegging the yuan to the dollar, then at about 8.28 CNY for every USD. In reality, the problem wasn’t so much dollars as “dollars”, meaning that because of the flow of finance across borders the flow of goods could be, though for only a short while longer, a one-way trade. In other words, even the government started to notice that so much of the stuff Americans were buying during the housing bubble was stamped “Made in China.”

The Chinese, for all the bluster on both sides, did listen. Symbolically, the PBOC in late July 2005 finally let CNY appreciate by a whole 2.1%. The official central bank statement declared that it was done “with a view to establish and improve the socialist market economic system.” The Chinese could afford it because they had already dominated the American market and were by then starting to do the same in Europe and elsewhere.

In 2004, the Chinese had managed a merchandise trade surplus of about $33 billion. This was a dramatic change from fifteen years or so prior where an agrarian China imported almost every industrial product, from cars to microwaves and anything in between. “Something” came along in the late 1990’s that completely changed the global trade paradigm.

American “demand” was the primary basis and core of that which built China, all financed by eurodollar explosion in both directions.
http://davidstockmanscontracorner.com/s ... ll-friday/" onclick="window.open(this.href);return false;
"most favoured nation" status for the People's Republic of China by the United States created controversy because of its sales of sensitive military technology and China's serious and continuous persecution of human rights.[5] China's MFN status was made permanent on December 27, 2001. All of the former Soviet states, including Russia, were granted MFN status in 1996. On a bilateral level, however, the United States could not grant MFN status to some members of the former Soviet Union, including the Russian Federation, because of the Jackson-Vanik amendment. This presented an obstacle to those countries' accession to the WTO.[6] At the urging of Vice President Joe Biden,[7] the Jackson-Vanik amendment was repealed on December 14, 2012.[8]

In 1998, in the United States, "most favoured nation status" has been renamed "permanent normal trade relations" (NTR) as all but a handful of countries had this status already. (The impetus for the change in terminology came from irritation voiced by some Americans that various totalitarian governments around the world enjoyed being a MFN of the United States).[citation needed]

Since 1998, the term normal trade relations (NTR) has replaced most favoured nation in all U.S. statutes. This change was included in section 5003 of the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206). However, Title IV of the Trade Act of 1974 (P.L. 93-618) established conditions on U.S. MFN/NTR tariff treatment to certain non-market economies, one of which is certain freedom-of-emigration requirements (better known as the Jackson-Vanik amendment). The act authorizes the president to waive a country’s full compliance with Jackson-Vanik under specified conditions, and this must be renewed by June 3 of each year. Once the president does so, the waiver is automatic unless Congress passes (and avoids or overturns a presidential veto of) a disapproval resolution.
https://en.wikipedia.org/wiki/Most_favoured_nation" onclick="window.open(this.href);return false;

President Clinton Thursday reversed course on China and renewed its trade privileges despite what he said was Beijing's lack of significant progress on human rights. Echoing the case made by George Bush when he was president, Clinton said he was convinced the Chinese would take more steps to improve human rights if the issue were separated from the threat of trade sanctions.
http://tech.mit.edu/V114/N27/china.27w.html" onclick="window.open(this.href);return false;

Despite strains in Sino-American relations, the House on June 27 overwhelmingly defeated an attempt to withdraw China's most-favored-nation (MFN) trading status. MFN, which was granted to all but a handful of nations, allowed a country's goods to enter the United States at low, non-discriminatory tariff rates.
https://library.cqpress.com/cqalmanac/d ... 96-1092700" onclick="window.open(this.href);return false;
In 2000, the United States forged its current economic relationship with China by permanently granting it most-favored-nation trade status and, eventually, helping the country enter the World Trade Organization. The unspoken deal, though, went something like this: China could make a lot of cheap goods, which would benefit U.S. consumers, even if it cost the country countless low-end manufacturing jobs. And rather than, say, fight for an extra bit of market share in Chicago, American multinationals could offset any losses because of competition by entering a country with more than a billion people — including the fastest-growing middle class in history — just about to buy their first refrigerators, TVs and cars. It was as if the United States added a magical 51st state, one that was bigger and grew faster than all the others. We would all be better off.

More than a decade later, many are waiting for the payoff.

