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Forum Post: Inflation hidden behind the battle against deflation

Posted 2 years ago on Nov. 25, 2012, 3:04 p.m. EST by richardkentgates (3269)
This content is user submitted and not an official statement


Deflation

In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels).[2] Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods with the same amount of money over time.


Is the Fed Losing the Fight Against Deflation?

Prior to the financial markets' obsession over the looming fiscal cliff, their single-minded focus was on monetary policy. Now, two months after the Federal Reserve announced its so-called QE3, its third round of quantitative easing, it appears the fuss was much ado about very little.

Ben Bernanke seems to be losing his battle with deflation, observes Walter J. Zimmerman, chief technical analyst for United-ICAP. So far, the Fed's scheme announced in September to buy $40 billion of mortgage-backed securities for however long it takes to lower unemployment has little to show for it. Quite to the contrary, market prices show the U.S. central bank has shown itself impotent in its fight against the undertow of deflation.

Global stocks and commodities are down significantly from their peaks reached in mid-September while the dollar has strengthened, he points out. That is contrary to the record of QE1 in 2009, QE2 in 2010 and so-called Operation Twist (the Fed's purchase of long-term Treasuries and offsetting sales of shorter-dated maturities) beginning in 2011. While the first two iterations of QE boosted stock and commodity prices and lowered the dollar significantly from their outset, the markets have done the opposite under QE3.

Zimmerman writes the Standard & Poor's 500 rose some 63%, or 5.3% per month, following QE1. After QE2, the S&P 500's cumulative gain was 9.7% or 1.4% per month. Operation Twist produced a 30% gain, or 2.7% per month. In the two months since QE3, the S&P 500 was off 6.9% as of Friday.

True, the equity market has had to fight the tide of slowing corporate earnings and the political uncertainties of the elections and the looming fiscal cliff. But the decline since the implementation of QE3 also shows that money printing can't cure all economic ills.

Not even those at which the policy is aimed most directly. The Fed's purchase of mortgage-backed securities is explicitly designed to bring down home-loan interest rates and thus stimulate the residential-property market. That had always been the magic elixir for the economy in past cycles; Fed easing would lower mortgage yields, which would spur housing as well as refinancing activity that would put more cash into homeowners' pockets. The combination was always a potent cocktail that could be counted upon to get the economy hopping.

In this cycle, the effect of the Fed's shot of whiskey has been dulled by the hangover from the crash after the bubbles of the last decade. Even homebuilder stocks, which have soared on the prospect of a rise in residential construction -- albeit from deeply depressed levels and only to ones that marked the nadirs of previous cycles -- are beginning to roll over.

Monday, D.R. Horton (ticker: DHI) saw its stock fall nearly 6% despite strong quarterly earnings and revenues while Beazer Homes USA (BZH) plunged 17% on a bigger-than-expected quarterly loss even with revenues that exceeded analysts' forecasts. The limits of the Fed's ability to boost housing activity are becoming apparent.

Where the Fed can claim some measure of success is in bringing down corporate-bond yields. International Strategy & Investment points out medium-grade (Baa by Moody's) corporate yields fell to a record low of 4.22%, down 190 basis points (1.9 percentage points) from their peak last year. Similarly, comparable European corporate-bond yields are down a huge 430 basis points from their peak last year, to 3.72% -- a "big win" for the European central bank, ISI adds.

These victories accrue to large corporations that can tap the bond market for hundreds of millions or even billions at a pop. And just as bankers will only lend money to somebody who doesn't need it, the bond market is open to companies with tons of cash already on their balance sheet but want to take advantage of record-low interest rates to refinance old debt or to buy back stock, perhaps even pay out more in dividends. But the cheap financing is not spurring expansion of plant and equipment as capital spending rolls over amid excess capacity in many industries.

Governments are the other great beneficiaries of the bond market's beneficence -- for now. There has been no penalty for the U.S. hurtling toward the fiscal cliff -- and more potential downgrades of its remaining triple-A ratings from Moody's and Fitch after last year's cut by Standard & Poor's -- while the Treasury can borrow at record-low interest rates. The so-called bond vigilantes of yore -- who in the 1980s and 1990s sharply boosted interest rates at the first sign of inflation -- are overcome by the central bank's purchases of the securities that finance the budget deficit. So, Bernanke & Co. are enablers of the dysfunction in D.C.

