InternationalRockSuperstar

Infinite money suppply must mean that money is valueless.

 

Infinite does not mean very big

 

Do you mean very big?

 

Or do you mean potentially infinite?

try "limitless" for size.

[7]- Bond markets would be punished if buyers think government debt might be unpayable. Though the increased savings of Americans might help here as it did in Japan.

see my initial response to point [1]

[8]- Commodities and equities are only going up in price because Bernanke is threatening inflation and printing.

he is printing.

[8]There is an ideological bias here [monetarist theory] for investors to spend/buy investments.

please focus on arguments rather than people.

[8] Consumers on the other hand are guided more by the real world and not by theory and will be saving not spending.

they'll be doing neither, actually. J6P will be utterly destitute by the time this is all over.

[8] This means the real economy will continue to contract. At some point the real economy will no longer be able to support/ sustain the financial economy, with prices collapsing.

why would the end of the financial economy cause prices to collapse?

[9] -Current asset inflation in emerging economies is based on the US cheap dollar carry trade. All it is achieving is over-valuation in economies which already have over-capacity in production. GDP in developed countries is contracting not expanding. This malinvestment will come to a screeching halt as the China bubble burst leading to further rounds of foorced liquidation and dollar strength.

liquidation, like debt repayment, is simply a transfer of money from debtors to creditors. it is a change in ownership; not a change in supply.

forced liquidation does not affect the supply of dollars.

the dollar strength seen in 2008 had f*** all to do with your liquidation and everything to do with foreign central banks propping the dollar up with $1.4 TRILLION in currency swaps:

$0.5 trillion at this point, but still a good watch:

From:

if liquidation caused dollar strength then there would have been no need for foreign gov'ts to save the dollar like this.

[10]-If worst came to worst, governments would default rather than destroy their currency.

er no, given the historical track record of gov'ts!

[11]- Before it came to that, international government [iMF etc] would institute a gold-backed currency to which other currencies would be fixed and stabilized.

they don't have enough gold to back all their promises - so what you're suggesting would first require sovereign default - see my respond to point [11]

PS the IMF already introduced a gold-backed curremcy in 1967 - it had its gold-backing removed only four years later though!

A few observations as to why the prices will not go hyper:

oh joy.

labeling each of your points from [1] to [11]...

[1]- there are now laws in place that prevent central banks in developed countries from printing willy nilly...

clearly there are no such laws in place given the recent actions of developed countries. I'm not even sure what you're referring to. perhaps you are referring to the Federal debt limit which seems to get raised everytime it's about to be breached [linky]

[1] ... they are now mostly borrowing and expanding the debt bubble even further.

this is incorrect, given that the Fed was monetizing 47% of the debt back in June/July [linky] and given the continuing collapse in feredral tax receipts [linky] you can bet your arse that monetization rates are only going to increase.

the UK gov't is up to similar sh1t [linky]

[2] - this debt bubble is contracting...

here you say that the debt bubble is contracting, yet in only the previous sentence (coloured in green) you say it is expanding!

clearly you are contradicting yourself and it is not possible for me to formulate an appropriate response to this part of your post until I know which one of these two comments of yours is the real Slim Shady.

[3]-the behaviour of banks and consumers is influenced by the deflation in assets and collateral leading to a reduction in borrowing and lending levels. This deleveraging will continue to exert deflationary forces as both banks and consumers seek to restore there balance sheets.

and why would deleveraging be deflationary or even cause prices to fall? it is simply a transfer of money from the debtor to the creditor.

[4]- the CBs are resorting to such desperate monetary policies because they see themselves fighting deflation and not chasing after windmills.

no, the CBs are resorting to such desperate monetery policies because tax revenues have collapsed to less than half of what is needed to fund gov't expenditure.

[5]-the amount of money printing is insignificant to the amount of debt that is contracting. If the economy was not debt-based then an argument could be made for hyper-inflation... but as it stands any new money creation is swallowed up in one very large hole of debt.

again, debt repayments are simply a transfer of money from debtors to creditors. it is a change in ownership; not a change in supply.

[6]- Political developments could just as well enforce fiscal prudence as they could bring about money printing to the nth degree.

nope. we are simply too far down the laffer curve for any tax rate hikes to remove from circulation even a fraction of what has already been printed.

if they'd begun enforcing fiscal prudence say 10 years ago then maybe.

It would be futile to argue with hyper-inflationists as long as they insist that inflation/ deflation is by definition an increase/decrease of base money supply. And this is my point, that hyper-inflationism can not be argued with as long as it is based on this self-contained "platonic" truism.

well it's true that the USD supply has entered hyper-inflation, so of course there is no point in you saying that it hasn't.

prices haven't gone hyper yet though, so posters can still debate whether prices will go hyper or not.

rather than making personal attacks on posters who say that prices will go hyper; why don't you put forward your arguments as to why you think prices will not go hyper.