Yet probably the greatest barrier to Chinese consumption is the policy of China’s Central Bank. Every month, the United States buys around $35 billion in goods and services from China and sells around $11 billion back. That, of course, leaves a $24 billion trade deficit. Currencies work like any other salable good in that they adjust based on supply and demand. Every month, the United States is demanding a lot of renminbi and China is demanding few U.S. dollars. The natural result should be for the dollar to get weaker as the renminbi gets stronger.

But China’s government prevents that adjustment by artificially increasing the demand for dollars, spending much of that $24 billion surplus on U.S. Treasury bonds. This sounds boring, but it effectively makes all Chinese exports somewhere around 25 percent cheaper and all U.S. imports to China, effectively, about 25 percent more expensive.

But the long-term impact is disastrous.

The currency intervention also functions as a massive inequality-creation machine. U.S.-based behemoths, which own or use many of those exporting Chinese factories, benefit, as do their shareholders. And because more than 90 percent of U. S. stocks are owned by the wealthiest 20 percent, the spoils are disproportionately concentrated at the top. Meanwhile, lower wages, lost jobs and crippled manufacturing employment fall on the less wealthy. The economists that I spoke to estimated that China’s currency policy has cost the U.S. between 200,000 and 3 million jobs. Of course, the wide range suggests that these are little more than educated guesses. But a broad picture does emerge. U.S. manufacturing employment has fallen by around 6 million over the last decade.

Given this, it may seem odd that China’s currency policy isn’t the beginning and end of every single political stump speech. After all, it’s probably the one thing that, if changed, could instantly bring both jobs and more equality to this country.

http://www.nytimes.com/2012/01/29/magaz ... .html?_r=0" onclick="window.open(this.href);return false;
On more than one occasion, Ron Paul resisted attempts to end Most Favored Nation (MFN) status to China. The entire concept of MFN status is anathema to liberty due to its treaty implications with regard to the heinous World Trade Organization. As the article below argues, MFN empowers the executive branch and also the World Trade Organization to clamp down on nationwide, state, and local efforts to curtail such things as human slavery for financial gain and the cessation of sensitive arm sales to nations that actively use them against us (as China has done on a frightening scale).

He voted against HJR 79 in 2007, which was a “vote to adopt a resolution that disapproves of President Clinton’s renewal of China’s Most-Favored-Nation status through July 3, 1998.”

He voted against HJR 105 in 2008, which disapproved of MFN status for China
http://beforeitsnews.com/libertarian/20 ... 50253.html" onclick="window.open(this.href);return false;

PAUL: You have to create the right conditions to bring these companies back, and they have to bring their capital back and shouldn't be taxed. Apple's a great company, but the way you ask the question, it infers that because there's a bunch of workers overseas, it hasn't benefited a lot of people here. The consumers obviously have been benefited by a good company, well run. But a lot of people worry about us buying and the money going overseas. But if you send money to China, they have to spend those dollars. Unfortunately, they're buying our debt and perpetuating our consumerism here and our debt here. But also, when you get products, let's say the computer costs $100 instead of $1000. Well, the person's just saved $900. That helps the economy. That $900 stays in that person's pocket. So we shouldn't be frightened about trade or sending money on.
http://www.ontheissues.org/TX/Ron_Paul_Free_Trade.htm" onclick="window.open(this.href);return false;

China wants to overtake the U.S. to become the world’s biggest economy. That could happen in about 10 years
http://www.bloomberg.com/graphics/2016- ... a-economy/" onclick="window.open(this.href);return false;

China GDP Annual Growth Rate 1989-2016
http://www.tradingeconomics.com/china/gdp-growth-annual" onclick="window.open(this.href);return false;

China displaced the United States as the world’s largest manufacturing nation in 2010 and widened its lead in 2013
https://www.mapi.net/blog/2015/09/china ... nufacturer" onclick="window.open(this.href);return false;

....how was WWII won? I believe by manufacturing capability....
The U.S. share of global manufacturing value added has declined over time, from 29% in the early 1980s to 17.2% in 2014 (see Figure 2). Similarly, Japan’s share of global manufacturing value added has contracted from a peak of 21.3% in 1993to around 7% now, and Germany’s has fallen from 10.4% (in 1992, just after the incorporation of the former German Democratic Republic into the Federal Republic of Germany) to 6.5%.

In 2014, 58% of foreign direct investment coming into the United States went into the manufacturing sector. The vast majority of this investment, some $76 billion, involved acquisition of pharmaceutical manufacturers.
https://fas.org/sgp/crs/misc/R42135.pdf" onclick="window.open(this.href);return false;

...if you wonder where this is leading...consider what your local Walmart would look like if war with China broke out...we do make lots of pills though (pop a few and may not care for awhile)....

