Economic Collapse: the breakdown

[little_monkey]

I mean, making a prediction that even the core inflation rate would hit the negatives this year, in spite of everything we've seen thus far, was so far out in left field that I'm beginning to think it's not your lack knowledge but something mentally wrong with you.

Which part of "My forecast, which btw wasn't mine ... of minus inflation sucks, but that's besides the point. It only means Obama's policies worked better than those who made those bad forecasting last year" don't you understand?

I understand what CPI is. Your arguments, however, go beyond lack of knowledge. Even a person with less than intermediate economic knowledge could look at their grocery and energy bills and compare them to their bills in just the last year or so.

Your selection of a few items is arbitrary and unrepresentative. Granted it takes time for changes in prices to work itself into the system, but your point of view is that there is this vast conspiracy by the government to make the CPI look smaller than it is. This conspiracy only lives in your warped imagination.

[seanD]

Which part of "My forecast, which btw wasn't mine ... of minus inflation sucks, but that's besides the point. It only means Obama's policies worked better than those who made those bad forecasting last year" don't you understand?

It has nothing to do with what Obama is or isn't doing, it's the Fed's doing; and the Fed basically does what it wants to do in regards to money liquidity. Negative inflation is actually what we need, because we need the markets to correct themselves so that legitimate price discovery can be achieved. Since the bubble isn't helping employment or GDP much, and certainly isn't helping curtail the reckless banking system, a crash is the lesser of evils in this scenario. And when someone endorses a forecast as unabashed as you did to counter someone else’s argument, I consider it as good as a forecast they made themselves. Had you been more humble and less loony about it, I would have had a different opinion. No sound-minded person is as loudmouthed and assertive about a forecast they’re endorsing if they aren’t absolutely sure themselves that it’s accurate. Of course, this is why I think I made the mistake of assuming you’re sound-minded in that equation.

[little_monkey]

It has nothing to do with what Obama is or isn't doing, it's the Fed's doing; and the Fed basically does what it wants to do in regards to money liquidity. Negative inflation is actually what we need, because we need the markets to correct themselves so that legitimate price discovery can be achieved. Since the bubble isn't helping employment or GDP much, and certainly isn't helping curtail the reckless banking system, a crash is the lesser of evils in this scenario.

If you think that letting the system collapse instead of a lesser-pain road with government intervention, think again. I think you are disregarding history which abounds with what happened in times of economic depression: great hardship on the people. If you need a reminder, watch John Steinbeck & The Grapes of Wrath .

And when someone endorses a forecast as unabashed as you did to counter someone else’s argument, I consider it as good as a forecast they made themselves. Had you been more humble and less loony about it, I would have had a different opinion. No sound-minded person is as loudmouthed and assertive about a forecast they’re endorsing if they aren’t absolutely sure themselves that it’s accurate. Of course, this is why I think I made the mistake of assuming you’re sound-minded in that equation.

Yep, I really believed that those who forecast on that website had a crystal ball that gave them 100% foresight. LOL.

[seanD]

Yep, I really believed that those who forecast on that website had a crystal ball that gave them 100% foresight. LOL.

It's not even about looking at a crystal ball. It takes about as much common sense as looking at the sky and figuring out whether it's going to rain or not. I admittedly don’t know too much about the source you linked to, but no reasonable economist would have predicted that, so as far as I know, it was probably a satire site, like The Onion, or else the so-called economist that made the prediction is smoking crack. And as ignorant as you are, you bought into it.

[little_monkey]

so as far as I know, it was probably a satire site, like The Onion, or else the so-called economist that made the prediction is smoking crack.

Duh, the site I used in post #68 is this one: http://www.forecasts.org/inflation.htm, and as you can see, they have revised their forecast. I don't know who runs it, but it sure sounds like a right-wing organization to me, probably some of your "friends". They even advertise: "Inflation Is Coming The World's Financial System Is Crumbling. Here's The Worst-Case. www.ifii.com/Hyperinflation ". Indeed, they probably were smoking crack, and still are. LOL.

[seanD]

Consequences of the global derivative market...

http://money.cnn.com/2012/05/18/mark...x.htm?iid=Lead

This is just a taste of the potential nuclear bomb that can ignite, especially with the potential EU meltdown looming on the horizon.

[little_monkey]

Consequences of the global derivative market...

http://money.cnn.com/2012/05/18/mark...x.htm?iid=Lead

This is just a taste of the potential nuclear bomb that can ignite, especially with the potential EU meltdown looming on the horizon.

Duh, get a grip on reality. The average gas price on Memorial Day is 30 cents lower than one year ago, on the same day.

So much for your incredible hyper-inflation prediction... LOL.

[seanD]

Duh, get a grip on reality. The average gas price on Memorial Day is 30 cents lower than one year ago, on the same day.

So much for your incredible hyper-inflation prediction... LOL.

The fuel prices have been fluctuating up and down since 2009, but have been steadily rising overall. If you read the OP, there are a few long term scenarios forecasted. Collapse of the derivative market is one of them. Then I listed wild cards that could quicken those scenarios. As the EU unravels, so will both the equities and derivative markets. The derivative market is the doozie. My belief is that they won't let this happen again (which would be much worse than 2008), and will do everything in their power to prevent it, including flushing the system with more and more liquidity. So I wouldn't get too ecstatic about signs of a deflation because this is just more reasons for them to fire up the printing presses.