But, the signs are building that even the Fed is failing in its main aim of QE3, the blunting of deflationary forces. Along with equities, Zimmerman points out that even the DJ-UBS Commodity Index is down 8.4% since the mid-September announcement -- a sharp contrast to the 42% total rise after QE1, the 23% pop after QE2 and the 8.6% gain after Operations Twist.

At the same time, the U.S. Dollar Index has rallied 3.2% since the start of QE3, also the reverse of the 8% drop under QE1, the 5.5% fall under QE2 and the 1.2% dip under Operation Twist. Zimmerman also points to the diminishing returns from each round of Fed easing apparent in these data.

Monetary expansion is a necessary, but not sufficient, ingredient for economic expansion. The classic Keynesian remedy for the so-called liquidity trap -- in which borrowers won't borrow and lenders are loath to lend even at rock-bottom interest rates -- has been for the government to run deficits to offset the surpluses in the private sector.

But, as Carmen Reinhart and Kenneth Rogoff showed in This Time is Different: Eight Centuries of Financial Folly, when government debt reaches about 90% of gross domestic product, it slows rather than boosts growth. A little debt is a stimulant; a lot is a depressant. At which point, central banks' ability to steer the economy diminishes.


Yes, it means exactly what you think. The Fed is and has been knowingly preventing your paycheck from climbing in value and actively maintaining the very economic inequality that Occupy is protesting.


90 Comments

90 Comments


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[-] -1 points by richardkentgates (3269) 2 years ago

Sure, the topic of entitlements effects all of us. And is a relevant economic issue.

[-] 2 points by VQkag2 (16478) 2 years ago

Will it help prevent the economic crash you've been tryin to scare everyone with.?

[-] -1 points by richardkentgates (3269) 2 years ago

So all of the hard data that is reliable and provable is just for scare? I post hard data so you need to discredit that. Shooting the messenger does little to erase the message. You can ignore it but it's still there for everyone else to see, and independently review and assess the reliability of the sources, which are not me. Keep fighting though.

[-] 1 points by VQkag2 (16478) 2 years ago

The economic inequity ain't new. It's been goin on for decades.

What do you propose? Nothing!

So clearly you just wanna scare people.

[-] -1 points by richardkentgates (3269) 2 years ago

I suggest an end to devaluing the dollar. A practice being executed to save the 1% at the cost of the 99%. I'll say it as many times and in as many ways as required.

[-] 1 points by VQkag2 (16478) 2 years ago

How do we do that? What will be the affect?. Did you tell me that would create a short term recession?

[-] -2 points by richardkentgates (3269) 2 years ago

How would allowing the dollar to rise cause a recession? Testing a new spin?

[-] 2 points by VQkag2 (16478) 2 years ago

I'm asking about what you've told me in the past.

So rising dollar is good and will not create a recession? I'm aksin?

[-] -2 points by richardkentgates (3269) 2 years ago

When you get done spinning, I'll still be standing in the same place. Man you guys must be used to working with some really dull people.

[-] 2 points by VQkag2 (16478) 2 years ago

What spin.?

[-] -3 points by richardkentgates (3269) 2 years ago

Covering ground over and over means you aren't interested in the answer, you're trying to change the direction of the conversation. Weak.

[-] 2 points by VQkag2 (16478) 2 years ago

Am not!

[-] -3 points by richardkentgates (3269) 2 years ago

are too

[-] 3 points by VQkag2 (16478) 2 years ago

LOL. That's too funny. Didn't miss a beat. Didja go take a nap or run an errand?

I think we squeezed everything out of that disagreement already.

Good luck to you in all your good efforts.

[-] 2 points by Misaki (893) 2 years ago

Yes, it means exactly what you think. The Fed is and has been knowingly preventing your paycheck from climbing in value and actively maintaining the very economic inequality that Occupy is protesting.

Deflation may help people with jobs who keep getting their salary increases, but it decreases the number of people with jobs. Jobs are the main concern for the US right now, even the President has said that it has more priority over other things (like climate change).

