Economic Collapse: the breakdown

[little_monkey]

Federal Reserve is expected to announce new bond-buying program

"Nervous global investors can't seem to own enough U.S. Treasury debt, yet the Federal Reserve may soon make the bonds even more scarce.

With the U.S. economy struggling, Fed policymakers are expected this week to announce a new bond-buying plan specifically aimed at pulling long-term interest rates lower."

http://www.latimes.com/business/la-f...,4953009.story

Duh. I must have read at least 4 or 5 mainstream articles months ago where economists were certain the Fed wouldn't initiate another round of easing. And I'm thinking, are these people really that removed from reality? I just don't get it. It's not that difficult to figure out where we're headed. So with QE3 global announced last week, I guess we can call this QE3 national? QE3 lite? QE3 add-on?

Wow, how dunce can you be? I'm referring to this part of your post 17, which is blatantly a statement about religious belief:

"They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD" -- Ezekiel 7:19.

So you tell me to keep religious belief out of this thread, yet you have used religious belief to support your point of view. There's a word for people who have double standards. I'll let you figure out that one.

[seanD]

That post (#75) wasn't addressed to you, you moron. The prior conversation had ended as far as I was concerned. The statement was about the article I had linked to.

[little_monkey]

That post (#75) wasn't addressed to you, you moron. The prior conversation had ended as far as I was concerned. The statement was about the article I had linked to.

It doesn't matter if that post was not adressed to me, you used your religious beliefs to support your claim, and by de facto, you've open them to be subject to criticism. If you want to restrict the discussion in this thread on economic matters, and nothing else, I'm fine with that, as long as you also abide by that restriction.

[seanD]

The religious connotation was just for effect and had nothing to do with the core of the discussion between me and Zombie, which was whether I thought gold and silver was a viable hedge against an economic collapse. Scripture or no scripture, I believe hyperinflation is coming, and it will be global, but I don't base this on dogma, I base it on economic common sense. If this occurs, and just knowing how humans naturally are, we can pretty much view this as a situation that will have "apocalyptic" repercussions, of which gold and silver won't do much good. When humanity is jaded, angry, and desperate at the same time and for the same reason, this has very adverse consequences. Again, it's not based on dogma, it's based on rational observation. We see through observation, not religious dogma, that there is a class war occurring all over the globe demonstrated by the protests, marches, rallies, violence, looting, riots, and uprisings which is continuing to grow and spread from country to country, and this is happening when hyperinflation HASN'T even occurred yet.

So scripture is irrelevant, because this comes down to the issue of whether hyperinflation will occur or not. This has been the topic of the thread.

[seanD]

Bring it, baby, bring it. When it finally hits, it's gonna hit hard.

[little_monkey]

I don't think you're reading this right. The stock market fell on this news. That means the Fed's action indicates that the economy is going down, that is, deflation, not hyperinflation.

[seanD]

We're talking long term effects here. How does the psychological compulsion of day traders translate to deflation? It takes time for this amount of liquidity to circulate. We haven't even felt the full effects of QE2 yet.

Just stop, okay? You're really starting to look silly. It's apparent you know nothing about what you keep dismissing. And the fact you just keep throwing out these ridiculous dismissals and troll bits is really beginning to sound you're just scared and can't face the reality of this.

[little_monkey]

We're talking long term effects here. How does the psychological compulsion of day traders translate to deflation? It takes time for this amount of liquidity to circulate. We haven't even felt the full effects of QE2 yet.

Just stop, okay? You're really starting to look silly. It's apparent you know nothing about what you keep dismissing. And the fact you just keep throwing out these ridiculous dismissals and troll bits is really beginning to sound you're just scared and can't face the reality of this.

Pointing out your errors is no indication of my being scared. I really don't know how is that logical.

Stock traders react to the news of the day. If that is positive for the economy in the future, they will react positively. If it's negative, they react negatively. In this case, the interest rate is already lower than it ever was. So they see that Bernanke's action won't do very much to stimulate the economy. So the only thing left is that the FEDS has anticipated a bad economy coming around. Hence bad news, stocks go down.

[seanD]

Equities can crash and burn for all I care. In fact, if it weren't for day traders and pure psychology, we would undoubtedly have had a -3-5k point market correction already. I'm looking at long term.

[little_monkey]

Equities can crash and burn for all I care. In fact, if it weren't for day traders and pure psychology, we would undoubtedly have had a -3-5k point market correction already. I'm looking at long term.