[little_monkey]

So I wouldn't get too ecstatic about signs of a deflation because this is just more reasons for them to fire up the printing presses.

Duh, in times of economic recession, printing money is the right solution. Here's an economic lesson for you:

Recession → deflating prices
Printing money → inflating prices

Therefore,

recession + printing money → stabilizing prices

[seanD]

Duh, in times of economic recession, printing money is the right solution. Here's an economic lesson for you:

Recession → deflating prices
Printing money → inflating prices

Therefore,

recession + printing money → stabilizing prices

It doesn't work that way lol. That's why gas prices, for example, are up 53% since 2009. You laugh that gas prices fell lower than they were last year, but they were up 55% from 2009 overall, you moron. And that's a result of all the continuous stimulus.

[little_monkey]

It doesn't work that way lol. That's why gas prices, for example, are up 53% since 2009. You laugh that gas prices fell lower than they were last year, but they were up 55% from 2009 overall, you moron. And that's a result of all the continuous stimulus.

As always, you're mixing apples with oranges.

Gas prices are going up because of a simple economic fact: growing population and limited resources, hence in the long term, prices will go up... unless there are wars, uncontrollabe famine to decrease the population, or a humongus treasure of oil is found somewhere. But those two options are unlikely, as every government is pursuing policies to increase its population, and we are running out of places for oil exploration. So in the long term, growing population plus limited resources will jack up the price of gas, and any other commodity for that matter. The only reprieve we could get is through new technology, making the demand of a commodity useless. That could happen with gas if we are wise enough to develop the so called "green" energy. Until then, in the long term, gas prices will tend to go up. But in the short and medium term, its price will go up and down, depending of what the world economies are doing. But that is another issue.

My equations is in regard to the economy of a sovereign state, not to a particular commodity, especially like gas. If we are in a recession, or low growth, printing money is the correct prescription. That's why since October 2008, we haven't fallen into a depression. The government correctly stimulated and QE'ed the economy. Now we are in a low growth phase, rather than a negative phase.

[seanD]

Commodities have risen across the board since 2009. I was using the GLS just as an example, you twit. It has nothing to do with population growth and limited resources. It's stimulus.

[little_monkey]

Commodities have risen across the board since 2009. I was using the GLS just as an example, you twit. It has nothing to do with population growth and limited resources. It's stimulus.

Funny, you only pick certain period that is convernient to you. Get your facts straightened. Here's the price of oil in the last five years.

http://www.indexmundi.com/commoditie...ndex&months=60

It goes hand in hand with what was happening to the world economies in the last five years:

http://www.indexmundi.com/g/g.aspx?c=xx&v=66

In the short and medium term, as the world economies go, so will the price of oil. In the long term though, it will go up, and that's because of what I said: growing population and scarce commodity.

[seanD]

Commodities are up across the board. It's stimulus, which is why commodities go up with the flow of the equities market bubble. Bernanke is trying to maintain the illusionary bubble equivalent of the real estate bubble prior to 2008... but it ain't working, which is why we're going up and down -- recovery, recession, recovery, recession, etc. -- for the last four years. Your theory might be true (of course, overlooking the fact that the price of gas still shot up when demand was low) if the rise wasn't perfectly aligned with other commodities. This is indicative of stimulus. No other reason. In order for Bernanke to re-inflate the bubble each time it begins to deflate, he's going to have to increase the liquidity injections, and by doing so, commodity prices are going to shoot through the roof. But he has no choice other than let it all crash. This is also happening in Europe. Either inflate or crash and burn. Of course, the Reps will blame Obama's policies for inflation, as if any other president could do anything differently, and Obama will use your lame excuse or blame the Middle East. Both are wrong.

[little_monkey]

Commodities are up across the board. It's stimulus, which is why commodities go up with the flow of the equities market bubble. Bernanke is trying to maintain the illusionary bubble equivalent of the real estate bubble prior to 2008... but it ain't working, which is why we're going up and down -- recovery, recession, recovery, recession, etc. -- for the last four years. Your theory might be true (of course, overlooking the fact that the price of gas still shot up when demand was low) if the rise wasn't perfectly aligned with other commodities. This is indicative of stimulus. No other reason. In order for Bernanke to re-inflate the bubble each time it begins to deflate, he's going to have to increase the liquidity injections, and by doing so, commodity prices are going to shoot through the roof. But he has no choice other than let it all crash. This is also happening in Europe. Either inflate or crash and burn. Of course, the Reps will blame Obama's policies for inflation, as if any other president could do anything differently, and Obama will use your lame excuse or blame the Middle East. Both are wrong.

Wow, are you ever confused!!! Bernanke is just following the right prescription: recession + printing money → stabilizing prices. Governments cannot control the economy. The economy is far too big for any government, including the US government. It's like the elephant in the room: you can manage it, fine tune it, give it a slight push in one or the other direction, but on the whole, seven billion people respond to thousands of factors that make them decide if they are going to spend or hoard their money, and governments have to deal with that monster. READ: It's the economy that drives Bernanke to increase the money supply, not the other way around.

Secondly, what's happening in Europe is the fact that Germany is imposing austerity programs on countries like Greece that will drive them to the ground. What Greece needs is stimulus money to start up their economy, then once that is accomplished, they can start paying off their debts. In the present situation, it would be better off for Greece to leave the Europe zone, institute their own currency, and devalue it w.r.t the euro. That would increase their exports, decrease their imports, and increase local employment, and their recovery would be far less painful than what's happening right now.