The new great depression

[ajl]

It is prevailing wisdom that the next
great depression will be an inflationary
one just like in Germany between the
wars ie the Weimer republic. This will
be caused by central banks around the
world printing so much new money that an
egg will be worth $10 Billion etc. Is
there any chance that this scenario will
not happen and instead the depression
ends up being a deflationary one instead
like the dirty 30's? Preparation for
either of these is different. Cash is
useful in deflation but not in an
inflationary depression.

[sumdumguy]

Two extremes. But I suspect neither will happen.
Why you say. Because the extra printed money is
going directly to energy producing countries
therefore disposable income is not increasing. In
order to have inflation M1 must increase and the
increased money supply must filter down to the
masses. As for deflation, or stagflation money
supply overall must decrease and the
governments will use endless monetary policy so
that wpn't happen, so fear not, amass wealth and
enjoy the ride.

[macdon02]

Maybe you read this article? Blew my mind what kind of trouble you can get into by creating money out of thin air and it didnt take long either once the ball started rollin

http://www.zerohedge.com/print/457096

[ajl]

Thanks for the link. I wasn't aware that
it was even that bad in Germany. That is
our future as well as I believe we are
too far gone to avoid it at this point.
I was wondering if there is anything that
could happen that would make the type of
depression into a deflationary one as a
surprise.

[sumdumguy]

The reason that I tend to expect deflation is
because of austerity card, makes for less
disposible income. For inflation, you need rising
prices and wages chasing it. The majority of the
people have no savings. They live paycheck to
paycheck. They are vulnerable. If wages fall, the
sell-off of assets is their only hope.

Granted these oil prices will fincrease costs such
as energy and food in the short term. They can
only continue up to a point where there is no one
who can pay the price. Governments will
intervene just like they did in the depression.
Keynesian Fix.

But then my guess is as good as yours. I would
like to hear how the inflationists can justify the
cost-wage spiral needed to fuel inflation.

[cottonpicken]

Put me on the inflation side of the fence.

What is happening is a currency event.

The us dollar has lost over 97% of its purchasing
power because of debt expansion,and that debt
expansion is growing exponentially.

It will take more time for what is already happening to
become more self evident to most.

For deflation to occur free market capitalistic
principles would have to be implemented all of which
left the building many years ago.

[cottonpicken]

What happens in japan will be interesting they are further down the same path we are on.

http://www.zerohedge.com/news/2012-10-16/guest-post-future-america-japan-stagnation


I would be very terrified if all my net worth was tied up in yen or jap bonds.

[cottonpicken]

Mcginty up and quit,must have figured out being in
politics in ontario won't be very fun very soon.