Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

[metalman]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

hey, ej... you man obama is pushing stocks...



...and two days later was on TV pushing refis.

still loving obama? not me. sorry i voted for him.

[jk]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

still loving obama? not me. sorry i voted for him.

i'm not sorry i voted for him, given the choice, but on his economics- omg:eek:.
i suppose if he'd lost, at least there'd be some laughs.

on his economics, sometimes i wonder what i'd do if i were president, my goal was inflation but i wasn't allowed to say so.

[ax]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

Me too. At the time, despite the fact that I voted against all of the incumbents who voted for the bailout, for some reason I couldn't force myself to not vote for the President. Arguments against a "wasted" vote I guess, but I'd retract my vote in protest now.

[metalman]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

Me too. At the time, despite the fact that I voted against all of the incumbents who voted for the bailout, for some reason I couldn't force myself to not vote for the President. Arguments against a "wasted" vote I guess, but I'd retract my vote in protest now.

was afraid mccain was another nixon... everyone said he could not win.

[WildspitzE]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

This is logical; consumer-based economic growth became more credit-based that savings-based during the FIRE Economy era. Economic expansion followed consumption that followed increases in consumer credit and reductions in savings. The process worked in ratchet-like fashion, and each period of FIRE Economy growth saw debt grow from one dollar of public and private sector debt per dollar of GDP growth to two to three, all the way to nearly five before the system broke down and the debt deflation process began in 2008.

So spot on EJ, thank you (both for I and II)-- especially your comments about PCE (and sales), and PCE's (and it's influence on GDP) increasing relevance as a predictor as savings erodes. And, as you infer later on, the key observation behind PCE and consumption is: what's the source of PCE and sales? Is it income, debt, or savings?

Your comments on savings are extremely important. I keep an eye out for it too because it is helpful to try to understand the choices individuals will make (or be forced to make) in the future -- and what the implications are for the economy. FWIW, some of the charts I look at are:

LT erosion in savings, LT debt loading:




Savings can be telling in terms of what people are doing and think about the economy. Check out how little savings have increased during this recession -- in spite of the magnitude.




Or is it that because of rising unemployment, lowered PIs, and (in spite of interest rate changes) they can't pay debt service:




I'm really looking forward to PCE/PI etc releases at the end of April. Oh yeah, and CMDEBT.

[Willette]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

Don't vote: it just encourages them. Voting sustains the illusion that Americans choose policy by their votes, when in reality it is a rigged game and all we choose are personalities, or may be only faces.

[Willette]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

I have long been a convinced inflationist, so much so that I was surprised by the big KA deflation. But now that its happened, I'm reconsidering inflation. The biggest flaw that I see is that in the USA, how are we going to get incomes to inflate along with prices of goods and services??? No sign or that, for sure.

No doubt that the feds can create money without limit - the issue is, how does it get into circulation? So far, they are mainly turning it over to the "too big to fail" operators. How does that create an inflationary feedback loop?

Suppose these TBTF characters have already acquired loads of real wealth during the prior inflationary boom. Their problem now is the money they borrowed to do so, and the worthless inventory of derivatives they got stuck with when the music stopped. If most of the Fed's new money is given to them, and they simply use it to reduce their leverage, pay down debts, and unload their worthless gambling chits, how does this ever produce inflation? Meanwhile the DEflation cycle of lost jobs, falling incomes, decreasing purchases, declining asset prices and diminishing tax revenues continues unabated.

[grapejelly]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

I have long been a convinced inflationist, so much so that I was surprised by the big KA deflation. But now that its happened, I'm reconsidering inflation. The biggest flaw that I see is that in the USA, how are we going to get incomes to inflate along with prices of goods and services??? No sign or that, for sure.

No doubt that the feds can create money without limit - the issue is, how does it get into circulation? So far, they are mainly turning it over to the "too big to fail" operators. How does that create an inflationary feedback loop?

Suppose these TBTF characters have already acquired loads of real wealth during the prior inflationary boom. Their problem now is the money they borrowed to do so, and the worthless inventory of derivatives they got stuck with when the music stopped. If most of the Fed's new money is given to them, and they simply use it to reduce their leverage, pay down debts, and unload their worthless gambling chits, how does this ever produce inflation? Meanwhile the DEflation cycle of lost jobs, falling incomes, decreasing purchases, declining asset prices and diminishing tax revenues continues unabated.

Tax rebates.

Public works projects

Government buys houses.

Government buys stocks.

Government buys bonds.

Government buys ag products

etc. etc. etc.

[Willette]

Re: Re-inflation Rally Part I: Falsehoods, fantasies, fabrications, and fake-outs - Eric Janszen

Well, we are several trillion dollars into the money spinning, and still waiting to see any of the above. What insures that they will ever distribute any of that money into the hands of normal American families? So far it has gone ONLY to the favored few, who then offer to lend it back to us. Meantime, the G20 are beginning to talk about removing our money spinning powers and turning them over to the NWO.