Collarspace Discussion Forums


Home  Login  Search 

Amity Shlaes: Watch Inflation Capsize US


View related threads: (in this forum | in all forums)

Logged in as: Guest
 
All Forums >> [Community Discussions] >> Dungeon of Political and Religious Discussion >> Amity Shlaes: Watch Inflation Capsize US Page: [1] 2 3   next >   >>
Login
Message << Older Topic   Newer Topic >>
Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 4:48:12 PM   
provfivetine


Posts: 410
Joined: 2/17/2011
Status: offline 		How fast can inflation hit? Real fast.

quote:

“Sudden” is more like it. The thing about inflation is that it comes out of nowhere and hits you. Monetary policy is like sailing. You’re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn’t know it.
Link

Of course since she is routinely attacked by Paul Krugman, we know she speaks truth.
Profile   Post #: 1
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 4:50:56 PM   
Owner59


Posts: 17033
Joined: 3/14/2006
From: Dirty Jersey
Status: offline 		Right right right ....the hyper infaltion doom and gloomers............


And one of you`re 1st posts was about how safe nuke plants are.....errrr were......


She couldn`t shine Krugmans shoes........

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to provfivetine)
Profile   Post #: 2
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 7:11:04 PM   
Edwynn


Posts: 4105
Joined: 10/26/2008
Status: offline
Who cares what Krugman says (besides you), Shales is a nut case from the word go. In every example she gave she got the names right then the rest was 100% fiction. Her version of the Weimar hyperinflation was hilarious. What a dunce.



(in reply to provfivetine)
Profile   Post #: 3
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 7:35:04 PM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline 		Additionally, with interest rates near zero, the Fed has uber-tools to use should this magic sudden inflation hit, tools they can use suddenly.

(in reply to Edwynn)
Profile   Post #: 4
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 7:57:47 PM   
provfivetine


Posts: 410
Joined: 2/17/2011
Status: offline
quote:

ORIGINAL: Musicmystery
Additionally, with interest rates near zero, the Fed has uber-tools to use should this magic sudden inflation hit, tools they can use suddenly.


This is true, but raising rates would send the economy back into recession. Our economy is worse today than it was in the 80's when Volcker raised the federal funds rates to over 20%. A move that sharp would decimate the economy (in the short term). Plus Ben already pledged to keep these rates low until 2014.

Hyperinflation is unlikely unless there's an international run on the dollar or Congress takes autonomous control of the FED, but evidence of mass inflation is already developing.

(in reply to Musicmystery)
Profile   Post #: 5
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:06:58 PM   
Yachtie


Posts: 3593
Joined: 1/18/2012
Status: offline
quote:

ORIGINAL: provfivetine

quote:

ORIGINAL: Musicmystery
Additionally, with interest rates near zero, the Fed has uber-tools to use should this magic sudden inflation hit, tools they can use suddenly.


This is true, but raising rates would send the economy back into recession. Our economy is worse today than it was in the 80's when Volcker raised the federal funds rates to over 20%. A move that sharp would decimate the economy (in the short term). Plus Ben already pledged to keep these rates low until 2014.

Hyperinflation is unlikely unless there's an international run on the dollar or Congress takes autonomous control of the FED, but evidence of mass inflation is already developing.


There may even be another way.

And therein lies the rub. As a reference, America currently has about $1 trillion of currency in circulation. If, and this is a big if, the gullible US consumer-cum-New Normal investor, does fall for the oldest herding trick in the book, and not only converts their bond holdings but their cash holdings into stocks, which in turn goes right into money velocity, into currency, and thus, into inflation, America may promptly find itself with the most unprecedented inflationary outcome it has ever experienced. Because while the Fed may have control over Excess Reserves, or so it believes, via the interest charged on overnight reserves, it will have absolutely no control over the herd mentality and the avalanche of money, should it proceed to rotate not so much out of bonds into stocks, but far more importantly, out of electronic cash (which for all intents and purposes is the US M2 these days), into the stock market.

Crude at $200 will then be the least of everyone's concerns.

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to provfivetine)
Profile   Post #: 6
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:23:21 PM   
provfivetine


Posts: 410
Joined: 2/17/2011
Status: offline
quote:

ORIGINAL: Yachtie

There may even be another way.



This is interesting, but if Americans happened to become weary of bonds at a massive level, then its unlikely that they'd flock to other paper assets (in the form of stocks), especially in the volume that is described in the article. If Americans do indeed become weary of bonds at this level, then a far more likely scenario is that they put this money into hard assets (metals, real estate, etc).

(in reply to Yachtie)
Profile   Post #: 7
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:34:06 PM   
Edwynn


Posts: 4105
Joined: 10/26/2008
Status: offline
Yes, that quantitative easing can be reversed a lot more quickly than it was implemented if need be.

