think of inflation as your friend

[The Outback Oracle]

Re: think of inflation as your friend

Grrrrr don't reply. I've been through all this before.......I'm just having a rant now. I've sort of given up i guess. The big problem is that everyone thinks that to steal from others, just because it now suits us, is OK.
My disillusion is almost complete.

[whatnow]

Re: think of inflation as your friend

The answer to beating a potential inflation is to go out and buy tangible goods that have a utility value beyond just how many digits it takes to purchase. If you honestly believe that inflation is in the cards, you should be purchasing everything you can with your dollars; art, cars, musical instruments etc. Alas, the biggest problem is if you have fixed expenses and decreasing incomes and would like to keep your savings as well. Something about cakes come to mind.....

Monetary values are always reduced to the simple concept of ratios. If your dollars are going to be destroyed wouldn't it be prudent to convert them into something not so easily mangled? Besides money has never created wealth, just the opposite is true: wealth creates money.

[audrey_girl]

Re: think of inflation as your friend

Grrrrr don't reply. I've been through all this before.......I'm just having a rant now. I've sort of given up i guess. The big problem is that everyone thinks that to steal from others, just because it now suits us, is OK.
My disillusion is almost complete.

I posted this link b/c, like the Oracle I think inflation is somewhat akin to heroin. You start with a little and it feels great (so I hear ), but its never enough - you keep on coming back for more and more.

As an aside - do you think the writer here was clever enough to get this idea for the article himself, or do you think it was a plant/trial ballon for what the govt is thinking of trying very soon when it becomes obvious that nothing else is working?

[Southernguy]

Re: think of inflation as your friend

I don´t think inflation is "good" or "bad". I think it´s inevitable. The alternatives, letting most of companies, banks, etc go down is politically unfeasible.
By the way, I´m just adhering to itulip´s investment thesis, sooner or later inflation shall be on the way, so, better be ready for it.

[vinoveri]

Re: think of inflation as your friend

The other losers are our children. Inflation is NOT a magic bullet. It creates NO wealth to pay off any damned debt. it just books the losses to someone else...including our children. They will have interest rates that will be just plainly soul and society destroying. We are postponing the pain so we don't have to bear it but our children will in some magnified form. Why the hell does everyone think inflation is some magic that is going to solve all our damned problems?
I don't get it.

Amen Brother. This is tantamount to stealing from widows and orphans.

I have to believe our political leaders simply can't see the bigger picture and the need to extricate our culture from this nightmare with a return to hard money and sound banking. The average day of a gov rep in DC I suspect is full of meetings with "well meaning" orgnizations (read lobbyists) who only wish to present the "facts" to the politicians to help them make the "best" decisions in the interest of their consituents. Bombarded with this, why should we be surprised? Widows and orphans against Wall Street (or even UAW) for that matter, no contest!

[jayers4647]

Re: think of inflation as your friend

It has been done before , it could be done ahead.
Could that announcement be the POOM event.
I would guess that if you were "short" any assets you would take a big hit. Memo to self. Clear shorts prior to weekends, specially planned 2 day Fed meetings and G20 meetings.

[brendan]

Re: think of inflation as your friend

Amen Brother. This is tantamount to stealing from widows and orphans.

Orphans? I think you have a strange understanding of orhpans.

Devaluing the currency, as proposed in the article linked on the first post, would actually help orphans by reducing the national debt burden.

Figuring out who inflation would help or hurt is very simple--debtors would be helped as their debts drop in value, and creditors would be harmed for the same reason. Getting some inflation going would actually help bring the economy out of its sudden stop by encouraging economic activity. See http://www.slate.com/id/2202165/

The huge problem right now in the economy is the out of control debt levels. One way to reduce the debt levels is to inflate them away. I won't be too worried if a few wealthy creditors get harmed in the process.

From the government's perspective, it's a great move to issue low interest long-term debt now then inflate and pay the debt back with less-valuable dollars. Sell high, buy low.

[blazespinnaker]

Re: think of inflation as your friend

Inflation is just another word for "Dumb money goes to Zero."

If you want to have wealth, you must be constantly investing in the future intelligently. Putting it at risk.

You should not be allowed to have money if all your going to to is let it sit in a bank account / bonds.

That is not responsible, and is outlawed via inflation.

This is one of the big problems with a Gold Standard. Is that your wealth becomes automatically protected, and you don't have to put it at risk.

With a fiat currency, you have to be constantly at work. No sitting on a pile of gold coins.