The reason there is not more inflation is because it is unpopular, not because it would hurt the separate goal of job creation. We can create jobs without more government spending or inflation though by working less. http://occupywallst.org/forum/the-problems-in-the-economy-are-not-new-they-are-o/

[-] -1 points by richardkentgates (3269) 2 years ago

Wages fail to keep pace with inflation as a matter of trend, rendering goods unaffordable to lager and larger swaths of people, decreasing demand, and reducing employment. Stop testing your fucking spin on me you mindless prick.

[-] 0 points by richardkentgates (3269) 2 years ago

What do you care about wages. You don't care that those wages are currently being devalued. In fact you try to cover up the fact. The Fed is devaluing the paycheck of the worker and you argue that it isn't happening when it clearly is, spin much. When you can find some real interest in wages, please post a thread.

[-] 2 points by VQkag2 (16478) 2 years ago

So you don't support the living wage?

[-] -1 points by richardkentgates (3269) 2 years ago

What does the wage matter to you if you are ok with the devaluation of that wage. How do you support a living wage but argue in support of actions that devalue that wage. You cannot escape this question or your contradictory position.

[-] 2 points by VQkag2 (16478) 2 years ago

Liar! I have never argued for devaluation. I have only questioned your conspiracy theories. You never prove your theories. And you offer no solutions.

Just fear.

What should we do?

[-] 0 points by richardkentgates (3269) 2 years ago

I didn't say you argue for it. I said you argue to discredit the point. Very different strategies. You're asking the question as if I haven't answered it 100 times already. Asking it 100 more times will not weaken my argument or lead the conversation into some point of weakness that you can then exploit to again discredit the point. You are the one in the corner.

[-] 2 points by VQkag2 (16478) 2 years ago

You have put up meaningless charts that show a 30 year trend. Nothing new. No evidence we will not simply go on as we have. But you offer no solutions.

WHAT IS YOUR PROPOSAL?

[-] 0 points by richardkentgates (3269) 2 years ago

Stop the printing. Mandate markup limits on retail and resale. End the Fed and hand all monetary policy over to congress with the treasury as the mechanism for currency control. Index wages to inflation.

HR 2990 + Markup controls + Wage indexing.

[-] 2 points by VQkag2 (16478) 2 years ago

index wages to inflation sounds good. Congress control monetary policy? If we eliminate all money in politics I guess I could go with that.

Mandate markup limits? Is that price controls.? I suppose we do that in limited ways now but I think that might be the most difficult one to get.

But I could support most of that.

Idon't suppose you support my proposals though huh?

[-] 1 points by Misaki (893) 2 years ago

All of this might create 4 million. the normal growth of the economy is estimated to create 12million. These additional jobs as well as the proposals I listed above WILL increase demand, economic growth and yet more job creation.

Can you support these ideas.?

I think the 12 million is the government's projection... doesn't necessarily mean they'll be created. Remember, in 2008/2009 the government expected we would be below 6% unemployment by now. (link removed because it has expired)

Since even the avenues you listed would leave the problem in place, with the poor and relatively uneducated workers still unable to get jobs, I still see working less as a better solution.

[-] 3 points by VQkag2 (16478) 2 years ago

I think working less is a great idea. I see it as a long term solution. My proposals are short term solutions.

How do we get 'working less' a viable solution. How do we get people to discuss it, consider it seriously, to support it, to fight for it.

What's your plan.? I'm with you.

[-] 1 points by Misaki (893) 2 years ago

People are willing to support the general idea of working less. See for example the ~14k Facebook likes on this article: http://www.salon.com/2012/03/14/bring_back_the_40_hour_work_week/

But the main obstacle to them supporting specific solutions that would have people working less than 40 hours is just the complexity of the economy. If you like you can read comments on this thread: http://occupywallst.org/forum/tell-the-1-how-they-can-help-the-economy/

Or consider why despite over 100 thread views, no one replied, and no one else voted on whether lower unemployment, poverty, inequality, and the number of people in prisons was worth higher prices for gasoline (one person did reply on the OWS version of the thread):
http://www.usmessageboard.com/politics/264795-the-resource-issue-informal-poll.html

So to be honest, it is unlikely any single individual without much influence could get people to discuss working less as the solution to unemployment. Maybe someone with a lot of friends could. I mostly just wanted to reply to anyone who responded to my previous posts here... I might not respond again after this.

