Maybe Im starting to seriously think owning phisical gold is the way to go!

[ado089]

Private and corporate debt is being paid
down quite aggressively and borrowing
has come to a screeching halt. The
velocity of money is still painfully
slow. Since government debt is so
incestuous and no one government isn't
in significantly better shape I believe
alot of it will simply be written off.

If I'm wrong I own land and sell
commodities so I'm set up pretty good to
weather inflation.

[jensend]

Seems to me that the kind of inflation
you talk about is generally short and
sharp and then things collapse. We've
already had inflation in the housing,
equity, commodity and land markets. The
economy shows no meaningful growth.
Wages are dropping in real terms so I
don't know how much more inflation there
can be before demand collapses. My
guess is that we're close to the tipping
point. As the guy from Florida said on
the CBC piece it's all bubbles with no
value to justify prices and likely no
good end.

[errolanderson]

jensend . . . your comments are right on
the money

[Kodiak]

I understand the deflation scenario. Except for one question I can't foreseen and outcome to. And that is the world's central bankers will fight it with evryting they've got. They are muc more worried about deflation than inflation-as evidenced by their actions. I think they have a lot more arrows in their quivers. I agree that at the moment the QE is all going to Wall Street and back to the Fed at a premium. Bankers are making a killing. If the Fed decides they want QE to go to Main Street instead, they have the ability to make that happen to. I sense they are watching that now (Bernanke hinted at this during his last testimony befor congress). As th old saying goes, "don't fight the Fed." In the end they have more bullets than anyone and if they want inflation, they can create it. We are not in a normal market nor have we been in these waters before. Everything is being manipulated- money supply, equity markets, interest rates - and will continue to be IMHO. With markets being manipulated, how can normal adjustments occur? Central banks have a tiger by the tail. They can't let go.
I believe the results of this kind of action will debase the currency.

[jensend]

they have been fighting the deflation with everything they've got. the problem is that qe has quit working. they have reflated the equity markets and commodities have inflated but people are still too indebted to have the spending capacity to spur growth. to me the economy is balancing right on the edge of the cliff and the central bankers are doing all they can to keep it from rolling the next inch. europe isn't helping with their enforced austerity which, i think, should be more focussed and less severe. high unemployment is not a good thing. in order to avoid deflation there has to be a return to growth but so much of the growth of the past forty years was debt financed that we have run out of the capacity to spur more growth. we've actually had qe for four decades now and it has become a drag on the economy instead of a stimulus. i think in agriculture you have to ask what happens when there is a generally good crop around the world.

[jensend]

http://www.telegraph.co.uk/finance/financialcrisis/10028967/Eurozone-risks-Japan-style-trap-as-deflation-grinds-closer.html

an opinion column on the lack of growth in the eu and mentions that antagonism within the eu isn't helping.

[cottonpicken]

Inflation happens when things are not going so well.

A few bubbles popping doesnt mean deflation.

A soverign debt default,does not equal a rise in
purchasing power.

[Hopperbin]

Not sure inflation and interest rates go hand in hand I thought so. Years ago when the liberals were in power we had high interest rates and inflation cause the economy was supposedly going nuts and needed to be slowed according to them.

[Hopperbin]

According to my thinking inflation happens when things go very well for most.

[Hopperbin]

Might suck for some people borrowing and cannot get out of loan contracts.

[rkaiser]

The problem I see with printing money is that the (temporary) humam condition
of greed is holding the process back from the progression it could actually cause.

Should those who acquire this newly printed money simply use it rather than think " yes, now I can earn interest and sit on my ass", we could move along.

There is already more than enough money on this planet; more than enough gold, more than enough silver, more than enough land, food, water "oil" and on and on. The problem comes with thinking in lack, and driving that thought into the minds of those with less money or no money at all.

I agree with those who say the money being printed in the USA and other parts of the world needs to be used for infrastructure projects, and business propositions rather than simply released into the hands of people who want to keep it under their mattresses, or invest in commodities like land or gold. The stock market, and shit like that has become the scorge of the earth in my mind. Making money from nothing has caused a true work ethic problem in our earthly society.

Too Da Loo