[The Outback Oracle]

Re: think of inflation as your friend

Southern..yes I guess that it is what we are trying to do in itulip. But let noone be under any illusion, it will be no solution. As to companies failing, have you tried to run a company in a highly inflationary environment. You pay 40% tax on NIL profits for a start. What I mean is, it looks like you are making say, $1M profit, whereas in actual fact you have made nothing or a loss.
The interest rates, combined with the taxes will kill just as many companies and individuals as stopping this whole wreck now. The big problem will be that our economies and our society will be much more of a disaster then than they are now.

Audrey, i can't say what Governements mighjt or might not do. Nothing would surprise me any more. I think we all agree on that. However this bloke is by no means alone in his thinking. The whole basis of the "cures" for the current troubles is to try to get inflation going again. So, no, I don't think it had anything to do with the Government. it's just a commonly held perception, even within itulip, that it is the only path open to us. Hudson, Steve Keen et al think that inflation is the solution to the problem. It is not a path to salvation. It is a path to worse hell.
Note i respect EJ, Keen, and Hudson, for their abilities to see there was a problem and to forecast the present wreckage. I can't speak as to exactly what EJ thinks but, for me, Keen and Hudson, are way off in their ideas for solutions. I have ranted enough elsewhere!

I don't care much whether you are talkling 3,4,or 55% inflation, it is a process that has brought us to where we are today. We have rewarded debt and penalised savers for so long. So EVERYONE thought a mountain of debt was OK. It ALWAYS paid to be in debt. The extreme levels and leverage of late was just the head on the underlying boil.
Now what is proposed is an even more massive dose of it. As to reducing debt levels, you make interest rates massively negative, and you expect everyone is going to save at the same time?
Once this starts it will not be able to be stopped. In this i disagree with Itulip. Inflation will explode AND the debt will explode at the same time. There are no dollars now to pay the debt back and there will be none then. Everything will explode including our civilsation. Interest rates sufficiently high to fix the problem will be too high to be introduced then, the same as they are now. Neither the government nor anyone else will have any respect for private property. You can see within these pages that it is already so. The idea that we steal everything from anyone who has saved is regarded as basically OK. The savers are commonlky referred to as "usurers' within itulip. I think this process of mixing in a bit of religious zeal is downright dangerous. "Usurers" are referrred to in most religious books as 'evil' so whatever we do to them is acceptable.

In addition, while Aus, US UK etc are "inflating away our problems" you are expecting everyhing else in the world to stay the same and that China et al will keep on lending you money! Yeah right! This is all really going to work!

Everyone should look closely at Zimbabwe for insights. I'm not saying it will be exactly the same but my bet would be that, in the face of this inflation, our society will look more like Zimbabwe than it will resemble what we live in today.


Itulip's thesis is we have to position ourselves against the fact that high (not hyper) inflation is coming. That's true we should. I don't think it is true that we are going to be able to tune everything to some "accdeptable" level of inflation.
However, I do not think we should mildly acquiesce to the process, and the hell that it is going to bring with it. If anyone thinks that, by buying a few Ozs of Gold, that you will grow rich and that you will be somehow insulted from the coming evil, then you had better think again. That's why i think it is important to fight this thing. The Inflation that is coming towards us, is not the light at the end of the tunnel, it is the end of everything.

[vinoveri]

Re: think of inflation as your friend

Devaluing the currency, as proposed in the article linked on the first post, would actually help orphans by reducing the national debt burden.

Figuring out who inflation would help or hurt is very simple--debtors would be helped as their debts drop in value, and creditors would be harmed for the same reason. Getting some inflation going would actually help bring the economy out of its sudden stop by encouraging economic activity. See http://www.slate.com/id/2202165/

From the government's perspective, it's a great move to issue low interest long-term debt now then inflate and pay the debt back with less-valuable dollars. Sell high, buy low.

I'm afraid you've drunk the Keynesian kool-aid my friend. You're right of course that inflation is the way we will go, but don't kid yourself that debauching the currency is helpful in the long run, to anyone save those entitled to legally counterfeit (the feds) and their courtesans (big business, the investor class, and well organized entitlement demanding voting classes). It may be expedient in the short run but it is theft nonetheless.

Maybe all those widows and orphans real estate speculators who are over their head in debt would be helped, and I admit I don't know the demographics of those folks but would assume they are heavily dependent on charity and are a particularly frugal class - just the sort, careful and penny pinching, who get their meager sense of security inflated away.

If "from the government's perspective" you mean "looks good to the government", well bingo. Unfortunately what looks good to central bureaucracies rarely look good to the common liberty seeking and self reliant person.