[-] 3 points by VQkag2 (16478) 2 years ago

It's a good effort. Don't give up. I believe in the proposals I've made, I do not think our ideas are mutually exclusive.

[-] -2 points by richardkentgates (3269) 2 years ago

I don't support meaningless fluff as it distracts from priority actions.

When there is time to play, I play. When it is time for work, I work.

[-] 3 points by VQkag2 (16478) 2 years ago

Oh. tax/debt cuts for working class is fluff.? living wage? penalize outsourcing? increased taxes on the wealthy? All fluff?

[-] 1 points by Misaki (893) 2 years ago

Why does it have to made up by the wealthy?

Because when you tell people about how Wall Street gets its profits, they keep the information to themselves instead of using it to explain to other people that the government can create jobs without giving everyone's tax money to Wall Street.

The "architect of the Obama economy" had this to say about what we could do to create jobs: http://jaredbernsteinblog.com/what-should-we-do/

It might create a million or two, whether or not we increase taxes to pay for it. But it won't create 5~12 million.

So no matter what, if the government were to fix unemployment through more spending there would be a lot of waste and people having nothing to do while employed by the government.

[-] 3 points by VQkag2 (16478) 2 years ago

I do not support simply creating govt jobs. That is ridiculous.

I support helping states rehire the million state govt workers fired during this unemployment crises.

I support the infrastructure bank jobs programs that should fuel private construction jobs.

I support some expansion of fed govt jobs but not enough to end the unemployment crises. Maybe a million.

I support greentech subs which would expand the private industry jobs.

All of this might create 4 million. the normal growth of the economy is estimated to create 12million. These additional jobs as well as the proposals I listed above WILL increase demand, economic growth and yet more job creation.

Can you support these ideas.?

[-] 1 points by Misaki (893) 2 years ago

I just went over some tax data from the IRS. http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income

From the first table:

The total amount of adjusted gross income less deficit on all returns (140m returns) was $7.6 trillion. Returns of over $100k had almost exactly half of this amount at 49.4%. Only 82m returns were taxable though, including 99.0% of returns over $100k.

Those households over $100k paid 17% of their 'adjusted gross income less deficit' in income taxes and 22% of taxable income (which is somewhat less, about 4/5 of AGI less deficit).

Households under $100k with taxable returns paid 7.2% of 'AGI less deficit' in income taxes and 11.3% of taxable income.

This doesn't include payroll taxes, or state income or sales taxes. Probably some site (maybe Citizens for Tax Justice) already has charts of this... but the point is that the "middle class" is getting a decent share of the total already. Cutting taxes for the middle class probably cannot be made up for by taxing the wealthy.

[-] 3 points by VQkag2 (16478) 2 years ago

Are you offering a reason NOT to cut taxes for the middle class? And is that reason that it "can't be made up" by taxing the wealthy?

Why does it have to made up by the wealthy?

[-] -3 points by richardkentgates (3269) 2 years ago

The taxes are an obvious and settled issue. They have no choice. It's pointless to keep running over resolved issues. You never address how to make it a living wage, you just repeat the phrase over and over but fail to account for the shifting of higher wages to prices(wage inflation), and outsourcing is a lagit issue but you again present nothing but the phrase. You're all fluff.

[-] 3 points by VQkag2 (16478) 2 years ago

I am stating the goals that WILL resolve these economic inequity.

As to how, I thought that was obvious!

Get in the street, pressure ALL pols for this change that will benefit the 99%. Simple.

You ain't suggested how to end the fed, or how to do any of your proposals. I guess that makes you fluffy as well. As such you will henceforth be known as Fluffy the fluffinator

Fluffy

[-] 1 points by Misaki (893) 2 years ago

Inflation is necessary for Wall Street to be profitable. http://occupywallst.org/forum/the-inflation-scam/

If there was deflation, people would be able to save money in banks instead of investing in the stock market and the market would probably crash... reducing employment.

The finance, insurance, real estate section of the economy has already risen to 21%. http://www.ritholtz.com/blog/2011/02/manufacturing-vs-finance-insurance-real-estate/

So yes, inflation does create jobs.