Some do not understand the difference between a rise in price level and an actual meaningful increase in inflation. A cost-adjusted reasonable rise in price level would be a welcome thing right now. If producers have an inkling that would sustain, re-hiring and new hires come not long after. For the last few years prices have only risen by force, primarily from oil and its embedded cost. If instead some discernible bit of demand-pull inflation were to appear that would be indication that several good things are happening as far as recovery.

If we get to that point, then the increase in supply should hold inflation to normal levels.

Of course every little bounce and skip along the way will be a sign of today and forever disaster, just after all that euphoria we had from yesterdays news.



(in reply to Musicmystery)
Profile   Post #: 8
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:41:56 PM   
dcnovice


Posts: 37282
Joined: 8/2/2006
Status: offline 		<fr>

http://www.collarchat.com/m_4062613/tm.htm

_____________________________

No matter how cynical you become,
it's never enough to keep up.

JANE WAGNER, THE SEARCH FOR SIGNS OF
INTELLIGENT LIFE IN THE UNIVERSE

(in reply to Edwynn)
Profile   Post #: 9
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:44:34 PM   
provfivetine


Posts: 410
Joined: 2/17/2011
Status: offline
quote:

ORIGINAL: Edwynn
Yes, that quantitative easing can be reversed a lot more quickly than it was implemented if need be.


Sure, in theory. But Ben is not going to raise rates because he knows it will put the economy back in recession. He's also not going to raise rates in an election year.

quote:


Some do not understand the difference between a rise in price level and an actual meaningful increase in inflation.


The CPI is just a fraudulent measure of real inflation; it doesn't even include food or energy in it. The government and their economic henchman just look for rises in the core; if this doesn't rise, then there's "no inflation."

(in reply to Edwynn)
Profile   Post #: 10
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:46:48 PM   
Edwynn


Posts: 4105
Joined: 10/26/2008
Status: offline
Thanks, I missed that. I thought it would be about medicare or something so I never clinked on it.



(in reply to dcnovice)
Profile   Post #: 11
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 8:52:32 PM   
provfivetine


Posts: 410
Joined: 2/17/2011
Status: offline
quote:

ORIGINAL: dcnovice

<fr>

http://www.collarchat.com/m_4062613/tm.htm


Thought that thread would be about this: http://www.youtube.com/watch?v=tTJwQ63A_r0

(in reply to dcnovice)
Profile   Post #: 12
RE: Amity Shlaes: Watch Inflation Capsize US - 3/18/2012 10:34:15 PM   
TheHeretic


Posts: 19100
Joined: 3/25/2007
From: California, USA
Status: offline
quote:

ORIGINAL: provfivetine


quote:

ORIGINAL: dcnovice

<fr>

http://www.collarchat.com/m_4062613/tm.htm


Thought that thread would be about this: http://www.youtube.com/watch?v=tTJwQ63A_r0



Books and covers, but carry on.

If I find a way to do the MediCare thread I'd like to do, it would probably have a playful title as well.

(in reply to provfivetine)
Profile   Post #: 13
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:04:11 AM   
xssve


Posts: 3589
Joined: 10/10/2009
Status: offline
quote:

ORIGINAL: provfivetine

quote:

ORIGINAL: Yachtie

There may even be another way.



This is interesting, but if Americans happened to become weary of bonds at a massive level, then its unlikely that they'd flock to other paper assets (in the form of stocks), especially in the volume that is described in the article. If Americans do indeed become weary of bonds at this level, then a far more likely scenario is that they put this money into hard assets (metals, real estate, etc).

Uh, this is most of the problem anyway, so much of M! represents debt, which isn't real money, or rather it represents theoretical rather than actual value, it's value that hasn't been created yet, but it's counted like it was real, and traded in liquid instruments like it was real.

They did write down a bit of it during the bailout, but it accounts for at least half of the global money supply.

There doesn't seem to be a glut of banknotes, in fact it was kind of tight there for a while, but loosened up a bit during the last round of stimulus.

Inflationary forces in the CPI at the moment have pretty much everything to do with fuel prices.

_____________________________

Walking nightmare...

(in reply to provfivetine)
Profile   Post #: 14
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:11:33 AM   
xssve


Posts: 3589
Joined: 10/10/2009
Status: offline 		In fact so much paper wealth was being written down Two or Three years ago, the Fed was more worried about deflation than inflation.

_____________________________

Walking nightmare...

(in reply to xssve)
Profile   Post #: 15
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:13:44 AM   
Yachtie


Posts: 3593
Joined: 1/18/2012
Status: offline
quote:

ORIGINAL: xssve


quote:

ORIGINAL: provfivetine

quote:

ORIGINAL: Yachtie

There may even be another way.



This is interesting, but if Americans happened to become weary of bonds at a massive level, then its unlikely that they'd flock to other paper assets (in the form of stocks), especially in the volume that is described in the article. If Americans do indeed become weary of bonds at this level, then a far more likely scenario is that they put this money into hard assets (metals, real estate, etc).