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Jason
Master of Puppets
Posts: 18296

Re: Inflation vs. Deflation debate

Post by Jason »

China's Currency Policy Approaches Breaking Point

Here’s how it plays out: As the world’s dominant reserve currency, the dollar has no peer. International Monetary Fund data show that the greenback accounts for 63.3 percent of global foreign-exchange reserves, with the euro next at 20.3 percent, followed by the British pound and Japanese yen, both at 4.5 percent. That means that in times of crisis, the dollar benefits from global investors seeking a haven, even if the strife and the the uncertainty emanates from the U.S.

It’s possible that a trade war would drive flows into the dollar, putting upward pressure on the currency at the expense of other exchange rates. That would be on top of the natural demand for the greenback created by the anticipation of significant fiscal stimulus floated by the Trump administration and a faster pace of interest-rate increases by the Federal Reserve.

Although the pace of depletion of China’s foreign-exchange reserves has eased from $100 billion per month in late 2015, the leakage shows no signs of abating. The $3 trillion official figure for China’s reserves probably overstates the amount of dollars actually available for intervention to support the yuan by at least $1 trillion, possibly more. At least $500 billion of reserves are “encumbered” by forward sales of dollars by the Chinese authorities, which they will actually have to deliver in the future.

The IMF estimates that China needs at least $2.6 trillion of “working capital” to allow companies and the government to conduct import/export operations. The “working capital” is unlikely to be available to defend the yuan because that money has to be held “in reserve” as a fiscal backstop if systemically important Chinese firms with dollar exposure are threatened with insolvency.
https://www.bloomberg.com/view/articles ... king-point" onclick="window.open(this.href);return false;
The problem in a nutshell:

A worsening debt crisis and slowing growth have capital fleeing China as fast as its feet will allow. The Institute of International Finance reports that capital outflows swelled to a record $725 billion last year.

China’s desperate to keep that capital at home to support the economy. And it’s been burning holes in its dollar reserves to support the yuan. Selling its dollar holdings to buy yuan puts footings under the yuan. Makes it more attractive. Halts the capital flight.

But the fire can only burn so long before it torches the remaining reserves…

A $2.99 trillion war chest or a $3 trillion war chest sounds like plenty. But as Jim Rickards explained recently, it’s not nearly as much as it sounds:

Of the $3 trillion that China has left, only $1 trillion of that is a liquid. One trillion is invested in hedge funds, private equity funds, gold mines, et cetera. That money is not liquid. It cannot be used to support the currency, so remove a trillion.

That leaves $2 trillion:

Another trillion has to be held on what’s called a precautionary reserve to bail out their banking system. The Chinese banks are completely insolvent. That system is going to need to be bailed out sooner rather than later.

Scratch another trillion:

That leaves only $1 trillion of the original $4 trillion in liquid form. The problem is that capital flight is continuing at a rate of $1 trillion per year, so China will be devoid of usable liquid assets by late 2017.

Repeating: Two-thirds of China’s reserves are doing other service. About $1 trillion remains. But at the going rate, China will burn through its usable reserves by the end of the year.
https://dailyreckoning.com/92458-2/" onclick="window.open(this.href);return false;
More than $1 trillion of junk-rated corporate debt is slated to mature over the next five years, creating a stiff challenge for heavily-indebted businesses if the market for riskier debt were to deteriorate, according to a new report from Moody’s Investors Service. The $1.063 trillion in maturing debt is the highest ever recorded by the ratings firm over a five-year period and also includes the highest single-year volume in 2021, when $402 billion of junk-rated corporate debt is scheduled to come due. Overall, a little more than $2 trillion of corporate debt is scheduled to mature by 2021 when factoring in $944 billion of investment-grade bonds.
http://blogs.wsj.com/moneybeat/2017/02/ ... t-5-years/" onclick="window.open(this.href);return false;
Image

The head of Italy's bank-bailout fund said on Tuesday the country lacked a clear strategy for shifting 356 billion euros ($381 billion) in problem loans.
http://uk.reuters.com/article/us-italy- ... KKBN15M28B" onclick="window.open(this.href);return false;


Things can change pretty rapidly...
In 2011, ExxonMobil, Chevron and Conocophillips enjoyed a combined $80.4 billion in net income profits. ExxonMobil recorded the highest net income of the group by posting a $41.1 billion gain, followed by Chevron at $26.9 billion, while ConocoPhillips came in third at $12.4 billion.