[-] -1 points by richardkentgates (3269) 2 years ago

A stronger dollar means more purchasing power for consumers, means more demand, means more jobs. WallSt is not an essential component for capitalism, it's an option and can be done away with. Insurance could also gain from a stronger dollar by investing in the appropriate markets and realty should not be an investors market to begin with, it is the home of families, not a gambling token.

[-] 2 points by Misaki (893) 2 years ago

"Stronger dollar" is basically separate from inflation; the two are only connected by international markets.

Higher prices for college, housing and even food are mostly completely unrelated to the strength of the dollar compared to other currencies. (For example, rice in the US costs several times what it goes for in bulk international markets.) And we are always complaining about China's yuan being too weak; a weaker dollar is exactly the same as a stronger yuan.

[-] -2 points by richardkentgates (3269) 2 years ago

A stronger dollar means imports become cheaper. Because energy is factored into all costs and energy costs are effected by the index, all costs have some relevance to the index. Secondly, the enormous amount of goods we buy from other countries is certainly effected by the index. It's entertaining to see you continue cherry picking talking points in order to turn fiction into fact. Please, continue.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

"A stronger dollar means imports become cheaper."

Which also means exports are more expensive.

[-] -2 points by richardkentgates (3269) 2 years ago

Bullshit. I'm not going to spend any more time feeding into this nonsense, spending hours knocking down your bullshit that you damn well know is bullshit, you just want to see if I can knock it down. I have spent a year playing that game. Read the threads, argue with the data.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

It's nor BS. Here's a cool site with all kinds of info.

http://www.tutor2u.net/economics/revision-notes/as-macro-exchange-rates.html

[-] -1 points by richardkentgates (3269) 2 years ago

A stronger dollar means cheaper energy, most things we build contain imported components that are made cheaper under a stronger dollar. Under the hood of a Ford or Chevy, is hundreds of components we import. All of those become cheaper under a stronger dollar allowing for a lower production cost, making the product more affordable as an export. There ya go. Like I said, I'm done knocking down your bullshit.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

If we can both bench press 200 pounds, but I get sick for a month and lose 10% of my muscle mass, I can can only bench press 180 pounds. You are still the same strength, but "relative" to me you are stronger. But you can still only bench press 200 lbs.

The key word is "relative" strength.

All currencies are falling, losing strength. Some fall faster than others. All are getting weaker, but relative to one another, one will be stronger and one weaker.

[-] -3 points by richardkentgates (3269) 2 years ago

and.... yousaidnothing. Another empty statement with an inapplicable analogy.

[-] 1 points by Misaki (893) 2 years ago

We would have more jobs if we bought less goods from other countries.

[-] -1 points by richardkentgates (3269) 2 years ago

We can't afford to. Catch 22

[-] 1 points by Misaki (893) 2 years ago

What do you mean, can't afford to? Have we lost the knowledge required to manufacture things?

People have bought enough iPhones etc. to give Apple $100 billion in profit over the last few years. Those iPhones are made in China and neighboring countries; only a few parts come from the US. The people who bought those phones had plenty of money, and Apple wouldn't even have to increase the price to make them in the US since the profit margin is already so high.

Not to pick on Apple, but your reason fails.

[-] 0 points by jrhirsch (4714) from Sun City, CA 2 years ago

Misaki is right. A strong dollar depends on what it's compared to. A weaker Euro only makes the dollar appear relatively strong. If it buys more bread at the grocery store, then it's really strong.

[-] 2 points by Shule (2244) 2 years ago

This article makes no sense at all. "Quantitative easing" is a fancy word for printing up more money, and it is generally understood that when one prints more money, prices of things go up. That is not deflation, but inflation. You see it at the grocery store.

The main reason for printing up more money is to pay bills when one doesn't have any money otherwise. Usually the government issues T-bills and other securities to drum up cash to operate. The problem with that is the government has to eventually pay out on the securities when they mature, and with interest. So the debt does not go away, but the debt accrues. When one issues a lot of T-bills to drum up a lot of money, the debt can go out of control, If adequate revenue streams are not in place, the government may not be able to pay out on the bills when they come due. i.e. bankruptcy. That is what the Fed is trying to avoid when they do quantitative easing.

There really is only one way for a government to get out of a debt crisis. That is to raise taxes.