You do realize that if the stock market would crash, we would be in a period of deflation, not hyperinflation?

[seanD]

Market corrections based on compulsive reactionary day traders doesn’t equate to deflation in the long term. I mean how much more simpler can I make that. Secondly, the market should have corrected itself at least 3-5k points lower from where it is now, but the Fed didn’t allow this in 2008, 2009, or 2010. So the fact the US government and the Fed will do everything in its power to prevent even short term deflation means any signs of deflation now will just make future inflation down the road even more of a sure thing. Thirdly, since historically unprecedented things are happening in the economy and our financial system now, even if deflation happens long term, we could have stagflation -- where prices in certain commodities skyrocket while everything else continues deteriorating to depression-like conditions -- and there are quite a few reasons for this of which I won’t get into because we’ve been down this road before.

[shadowmaster]

Market corrections based on compulsive reactionary day traders doesn’t equate to deflation in the long term. I mean how much more simpler can I make that. Secondly, the market should have corrected itself at least 3-5k points lower from where it is now, but the Fed didn’t allow this in 2008, 2009, or 2010. So the fact the US government and the Fed will do everything in its power to prevent even short term deflation means any signs of deflation now will just make future inflation down the road even more of a sure thing. Thirdly, since historically unprecedented things are happening in the economy and our financial system now, even if deflation happens long term, we could have stagflation -- where prices in certain commodities skyrocket while everything else continues deteriorating to depression-like conditions -- and there are quite a few reasons for this of which I won’t get into because we’ve been down this road before.

http://conservativedailynews.com/201...inflation-yes/

see the video

[seanD]

http://conservativedailynews.com/201...inflation-yes/

see the video

Interesting. Only thing I would disagree with is that Obama isn't listening to Volcker. Volcker is the guy who raised interest rates to put a cap on inflation and he's been critcal of the Fed's recent policies. Obama's listening to Bernanke, Summers, and Geithner. There's actually a currency world war going on right now. Every major country is devaluing their currency with low interest rates and/or excessive printing to make their exports more attractive, lest they hit a recession. On top of that, fiat currencies are getting further killed with all the printing and bailouts. This could easily cause investors and speculators to pull all their extra cash out of equities and bonds and into the commodities market. A stock market plunge would be just the thing that could trigger this activity, and this would be the hyperinflation scenario that could occur overnight. An EU implosion is another trigger. There are quite a few variables that could easily cause hyperinflation in spite of the depression we're in right now.

[seanD]

So where we presently stand, it comes down to Europe right now.

If Greece defaults, then this will trigger a chain reaction of leverage contraction in the banking system, including western banks. This means we'll see a 2008-style banking crisis which will require another bailout, probably twice as big as 2008. And of course if Greece defaults, Span, Italy, Portugal, Ireland, France, and other European nations will likely follow, which will trigger more leverage contractions, and require more bailouts.

If you want to see the first major victim, MF Global is a microcosm of this. It's interesting that the fall of MF Global wasn't even related to derivatives, but merely contracting EU asset value, which is the lesser crisis. I get a kick how the idiots in that article assure us that all the big banks have hedged themselves against European liabilities lol. Well, we know what happened when Goldman Sachs used derivatives from AIG to hedge themselves against subprime mortgage liability.

So we're looking at either an epic global deflationary collapse never seen before in the history of civilization, or a massive liquidity injection to keep wallstreet and the US financial system propped up, which will eventually trigger either hyperinflation or hyper-stagflation. Not to mention what kind of effect this will have with the angry masses.

[seanD]

Don't be fooled by any bogus employment number. The EU crisis, which never went away, was only temporarily suspended with all the political fluff and promises of liquidity injections. The euro continues to sink, and European bank stocks continue to drop like a rock (only to temporarily spike every one in awhile when someone farts positive news about the economy). We'll have another EU crisis (or rather the same crisis just rearing its ugly head again) sometime this year, only it will be worse. They'll probably make more liquidity injections and empty political promises, and it will repeat over and over, each time the crisis returns it will be worse than before, until eventually it's totally out of hand and then the fun begins. In the meantime, we have a crisis building in the middle east, which could have serious ramifications on the global economy via spikes in oil. Though it's uncertain just how all this will unfold, the only certainty is that it ain't going to be good for 2012. 2011 was just a precursor.