My point is that a theory about the world is something that should be open to criticism by the real facts of the world...

agreed, so try including some facts in your posts rather than the usual ad homs, strawman, false dichotomies and strawmen.

Some people have become so emotionally attached to hyper-inflation theory that it has become a dogma functioning almost like a religious belief.... nothing in the real world could falsify it... it is a matter for faith not uncertainty or doubt.

you talk about 'real facts' and then in the very next sentence post another ad hom.

you are attacking the people who predict hyper-inflation, rather than the arguments for hyper-inflation.

the fact that Sinclair's a total dickwad doesn't make gold a bad investment though.

Ummm... what's going on in the real world?

[sophistry]

well in the real world the US has been balance sheet insolvent for a long time and has this year become cash-flow insolvent.

you could start by addressing this point instead of arsing about comparing hyper-inflation to Jesus.

No offence but that's a load of patronising waffle.

isn't it just.

Wow!

What a clear statement of complacency!

(Nothing personal in this, but I think this is very dangerous thinking.)

There may be a huge, huge volume of hedgie selling in the days to come.

The ocean may be pushing through the straw in the opposite direction.

just to clarify, you are expecting gold to fall significantly below its current $US 1161.40 next week?

You have summed up my own complex feelings about Sinclair in one short sentence!

The Pied Piper speaks!

 

Who is in his kitchen?

The gas is full on, and they are lighting up a ciggy

the fact that Sinclair's a total dickwad doesn't make gold a bad investment though.

Payroll numbers out. Down only 11,000! Where did they find these figures?

well, to be fair, even the Shadow Stats unemployment measure fell today...

...although it is at ~22%

can't believe no-one's posted this yet...

http://www.telegraph.co.uk/finance/persona...Cash4Gold..html

Gold: Eighties pop star MC Hammer has become an equity partner in the gold buying service Cash4Gold.

MC Hammer, the rapper was famous for wearing baggy pants and singing "You can't touch this", can't get enough of gold.

...

If your definition of Hyper-Inflation is exponential money printing then are you not saying that the UK entered Hyperinflation at around the same time?

 

Not wanting to open up the whole definitions argument again, just wanting to make sure I read that message as it was intended, as clearly the US is not experiencing price inflation yet.

your interpretation of my post is correct.

Gold will go more or less sideways for about a month

unlikely IMO given that the USD entered hyper-inflation in late June - gold has been making a nice upward curve since then except for 2 major takedowns, both around options expiry day - and it appears that central banks have recently lost their ability to bring about falls on these days.

I think a correction or at least a month or two of consolidation would be healthy here.

didn't we have a correction on Friday already?

He started a thread on Agri-stocks (in the Members Only subforum):

http://www.greenenergyinvestors.com/index....ic=8325&hl=

ta.

Yes... I think Bubb is correct about property and his TFH food ideas, but on Gold/Silver very wrong.

is there a GEI thread on that somewhere?

Today was very bullish IMO, gold was targeted hard by the cartel and came back convincingly.

...

I strongly agree.

I am as nervous as I am excited about gold. I can't believe how high the price has gone.

I can, given that the USD entered hyper-inflation in June.

f*** me! - $1161 already.

5 years ago a market open like this would put a smile on my face.

these days it makes me worry...

http://www.bloomberg.com/apps/news?pid=206...id=aegJu7b9wvWg

U.K. Royal Mint Quadruples Production of Gold Coins

Thursday, 19 November 2009

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Is that all Errol.!!!

...

Just people who know that gold is going to £5000 an ounce.

...

Hyperinflation... seems to be aligned with anarchism...

hyper-inflation is a symptom of state failure.

That's why it is faith based. Either you believe gold has the value that people say it has - or not.

nothing has value; people attach value to things.

This is also why I don't share Romans holiday's notion that we would go back to a gold backed currency. It doesn't work, except in gold-pushers mythologies...

the problem with a gold standard it the same as the problem with all imposed monetary standards.

it doesn't matter what you impose as a currency; it is the imposition itself that is the problem.

... It has serious structural issues of it's own (relating to base growth vs. real economy growth for example) and its policy flexibility is far worse than that of paper currencies.

all imposed monetary systems place arbitrary contraints on the money supply that are damaging to economic productivity.

I sincerely hope on an opening of a reliable "remote controllable" storage facility in Hong Kong. Like GM/BV only based in Hong Kong - truly outside the US's and Europe's jurisdiction.

yeah, 'cos Eastasia's so much better than Oceania

It still amazes me just how financially dumbed down and ignorant people are and there is'nt even any FLOURIDE in our water.