However, the rapidly falling oil price, since the latter part of 2014, totally gutted the profits at these top oil producers. In just five short years, ExxonMobil’s net income declined to $7.8 billion, Chevron reported its first $460 million loss while ConocoPhillips shaved another $3.6 billion off its bottom line in 2016. Thus, the combined net income of these three oil companies in 2016 totaled $3.7 billion versus $80.4 billion in 2011.
https://srsroccoreport.com/the-blood-ba ... -industry/" onclick="window.open(this.href);return false;

Interesting world we live in...always subject to change...

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Mark
Level 34 Illuminated
Posts: 6929

Re: Inflation vs. Deflation debate

Post by Mark »

Jason wrote:
China's Currency Policy Approaches Breaking Point

Here’s how it plays out: As the world’s dominant reserve currency, the dollar has no peer. International Monetary Fund data show that the greenback accounts for 63.3 percent of global foreign-exchange reserves, with the euro next at 20.3 percent, followed by the British pound and Japanese yen, both at 4.5 percent. That means that in times of crisis, the dollar benefits from global investors seeking a haven, even if the strife and the the uncertainty emanates from the U.S.

It’s possible that a trade war would drive flows into the dollar, putting upward pressure on the currency at the expense of other exchange rates. That would be on top of the natural demand for the greenback created by the anticipation of significant fiscal stimulus floated by the Trump administration and a faster pace of interest-rate increases by the Federal Reserve.

Although the pace of depletion of China’s foreign-exchange reserves has eased from $100 billion per month in late 2015, the leakage shows no signs of abating. The $3 trillion official figure for China’s reserves probably overstates the amount of dollars actually available for intervention to support the yuan by at least $1 trillion, possibly more. At least $500 billion of reserves are “encumbered” by forward sales of dollars by the Chinese authorities, which they will actually have to deliver in the future.

The IMF estimates that China needs at least $2.6 trillion of “working capital” to allow companies and the government to conduct import/export operations. The “working capital” is unlikely to be available to defend the yuan because that money has to be held “in reserve” as a fiscal backstop if systemically important Chinese firms with dollar exposure are threatened with insolvency.
https://www.bloomberg.com/view/articles ... king-point" onclick="window.open(this.href);return false;
The problem in a nutshell:

A worsening debt crisis and slowing growth have capital fleeing China as fast as its feet will allow. The Institute of International Finance reports that capital outflows swelled to a record $725 billion last year.

China’s desperate to keep that capital at home to support the economy. And it’s been burning holes in its dollar reserves to support the yuan. Selling its dollar holdings to buy yuan puts footings under the yuan. Makes it more attractive. Halts the capital flight.

But the fire can only burn so long before it torches the remaining reserves…

A $2.99 trillion war chest or a $3 trillion war chest sounds like plenty. But as Jim Rickards explained recently, it’s not nearly as much as it sounds:

Of the $3 trillion that China has left, only $1 trillion of that is a liquid. One trillion is invested in hedge funds, private equity funds, gold mines, et cetera. That money is not liquid. It cannot be used to support the currency, so remove a trillion.

That leaves $2 trillion:

Another trillion has to be held on what’s called a precautionary reserve to bail out their banking system. The Chinese banks are completely insolvent. That system is going to need to be bailed out sooner rather than later.

Scratch another trillion:

That leaves only $1 trillion of the original $4 trillion in liquid form. The problem is that capital flight is continuing at a rate of $1 trillion per year, so China will be devoid of usable liquid assets by late 2017.