Sounds like Bernanke and company are B.S.ing everybody big time.

[-] 1 points by Misaki (893) 2 years ago

There really is only one way for a government to get out of a debt crisis. That is to raise taxes.

logic

But remember, people say that the main issue is jobs, not the debt. (Where raising taxes would also help, but people don't believe that the government creates "real" jobs that would benefit the people who pay taxes.)

[-] 3 points by Shule (2244) 2 years ago

Yes, certainly many people have a perception problem about what the government does. They also need to keep in mind that the government is the largest employer as well as being the largest buyer of manufactured products here in our "capitalistic" USA. So, government revenue/spending has a direct impact on jobs. Also, when debt is reduced, more money can go toward jobs.

Interesting side note; we had a Republican government here in the State of Virginia in which I live some ten or so years ago which ran on the ticket of cutting taxes and government spending. When they got in though realizing what that really meant (i.e. having a lot of people lose their jobs) they thought better of it, and did not go through with their tax and spend cutting plans.

I must add though there is one area where the Federal government can cut spending, and that is in the area where our money is going overseas. That is in the area of financing all those wars going on in the Middle East and elsewhere. This is money which is being flung out of our economy to which a multiplier effect can be applied.

[-] 1 points by Shule (2244) 2 years ago

I don't know what the real numbers are, but I keep hearing stories such as C-130s loaded with pallets of cash flying into this not so secret secret base in Jordan to pay off U.S. bribed alliances in the Mid-East and so on.

[-] 1 points by Misaki (893) 2 years ago

Maybe. The US gives like $5 billion to Pakistan every year, I think? But that started before the war in Afghanistan.

And contractors get much of the money too, much of which probably goes to profits or is used to purchase foreign luxury goods etc.

The best way to create jobs is still to work less. Latest thread on it, which was too crazy for anyone to reply to: http://www.occupywallst.org/forum/the-us-is-1-including-rampage-killings-among-devel/

[-] 2 points by TrevorMnemonic (5827) 2 years ago

This is why we need HR 2990

http://www.govtrack.us/congress/bills/112/hr2990/text

Real reform for the people. From Dennis Kucinich.

[-] 1 points by Grey5Fox (9) 2 years ago

Look, right now we need a new and bigger stimulus than what Obama and company did in 2009. In other words, we need to print money to stimulate the economy to get back jobs. For those that are worried about the deficit, there is an easy way to handle it.......lower the dollar!!!! This way more jobs comes back from overseas, and it becomes harder for private industry to outsource.

And in case the "OMG inflation is bad" people are here, I have news for you, we need some inflation right now. Inflation is not always a bad thing. The kind of inflation we need right now would help the poor big time, and it would ONLY hurt the bankers and filthy rich. Let us take a simple real life example, say I'm a worker and I get a mortgage at a fixed interest rate. Then say during a few years into the mortgage, inflation happens. If that inflation was in tune with economic recovery, then that would mean my salary goes up, and since I have a fixed rate with the bank, it becomes WAY easier for me (a working person) to pay off my mortgage.

Banks (and the mega wealthy who stash wealth) don't want such a scenario. So I beg people not to fall into trap of thinking "OMG inflation = death!!!". Right now we need some inflation, and it would help the working person at this moment. And the risk of hyperinflation like the "free-marketers" here like to push online is ridiculous and laughable. Some food for thought.

[-] -1 points by richardkentgates (3269) 2 years ago

Printing money has nothing to do with government jobs jack ass. And fuck you for continually trying to confuse the issue over and over and over. The printed or created money is going to the banks to cover their shortfalls.

[-] 1 points by RedDragon (-161) 2 years ago

The suggestion that government can spur economy by lowering already historically low rates is too blatantly false to even be believed; Obama is a Fed man.

[-] 1 points by doitagain (234) from Brooklyn, NY 2 years ago
[-] -2 points by TropicalDepression (-45) 1 year ago

Very good post RKG

[-] -2 points by richardkentgates (3269) 2 years ago

What's this doing all the way down here?

[-] -1 points by ronniepaul2012 (214) 2 years ago

You didn't mention Obama or evil republicans!

