The Inflation Time Bomb!

[Fransisco]

As far as the language goes I can take it or leave it. My preference is to keep things cleaner and more respectful. I have a thick skin and can give as good as I get if the circumstances call for it but have found the conversation is usually more productive if the F Sharp's are kept to a minimum.

Back to the original post, notice the blip around the year 2000? It was pointed out on another site,

"That represents the Y2K monetary expansion, judged huge at the time. There are plenty of people who would argue that the Fed's efforts to shrink the money supply afterwards—that is, Greenspan's mopping up operation—burst the high-tech bubble, causing the last downturn. How will the Fed mop up after this expansion?"

The ride up should be fun, but the ride down the other side is what really concerns me.

And the question of when will this all kick in is what is front and centre in my mind right now.

We have a monster canola crop, and we (farmers) have been pretty disciplined about selling it so far which is why the prices are still pretty decent. But at some point guys are going to start really emptying the bins. The fundamentals aren't looking great. But outside influences such as this monetary expansion could throw all the fundamentals out the window and we're off to the races.

[cottonpicken]

Apology Accepted.

[Fransisco]

As far as I can see it's just like in your bedroom, you didn't get any.

[Fransisco]

The time bomb will blow alot sooner than most think.

I GURANTEE by the 3rd and 4th quarters of THIS year those fools on CNBC will be looking like the chumps they real are!! I love the way they say the "smart money" is sitting on the sidelines. Correction the "smart money" would be investing right now at bargain prices.

Is the worst over??? Nope not for a few months.

If anyone cares I'm sold as of last week, 100% on Canola for this crop year.

[cottonpicken]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEDdmGcO6iqE&refer=home


Read the last sentence carefully.

[Fransisco]

Good grief Charlie Brown!

"The Treasury and Fed have proposed up to $8.5 trillion of initiatives through November to prop up financial markets."

and here's a knee slapper,

“People are still <b>somewhat</b> concerned about the idea of inflation farther out when you have as much stimulus in the pipeline as you do now,”

SOMEWHAT CONCERNED!?

And who the heck is going to buy all this debt for a lousy 2-3% return? Okay, it's indexed for inflation but it still that aint much of a return.

[Fransisco]

Good read. I could actually see happening a early as late spring.

[cottonpicken]

Bernake has already said the debt will be monetized.They will print money to buy debt in the bond market.The only thing holing rates low now.

There is no solution to the problem.

There is no solution to the problem.

The usdx has to collapse and debt will be paid out by the printing press.

If they dont do this we collapse.

So whats our problem?

Do you know what einstein said was the most powerful force in the universe?

Compound interest.

The growth is geometrical not arithmetical.

We need ever increasing amounts at a faster pace.

Eventually we collapse,but it is put off for a while.

Hopefully i'm proved wrong.

[gregpet]

Found this chart interesting:

If you'd like to know just how much Ben Bernanke has expanded the money supply during the last few months, just take a look at this chart on the website of the St. Louis Fed. I'm not at all certain that there are any adjectives that do the event justice, but "astounding," "flabbergasting," and "utterly astonishing" come close.
Note, incidentally, the tiny little wiggle at the year 2000. That represents the Y2K monetary expansion, judged huge at the time. There are plenty of people who would argue that the Fed's efforts to shrink the money supply afterwards—that is, Greenspan's mopping up operation—burst the high-tech bubble, causing the last downturn. How will the Fed mop up after this expansion?

Take a look at the chart here:

http://research.stlouisfed.org/fred2/series/AMBNS?cid=124

Unbelievable

[vagabonddreamer]

apparently a direct inverse relationship to my bank account...sigh...vs

[cottonpicken]

Should also say that from what i'm reading cibc bank is the bank with the greatest risk of going bankrupt in canada.

[liberty]

Inflation is the inevitable outcome of all this monetary and fiscal stimulus. I hope I'm wrong, but the results could make the inflation of the late 70's look tame by comparison.

The Fed's basic approach to this crisis was to take bad debts off the books of the troubled banks and replace them with T-Bills. The official line is that when inflation becomes an issue, the Fed will reverse this process and "sterilize" the monetary injections. But since this will involve handing these same worthless loan portfolios back to the banks, this would simply cripple their balance sheets all over again and cause the financial industry to re-crash. For this reason, I think the Fed is just blowing hot air when it talks like this.

The bad debts that caused this collapse should be allowed to liquidate and take the economy into a curative recession. Every talking head on CNBC seems to believe that stimulus packages will avoid high unemployment, but the truth is that they are just going to stretch out the period of high unemployment, delay the bad debt liquidation process, and as a result, an economic recovery.

The sad news is that almost everyone in a position of power has got their head buried deep in the sand on the inflation issue. All I can gather is that they are hoping that by not thinking about and dealing with this issue it will somehow not occur.