Uh, this is most of the problem anyway, so much of M! represents debt, which isn't real money, or rather it represents theoretical rather than actual value, it's value that hasn't been created yet, but it's counted like it was real, and traded in liquid instruments like it was real.



Real enough that the lender expects to be repaid and the borrower is on the hook for it; like student loans. The fact that it isn't necessarily cash is where many go wrong. [The money multiplier is as relevant to digital money as cash. If it weren't your cash would not be devaluing.]


_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to xssve)
Profile   Post #: 16
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:21:10 AM   
Musicmystery


Posts: 30259
Joined: 3/14/2005
Status: offline
quote:

isn't real money


I think you're confusing money with physical assets.

No money is "real" except by commonly accepting it as a medium of exchange, store of value, and unit of account--whether coffee beans, sea shells, pounds of salt, gold, silver, coins or paper currency.

(in reply to xssve)
Profile   Post #: 17
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:27:00 AM   
xssve


Posts: 3589
Joined: 10/10/2009
Status: offline 		Re: Krugmans editorial, and republican policy in general, the multiplier value of of interest as wealth is based on willingness to pay and ability to pay - and includes appreciation in any assets used to secure the loan in a default, which is why so much paper wealth simply evaporated on contact with reality back in '07.

Lowering wages would tend to have a negative effect in all this, I should think, and any way you look at it, ongoing Keynesian stimulus is the only way out here, even with a little inflation.

The political problem with that, is that it means banks take the hit if CPI is compensated with rising wages, so I think the Fed's gonna keep playing with the line here, I don't see any bold strokes in the offing, Bernanke's gonna keep trying to finesse it.

A massive infrastructure investment is what is called for, for more reasons than one, but George W's massive debt increases make's that problematic, given that the bills on that are still coming in every year like clockwork, on top of rising mandatory expenditures - doesn't give Obama much wiggle room, and limits how much money Bernanke can print.

_____________________________

Walking nightmare...

(in reply to xssve)
Profile   Post #: 18
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 9:35:41 AM   
xssve


Posts: 3589
Joined: 10/10/2009
Status: offline 		Yes, "real money", as in money that represents actual assets, and goods and services being exchanged, as opposed to money that represents assets, goods and services that are presumed to be created and exchanged at some future date.

Some of that is obviously necessary, fiat currency itself is basically an IOU, and new wealth creation has to be financed somehow, if it isn't going to get zero sum, i.e., credit is a necessary tool for economic expansion - but it ain't magic, and in any credit scheme, the subsequent production of real performing assets is the difference between economics and magical thinking.

In this case, just like in the 80's S&L debacle, credit was extended to make a buttload of heavily inflated, nonperforming assets i.e., it looked like real money, but it turned out not to be. It seems to happen in every republican administration anymore, they really love those real estate bubbles.

_____________________________

Walking nightmare...

(in reply to Musicmystery)
Profile   Post #: 19
RE: Amity Shlaes: Watch Inflation Capsize US - 3/19/2012 10:00:07 AM   
xssve


Posts: 3589
Joined: 10/10/2009
Status: offline 		The real problem with this economy is the income gap - builders and start up's are universally aiming at the high end of the market - that creates the bubble, which pops when that market becomes saturated - happened with commercial real estate in the Eighties - giant malls that were turned into indoor flea markets and professional plaza's turned into thrift stores and fly by night electronics wholesalers.

Happened with the tech bubble, now with domestic housing - the upper quintile buying houses and selling them to each other - some of these people bought Three or Four houses and have never even seen them - when that market was saturated, then oversaturated, brokers started unloading them on high risk borrowers that really couldn't afford them, and the investment banks didn't perform due diligence on the brokers till they were already in the shit.

It's a classic scenario, and you either have to find a way to incentivize building affordable housing or accept massive deflation in the current market - which is pretty much what happened already due to Bush's lousy job creation - most of the jobs he did create evaporated with the housing market, and household incomes are falling off all across the lower deciles.

Which bodes not well for the housing market in the long term, which I think bottomed and started to recover around November last year - I just don't think anybody is paying attention to why all this happened, and chance are good they're gonna turn right around and do it again, like flies banging against a window pane.

_____________________________

Walking nightmare...

(in reply to xssve)
Profile   Post #: 20
Page:   [1] 2 3   next >   >>
All Forums >> [Community Discussions] >> Dungeon of Political and Religious Discussion >> Amity Shlaes: Watch Inflation Capsize US Page: [1] 2 3   next >   >>
Jump to:





New Messages No New Messages
Hot Topic w/ New Messages Hot Topic w/o New Messages
Locked w/ New Messages Locked w/o New Messages
 Post New Thread
 Reply to Message
 Post New Poll
 Submit Vote
 Delete My Own Post
 Delete My Own Thread
 Rate Posts




Collarchat.com © 2025
Terms of Service Privacy Policy Spam Policy

0.125