For those not schooled in how to win arguments, the beginning
point is in figuring out how to
Framethe argument, so that the conclusions seem
inescapably correct.
This author (it was unsigned; no disrespect intended) begins
with the premise that all deflationists agree with Prechter. This
is incorrect. He then goes on to say the Fed can inflate at will
(true) and that this is always the antidote to deflation
(untrue). He also says all money data proves him correct - really?
Then why has the M1 Multiplier been dropping steadily since the
late 1980's, and plunging lately? He doesn't mention the "pushing
on a string" phenomenon, because that is where his argument falls
down. In fact all reflation efforts since 2000 have failed, as
shown by looking at the S&P or other indexes priced in terms of
other currencies, i.e. the Euro or gold.
They want you to think deflation is no problem because they
can't do anything about it.Look at Japan, it's been caught in
deflation since 1990!
is valid, I myself have in the past highlighted that.
The whole article is actually aimed at stagflation and neither
inflation or deflation, I just highlighted bits for my arguement
with Dodger...which has been going on behind the scenes. So USA
beats Spain 2-0
"The third important point is that economic slowdowns usually
trigger massive reflationary responses from the Fed that reignite
inflation. Such was the response in 1958, then again in 1970 (not
described here), in 1974, 1980, 2001, and currently in 2007-2008.
Anytime the Fed has responded by massively reflating the economy,
the typical result has been stagflation."
There are big differences between then and now. One major
difference is that there was very little in the way of household
debt, and no real bond market back then. Completely different from
now, where the total size of derivatives in equal to 10 years worth
of GLOBAL GDP. And that doesn't include credit cards, Commercial
real estate, defaulting mortgages, etc.
IMO we'll get inflation after we finish off the deflation and
deleveraging.
For those not schooled in
The Deflation Scare
Posted by PA on 24th of Jun 2009 at 04:16 pm
For those not schooled in how to win arguments, the beginning point is in figuring out how to Framethe argument, so that the conclusions seem inescapably correct.
This author (it was unsigned; no disrespect intended) begins with the premise that all deflationists agree with Prechter. This is incorrect. He then goes on to say the Fed can inflate at will (true) and that this is always the antidote to deflation (untrue). He also says all money data proves him correct - really? Then why has the M1 Multiplier been dropping steadily since the late 1980's, and plunging lately? He doesn't mention the "pushing on a string" phenomenon, because that is where his argument falls down. In fact all reflation efforts since 2000 have failed, as shown by looking at the S&P or other indexes priced in terms of other currencies, i.e. the Euro or gold. They want you to think deflation is no problem because they can't do anything about it.Look at Japan, it's been caught in deflation since 1990!
Your point on Japan
Posted by ravun on 24th of Jun 2009 at 04:32 pm
is valid, I myself have in the past highlighted that.
The whole article is actually aimed at stagflation and neither inflation or deflation, I just highlighted bits for my arguement with Dodger...which has been going on behind the scenes. So USA beats Spain 2-0
fwiw
Posted by ravun on 24th of Jun 2009 at 04:36 pm
"The third important point is that economic slowdowns usually trigger massive reflationary responses from the Fed that reignite inflation. Such was the response in 1958, then again in 1970 (not described here), in 1974, 1980, 2001, and currently in 2007-2008. Anytime the Fed has responded by massively reflating the economy, the typical result has been stagflation."
Lets go there again
Posted by ravun on 24th of Jun 2009 at 04:26 pm
http://www.wintersonnenwende.com/scriptorium/english/archives/articles/hyperinflation-e.html
http://www.marxists.org/history/etol/revhist/backiss/vol3/no1/jones.html
http://www.geocities.com/Athens/Cyprus/1169/Weimar.htm
http://www.mwsc.edu/eflj/german/gc/inflation.html
http://www.schillerinstitute.org/economy/phys_econ/worldeconomiccrisis.html#Typical Collapse Function
http://www.historylearningsite.co.uk/hyperinf.htm
http://www.zum.de/whkmla/region/germany/turm2023.html
http://www.wibemedia.com/german_inflation.html
http://www.hitler.org/speeches/09-12-23.html
http://www.usagold.com/GermanNightmare.html
http://www.marxist.com/germany/chapter5.html
http://www.kdhs.org.uk/history/as/as_unit2/hyp_effect.htm
http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html
http://www.inaxis.org.uk/history/weimar.html
http://economics.about.com/library/termpapers/bltermpaper-germany-a.htm
There are big differences between
Posted by PA on 24th of Jun 2009 at 04:34 pm
There are big differences between then and now. One major difference is that there was very little in the way of household debt, and no real bond market back then. Completely different from now, where the total size of derivatives in equal to 10 years worth of GLOBAL GDP. And that doesn't include credit cards, Commercial real estate, defaulting mortgages, etc.
IMO we'll get inflation after we finish off the deflation and deleveraging.
Yup,If Matt and Steve's scenario
Posted by shamutooth on 24th of Jun 2009 at 04:42 pm
Yup,If Matt and Steve's scenario plays out with a crushing move down this fall I don't think anyone will be able to say it's inflationary.
Just be warned
Posted by ravun on 24th of Jun 2009 at 04:49 pm
down the line....now I am off the subject, work to be done
Ravun,I agree. At some point
Posted by shamutooth on 24th of Jun 2009 at 05:05 pm
Ravun,I agree. At some point there will be inflation,but maybe not just yet.