Repeating: Two-thirds of China’s reserves are doing other service. About $1 trillion remains. But at the going rate, China will burn through its usable reserves by the end of the year.
https://dailyreckoning.com/92458-2/" onclick="window.open(this.href);return false;
More than $1 trillion of junk-rated corporate debt is slated to mature over the next five years, creating a stiff challenge for heavily-indebted businesses if the market for riskier debt were to deteriorate, according to a new report from Moody’s Investors Service. The $1.063 trillion in maturing debt is the highest ever recorded by the ratings firm over a five-year period and also includes the highest single-year volume in 2021, when $402 billion of junk-rated corporate debt is scheduled to come due. Overall, a little more than $2 trillion of corporate debt is scheduled to mature by 2021 when factoring in $944 billion of investment-grade bonds.
http://blogs.wsj.com/moneybeat/2017/02/ ... t-5-years/" onclick="window.open(this.href);return false;
Image

The head of Italy's bank-bailout fund said on Tuesday the country lacked a clear strategy for shifting 356 billion euros ($381 billion) in problem loans.
http://uk.reuters.com/article/us-italy- ... KKBN15M28B" onclick="window.open(this.href);return false;


Things can change pretty rapidly...
In 2011, ExxonMobil, Chevron and Conocophillips enjoyed a combined $80.4 billion in net income profits. ExxonMobil recorded the highest net income of the group by posting a $41.1 billion gain, followed by Chevron at $26.9 billion, while ConocoPhillips came in third at $12.4 billion.

However, the rapidly falling oil price, since the latter part of 2014, totally gutted the profits at these top oil producers. In just five short years, ExxonMobil’s net income declined to $7.8 billion, Chevron reported its first $460 million loss while ConocoPhillips shaved another $3.6 billion off its bottom line in 2016. Thus, the combined net income of these three oil companies in 2016 totaled $3.7 billion versus $80.4 billion in 2011.
https://srsroccoreport.com/the-blood-ba ... -industry/" onclick="window.open(this.href);return false;

Interesting world we live in...always subject to change...

Hey brother glad to see you are still among the living. I ran into a lady visiting from North Dakota yesterday and she just praised the Utah weather saying it was 5 below back home. Brrrr..

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Original_Intent
Level 34 Illuminated
Posts: 13008

Re: Inflation vs. Deflation debate

Post by Original_Intent »

Great to hear from you, Glenn!

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Jason
Master of Puppets
Posts: 18296

Re: Inflation vs. Deflation debate

Post by Jason »

Thanks Mark & Kevin...yeah weather up north here keeps things on the chill side. Way better than Colorado's methods....

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Jason
Master of Puppets
Posts: 18296

Re: Inflation vs. Deflation debate

Post by Jason »

And the Winner is? Deflation.

With an historic 2000 point drop in the Dow Jones Industrials on Monday in response to Saudi Arabia and Russia declaring an oil price war on, well, everyone it’s clear that one of the two ‘flations, deflation, has won out.

In retrospect the timing out that post was pretty good, because just a few weeks later the repo markets seized up, SOFR zoomed to an all-time high of more than 10% and the Fed was awoken from its slumber to begin intervening to keep markets from collapsing.

It initiated a reflation trade based on the hope that the Fed just being there was all that was needed to restore confidence in global markets.

In that post I made the point that the choice between inflation and deflation is a non-choice. They are two sides of the same coin. The question is only who benefits from which side.

Those in power always choose inflation because, in their minds, it is less upsetting to the social order than deflation.

And their power rests on maintaining the current social order.

Ultimately this inflation game is a Ponzi scheme. The amount of money going to pay off the debt eventually becomes greater than the next round of debt you can sell to the greater fool.

And no amount of money printing can fill the void when the entire edifice begins to collapse.

That’s what’s happening today. There is no fixing the plumbing of the global financial system at the repo window. Nor can lower interest rates help stimulate demand no matter what President Trump thinks.

So he can berate the Fed all he likes, rates want to go higher because the demand for dollars is acute and the market is willing to pay a far higher rate than 1.0% to get them.

All that can happen now is assets deflate and into that vortex of deflation they’ll pour endless amounts of new money in the vain hope of filling up the void.

What happened this week occurs when one who has saved, Russia, decided that it no longer wanted to subsidize those who have borrowed to the hilt. When Russia said, “No!” on Friday to cutting production to support asset prices based on $60 per barrel oil, they were saying that’s enough.

I like to think of global trade in real goods as the M0, or base money, of the global financial system and the oil trade that which is the M0 of that.

All of the credit, government debt, corporate debt, stocks prices and the rest are simply credit derivatives in a fractional reserve banking system of that fundamental trade in goods and services.

And the value of the monetary base for global trade was just halved in the last six weeks with the price of oil crashing from $70 per barrel (Brent) to around $35.