The end result QE infinity scares the shit out of me, though if it means the Fed owns the majority of bad mortgages maybe the 99% will get their bailout? I really cannot see a good reason for it. It's the kind of thing that makes me go tin foil.

[-] 2 points by gsw (2740) 2 years ago

put Bush name on post title and it gets more action

The unenlightened American public may be in for rude awakening.

Can we get out of Deficit if inflation kicks in. no. So banks will keep interest low as long as possible.

Here is big part of problem:. Corporations profit from US deficit http://www.businessinsider.com/fiscal-cliff-connection-between-corporate-profits-and-deficits-2012-10#ixzz2ASNGJr3O http://www.businessinsider.com/gmos-james-montier-why-company-profit-margins-are-so-huge-2012-3

another problem: I didn't have much economics training in school, but it is interesting.

See the big source of profits? Yep, it was the government's monster negative savings. Or to put it another way, it was the huge deficit equalling 7.6% of GDP that really boosted corporate profits. Now what you have here is the justification for huge government deficits. Following the crisis, the private sector balance sheets were badly damaged, and government deficits have done wonders towards boosting GDP and corporations.

Read more: http://www.businessinsider.com/gmos-james-montier-why-company-profit-margins-are-so-huge-2012-3#ixzz2DIrOh254

[-] -3 points by richardkentgates (3269) 2 years ago

The fiscal cliff is contrived as a cover. Much like the debt crisis, it or the deal resulting will be used to blame for another economic downturn. A downturn created by the devaluing of currency. The economic bullshit fed through mainstream media is noise created to explain away the problem and prevent the greater public from asking, "what happened", because they have already been seeded with the ability to answer it themselves, with a wrong answer.

[-] 3 points by VQkag2 (16478) 2 years ago

Except there will not be another economic downturn as a result ofthe so called "fiscal cliff". Let it pass! Watch the market fall, force the conservatives to compromise, & everything will be fine.

[+] -4 points by richardkentgates (3269) 2 years ago

http://econintersect.com/wordpress/?p=29289

http://www.marketoracle.co.uk/Article37616.html

The markets know it's coming, I'm sure politicians do too. If the markets had failed before the end of the year, we could be spared. That has not and will not happen, so we are going down with them. The dollar as you can see is in decline and the holiday shopping is pushing a lot of new credit(currency) into the economy that has recently been printed(created), bringing the inflation factor of the new money into play, as shown on the graph from Black Friday. The holiday shopping is the kickstart to a new round of visible inflation. Inflation our economy is too weak to handle. I would be so much more comfortable discussing this if you were indeed just an idiot but your repetition and doggedness in countering points you seem to know little about, tells me you are a scripted monkey.

[-] 2 points by VQkag2 (16478) 2 years ago

And you resort to personal attacks because your position is impotent and without merit.

Economic crash? When? How do we avoid it? Are you preparing? How?

You have no answers. All you have is fear mongering 'hidden' threats.

Just tell me when. Maybe 12/21/12? That's a popular one. Before 2013? When?

[-] -3 points by richardkentgates (3269) 2 years ago

You are so absorbed in your task at hand that you forget, we are not trapped in your game.

http://www.motherjones.com/politics/2011/06/speedup-americans-working-harder-charts

[-] 2 points by VQkag2 (16478) 2 years ago

Excellent charts.

Cut taxes/debt for working class, fight for increased wages, penalize outsourcing, reward insourcing, pass the greentech/infrastructure/vet jobs bills.

What do you suggest we do? Scream at the moon and find a corner to crawl into and cry?

[-] -3 points by richardkentgates (3269) 2 years ago

I suggest for the last time that you ditch the attempts at making this a party issue. You still enforce it with your talking points and it doesn't fool anyone. You still aren't presenting data, and you still argue against hard data that shows the Fed, with Washington's approval, is fucking the working class in order to protect the wealth of the 1%. You cannot escape this fact. You sound like Chuck Shumer. A corporatists and guardian of the 1% in liberal's clothing.

[-] 2 points by VQkag2 (16478) 2 years ago

You just mentioned a politician, and accuse me of bringing party into this.?

LOL.

I ain't mentioned party. You should probably leave out your regular anti dem partisan rhetoric. I don't need to mention the parties.

I say pressure all pols for cutting taxes/debt for working class, living wage, penalizing outsourcing, rewarding insourcing.