We all know what happens with the Fed raises rates and contracts its balance sheet. We get deflation.
https://tomluongo.me/2020/03/10/the-win ... deflation/

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Original_Intent
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Posts: 13008

Re: Inflation vs. Deflation debate

Post by Original_Intent »

Jason wrote: March 11th, 2020, 10:47 am
And the Winner is? Deflation.

With an historic 2000 point drop in the Dow Jones Industrials on Monday in response to Saudi Arabia and Russia declaring an oil price war on, well, everyone it’s clear that one of the two ‘flations, deflation, has won out.

In retrospect the timing out that post was pretty good, because just a few weeks later the repo markets seized up, SOFR zoomed to an all-time high of more than 10% and the Fed was awoken from its slumber to begin intervening to keep markets from collapsing.

It initiated a reflation trade based on the hope that the Fed just being there was all that was needed to restore confidence in global markets.

In that post I made the point that the choice between inflation and deflation is a non-choice. They are two sides of the same coin. The question is only who benefits from which side.

Those in power always choose inflation because, in their minds, it is less upsetting to the social order than deflation.

And their power rests on maintaining the current social order.

Ultimately this inflation game is a Ponzi scheme. The amount of money going to pay off the debt eventually becomes greater than the next round of debt you can sell to the greater fool.

And no amount of money printing can fill the void when the entire edifice begins to collapse.

That’s what’s happening today. There is no fixing the plumbing of the global financial system at the repo window. Nor can lower interest rates help stimulate demand no matter what President Trump thinks.

So he can berate the Fed all he likes, rates want to go higher because the demand for dollars is acute and the market is willing to pay a far higher rate than 1.0% to get them.

All that can happen now is assets deflate and into that vortex of deflation they’ll pour endless amounts of new money in the vain hope of filling up the void.

What happened this week occurs when one who has saved, Russia, decided that it no longer wanted to subsidize those who have borrowed to the hilt. When Russia said, “No!” on Friday to cutting production to support asset prices based on $60 per barrel oil, they were saying that’s enough.

I like to think of global trade in real goods as the M0, or base money, of the global financial system and the oil trade that which is the M0 of that.

All of the credit, government debt, corporate debt, stocks prices and the rest are simply credit derivatives in a fractional reserve banking system of that fundamental trade in goods and services.

And the value of the monetary base for global trade was just halved in the last six weeks with the price of oil crashing from $70 per barrel (Brent) to around $35.

We all know what happens with the Fed raises rates and contracts its balance sheet. We get deflation.
https://tomluongo.me/2020/03/10/the-win ... deflation/
Where's my $5/oz. silver, bro? ;)

GrinBearIt
captain of 100
Posts: 507

Re: Inflation vs. Deflation debate

Post by GrinBearIt »

Original_Intent wrote: July 28th, 2020, 3:36 pm
Jason wrote: March 11th, 2020, 10:47 am
And the Winner is? Deflation.

With an historic 2000 point drop in the Dow Jones Industrials on Monday in response to Saudi Arabia and Russia declaring an oil price war on, well, everyone it’s clear that one of the two ‘flations, deflation, has won out.

In retrospect the timing out that post was pretty good, because just a few weeks later the repo markets seized up, SOFR zoomed to an all-time high of more than 10% and the Fed was awoken from its slumber to begin intervening to keep markets from collapsing.

It initiated a reflation trade based on the hope that the Fed just being there was all that was needed to restore confidence in global markets.

In that post I made the point that the choice between inflation and deflation is a non-choice. They are two sides of the same coin. The question is only who benefits from which side.

Those in power always choose inflation because, in their minds, it is less upsetting to the social order than deflation.

And their power rests on maintaining the current social order.

Ultimately this inflation game is a Ponzi scheme. The amount of money going to pay off the debt eventually becomes greater than the next round of debt you can sell to the greater fool.

And no amount of money printing can fill the void when the entire edifice begins to collapse.

That’s what’s happening today. There is no fixing the plumbing of the global financial system at the repo window. Nor can lower interest rates help stimulate demand no matter what President Trump thinks.

So he can berate the Fed all he likes, rates want to go higher because the demand for dollars is acute and the market is willing to pay a far higher rate than 1.0% to get them.

All that can happen now is assets deflate and into that vortex of deflation they’ll pour endless amounts of new money in the vain hope of filling up the void.

What happened this week occurs when one who has saved, Russia, decided that it no longer wanted to subsidize those who have borrowed to the hilt. When Russia said, “No!” on Friday to cutting production to support asset prices based on $60 per barrel oil, they were saying that’s enough.

I like to think of global trade in real goods as the M0, or base money, of the global financial system and the oil trade that which is the M0 of that.

All of the credit, government debt, corporate debt, stocks prices and the rest are simply credit derivatives in a fractional reserve banking system of that fundamental trade in goods and services.

And the value of the monetary base for global trade was just halved in the last six weeks with the price of oil crashing from $70 per barrel (Brent) to around $35.

We all know what happens with the Fed raises rates and contracts its balance sheet. We get deflation.
https://tomluongo.me/2020/03/10/the-win ... deflation/
Where's my $5/oz. silver, bro? ;)
It's actually $2.5/oz. it's cheap. Just lop a zero off!

User avatar
Jason
Master of Puppets
Posts: 18296

Re: Inflation vs. Deflation debate

Post by Jason »

Original_Intent wrote: July 28th, 2020, 3:36 pm
Jason wrote: March 11th, 2020, 10:47 am
And the Winner is? Deflation.

With an historic 2000 point drop in the Dow Jones Industrials on Monday in response to Saudi Arabia and Russia declaring an oil price war on, well, everyone it’s clear that one of the two ‘flations, deflation, has won out.

In retrospect the timing out that post was pretty good, because just a few weeks later the repo markets seized up, SOFR zoomed to an all-time high of more than 10% and the Fed was awoken from its slumber to begin intervening to keep markets from collapsing.

It initiated a reflation trade based on the hope that the Fed just being there was all that was needed to restore confidence in global markets.

In that post I made the point that the choice between inflation and deflation is a non-choice. They are two sides of the same coin. The question is only who benefits from which side.

Those in power always choose inflation because, in their minds, it is less upsetting to the social order than deflation.

And their power rests on maintaining the current social order.

Ultimately this inflation game is a Ponzi scheme. The amount of money going to pay off the debt eventually becomes greater than the next round of debt you can sell to the greater fool.

And no amount of money printing can fill the void when the entire edifice begins to collapse.

That’s what’s happening today. There is no fixing the plumbing of the global financial system at the repo window. Nor can lower interest rates help stimulate demand no matter what President Trump thinks.

So he can berate the Fed all he likes, rates want to go higher because the demand for dollars is acute and the market is willing to pay a far higher rate than 1.0% to get them.

All that can happen now is assets deflate and into that vortex of deflation they’ll pour endless amounts of new money in the vain hope of filling up the void.

What happened this week occurs when one who has saved, Russia, decided that it no longer wanted to subsidize those who have borrowed to the hilt. When Russia said, “No!” on Friday to cutting production to support asset prices based on $60 per barrel oil, they were saying that’s enough.

I like to think of global trade in real goods as the M0, or base money, of the global financial system and the oil trade that which is the M0 of that.

All of the credit, government debt, corporate debt, stocks prices and the rest are simply credit derivatives in a fractional reserve banking system of that fundamental trade in goods and services.

And the value of the monetary base for global trade was just halved in the last six weeks with the price of oil crashing from $70 per barrel (Brent) to around $35.

We all know what happens with the Fed raises rates and contracts its balance sheet. We get deflation.
https://tomluongo.me/2020/03/10/the-win ... deflation/
Where's my $5/oz. silver, bro? ;)
LOL...good question! So much for my crystal ball huh....

It was looking feasible in mid March...prior to massive stimulus. That said, the stimulus is a temporary injection in the midst of demand and production destruction....

For instance black gold....

An interesting year none the less and we are just heading into the Great Reset...so I propose reviewing the price of silver again towards the end of the year after unemployment, mortgage payment deferrals, and all the rest come to a close.

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harakim
captain of 1,000
Posts: 2819
Location: Salt Lake Megalopolis

Re: Inflation vs. Deflation debate

Post by harakim »

Deflation would be great for people with money and terrible for people with debt. If there really is an evil cabal, they want deflation. And with how much debt is out there, just not issuing money would lead to rapid deflation. So if inflation happens, I'll take that as a sign that there is not an evil cabal with control, or else they are going to make the inflation beneficial only if people take the mark of the beast or something else which will give them even MORE power.