What do you propose?

[-] 1 points by shoozTroll (17632) 2 years ago

Now there's a twist.

Quoting the WSJ on one day and MJ the next.

I have a subscription to one of those.

Can you guess which one?

[+] -4 points by richardkentgates (3269) 2 years ago

Trying to make it about party.I think I already mentioned this at least once. Care to continue your co-opting? Do it on someone blind enough to ride with it.

[-] 1 points by shoozTroll (17632) 2 years ago

I'm just demonstrating how hard you are spinning richard.

You didn't answer my question.....once again either.

So who is it that really thinks they are co-opting something?

It's you richard the puppet hearted.

BTW: Where and who are all your puppets?

I don't have any...never did, and I find your use of them fascinating.

[+] -4 points by richardkentgates (3269) 2 years ago

I continue to address the devaluing of the American worker's paycheck. You and yours continue to attack me for it. I don't think you comprehend how obvious it is or how exposed your agenda is.

[-] 0 points by shoozTroll (17632) 2 years ago

I keep telling you WallStreet did that.

You deny it, over and over.

You keep spinning to distract from that simple fact.

What's next? You gonna jump on the blame the unions bandwagon?

That's co-option richard..

[+] -4 points by richardkentgates (3269) 2 years ago

I blame WallSt and the Fed. It's the Fed involvement you and yours are attempting to neutralize, which speaks to motive.

[-] 1 points by shoozTroll (17632) 2 years ago

I'll give you 90% WallStreet, 5% FED and 5% other forces.

Next step......throw Wallstreet the fuck out of the FED. They don't belong there.

This ones much simpler than you make it out to be.

Now a question for you.

Who are all you sockpuppets?

[+] -4 points by richardkentgates (3269) 2 years ago

WallSt cannot devalue the dollar. The Fed is in control of inflation policy. So when Mother Jones says that wages do not keep pace with inflation, what they are saying is that the Fed is stripping the wealth of the working class by devaluing it over time. You can spin and juke all you like. The facts remain.

[-] 1 points by shoozTroll (17632) 2 years ago

No richard, it's Wallstreet's definition that means nothing to me.

You're the one likes it, and can see no other.

So snuggle up with WallStreet son, and pretend you have the revolution at heart.

So how about those puppets richard?

[+] -4 points by richardkentgates (3269) 2 years ago

I gave you the definition by Wikipedia, not WallSt. It doesn't matter what source I provide, you attempt to neutralize the information and issue no matter what source I provide. And I have provided many. Your game is exposed.

[-] 1 points by shoozTroll (17632) 2 years ago

I don't care to use WallStreet's definition of inflation.

You refuse not to.

So you are forced to spin in your little WallStreet produced box, all the while refusing to even accept the truth in what I just posted.

Every dime WallStreet makes in profit, devalues someone else's money.

It's simple.........grasp the truth, or spin and spin with you own personal puppets..

[+] -4 points by richardkentgates (3269) 2 years ago

LMAO, so now definitions mean nothing to you. You decide what stuff means. LOL. sounds like you've run out of steam homeboy.

[-] 1 points by shoozTroll (17632) 2 years ago

YES IT CAN AND DOES!!!!!!!

They devalue it every single day!!!!!

With every dime in pure profit!!!!~!~

EVERY time they demand a lay off for their own profit!!!!

EVERY job they insist goes over seas for their PROFIT!!!

With EVERY product they insist be downgraded for their profit!!!

With EVERY cell phone that's only good for a year!!!

EVERY product with built in planned obsolescence!!!

And SO MANY MORE WAYS!!

EVERY fucking dime!! Is a devaluation of someone elses money!!!@ You really are this stupid!

[-] -3 points by richardkentgates (3269) 2 years ago

Show me. I'll get you started.


Devaluation

Generally, a steady process of inflation is not considered a devaluation, although if a currency has a high level of inflation, its value will naturally fall against gold or foreign currencies. Especially where a country deliberately prints money (often a cause of hyperinflation) to cover a persistent budget deficit without borrowing, this may be considered a devaluation.


Now you need to quantify your position with at least as much corroboration. I can provide more for my point if needed. That is debate. Try it, you might like it.