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Jason
Master of Puppets
Posts: 18296

Re: Inflation vs. Deflation debate

Post by Jason »

harakim wrote: July 30th, 2020, 10:06 am Deflation would be great for people with money and terrible for people with debt. If there really is an evil cabal, they want deflation. And with how much debt is out there, just not issuing money would lead to rapid deflation. So if inflation happens, I'll take that as a sign that there is not an evil cabal with control, or else they are going to make the inflation beneficial only if people take the mark of the beast or something else which will give them even MORE power.
My beliefs on it...

There is a management or control challenge at stake for those with money and power...

Thus deflation must be managed and they cannot afford to let it get out of hand...

They need to complete the plans laid so many years and decades prior and obtain complete control...the Great Reset.

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ori
captain of 1,000
Posts: 1228

Re: Inflation vs. Deflation debate

Post by ori »

I wonder if the current coin shortage will help lead to more deflation?

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Original_Intent
Level 34 Illuminated
Posts: 13008

Re: Inflation vs. Deflation debate

Post by Original_Intent »

ori wrote: July 30th, 2020, 1:22 pm I wonder if the current coin shortage will help lead to more deflation?
The fake coin shortage is to convince people that e-currency is the solution to all of our problems

As far as the meta "inflation vs. deflation" - deflation will definitely have its day in the sun. It's only by alternatively using both that the Fed is able to strip maximum real wealth out of the system.

Currently I think they are making the stock market look like a "no-lose" situation to draw every last "Robin Hooder" (no reference to LDSFF user) in to the honey pot.

Even in deflation I think a few things will retain value. But when it happens expect (imho):
Housing Crash
Equity Crash
Derivative Crash
Unemployment that will make the current situation seem like a Sunday School picnic
Rampant civil unrest leading to massive gun control (I believe they would like to hold off the reset that Glenn speaks of until they have most of the guns.)

At that point, I hope you have figured out a way to produce most of what you need or offer some value via service. It won;t be pretty for useless eaters at that point.

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Original_Intent
Level 34 Illuminated
Posts: 13008

Re: Inflation vs. Deflation debate

Post by Original_Intent »

harakim wrote: July 30th, 2020, 10:06 am Deflation would be great for people with money and terrible for people with debt. If there really is an evil cabal, they want deflation. And with how much debt is out there, just not issuing money would lead to rapid deflation. So if inflation happens, I'll take that as a sign that there is not an evil cabal with control, or else they are going to make the inflation beneficial only if people take the mark of the beast or something else which will give them even MORE power.
You aren't wrong, but hopefully what I am about to say will give you a paradigm shift. :)
Inflation is great for people who own stocks, who own real assets, and yes, those who own debt.
Most of the wealthy do not sit on piles of cash. They own equities and other assets that rise exponentially with inflation.
Like I said, deflation will have it's day without a doubt.
Hyperinflation might appear to help the debt serfs, but consider this - with the large unemployment, many are not able to leverage it because they have no income.
The wealthy carry debt that makes the debt we hold look like bread crumbs. They also carry it thru corporations, not personal, so they reap the benefits but if things go sideways (which they will) the corporation suffers, they will cry for bailouts to keep from having to reduce their workforce, and if history is instructor, they will get those bailouts - repeatedly. In the meantime, government will give the struggling relative table scraps to appear to be doing something to help the struggling masses.
All of the above of course is just my opinion, I am not qualified to give financial advice (for instance I never would have guessed the earnings reports for Apple, Facebook, etc. today, I expected the markets to get CRUSHED tomorrow, instead we get magically levitating earnings, I WONDER how that happened?)

mahalanobis
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Posts: 2425

Re: Inflation vs. Deflation debate

Post by mahalanobis »

harakim wrote: July 30th, 2020, 10:06 am Deflation would be great for people with money and terrible for people with debt. If there really is an evil cabal, they want deflation. And with how much debt is out there, just not issuing money would lead to rapid deflation. So if inflation happens, I'll take that as a sign that there is not an evil cabal with control, or else they are going to make the inflation beneficial only if people take the mark of the beast or something else which will give them even MORE power.
If you are an evil cabal with lots of wealth - and you're trying to increase your wealth while also increasing your control:

You can run up a huge amount of inflation and simply leverage it in your advantage. My point is that if you're in control, you can put your wealth where it will be best protected for whatever economic event you have planned. So it wouldn't matter if it was inflation or deflation.

So if the goal was to weaken the US, burden it with debt, then inflate the heck out of the currency... All while protecting your wealth because you know what's coming.

These are hypotheticals of course, I don't have proof.

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