Great Scott! Is THIS what they mean when they say there's going to be hyperinflation?

[ShannonOBrien]

I think I finally understand why Schiff and Rogers are saying there is going to be hyperinflation. Banks loaned out way more than it had (because of the low reserve ratio) --> People defaulted A LOT --> Banks are going bankrupt --> Fed gives them money to cover their losses (5 trillion or so plus bailout $) --> Banks are at almost full reserves --> Banks hold on to the money because they don't know how much more they are going to lose --> As soon as the massive defaults slow down to a trickle, banks will feel comfortable loaning out money again --> 5 trillion becomes 500 trillion (5 trillion x 100 because of the reserve ratio) because banks can loan out a certain amount more than they actually have in reserves --> hyperinflation

Here's what I don't understand though, if the banks lend out the money slowly, can we just have inflation instead of hyperinflation? Have the banks learned a lesson about lending out significantly more than they have or will they end up loaning out just as much as before (plus, they have an incentive because the Federal Reserve has given them the cash to make sure they won't go bankrupt)? Can the Federal Reserve halt the hyperinflation by increasing the amount of money they destroy and thereby deflating the dollar? Will they do that?

 

[TruthisTreason]

I think we'll see other Central Banks cut the rates to prop the dollar up in the coming weeks and months.

 

[ArchPaul]

Here's what I don't understand though, if the banks lend out the money slowly, can we just have inflation instead of hyperinflation?

Possibly, but they are in competition with each other also. So the more they make the more they can expand.

Have the banks learned a lesson about lending out significantly more than they have or will they end up loaning out just as much as before (plus, they have an incentive because the Federal Reserve has given them the cash to make sure they won't go bankrupt)?

Why should they? Its not their money, the feds gave it to them, which is our money. Easy come easy go.

Can the Federal Reserve halt the hyperinflation by increasing the amount of money they destroy and thereby deflating the dollar? Will they do that?

They could raise interest rates, which in effect takes money out of the system. But that would slow the economy.
IMHO, I don't think they gave out the money to lend. They gave it to the banks to prop the market up until this shit storm passes. They don't give a rats ass about people losing their homes. They are just assuring their survival.

 

[dannno]

 

[ArchPaul]

NICE!!!! I love that scene!!!

 

[newyearsrevolution08]

They didn't learn anything, they still ended up with trillions of dollars even when they overextended themselves.

If you ran a business that collapsed and you got paid for it would you have learned any lesson?

 

[NoMoreApathy]

Actual bank reserves have only been increased by about 650 billion.

Up until September, the Fed was sterilizing their liquidity injections by selling treasuries. They began the quantitative easing in Sept.

Inflation will eventually become an issue again, but we're not looking at hyperinflation at this point.

Just buy metals while they're cheap and enjoy these low deflationary prices while we have them.

 

[heavenlyboy34]

Was this from Back to the Future? It looks familiar.

 

[ShannonOBrien]

10 points for recognizing the Back to the Future reference.

 

[Josh_LA]

Here's what I don't understand though, if the banks lend out the money slowly, can we just have inflation instead of hyperinflation? Have the banks learned a lesson about lending out significantly more than they have or will they end up loaning out just as much as before (plus, they have an incentive because the Federal Reserve has given them the cash to make sure they won't go bankrupt)? Can the Federal Reserve halt the hyperinflation by increasing the amount of money they destroy and thereby deflating the dollar? Will they do that?

Yes, banks can halt inflation if they can halt the circulation of money. So yes, if banks learn, they'd be careful lending money and actually do our economy a big favor by deflating artificial prices.

Central bank does not care if people suffer from inflation.

You cannot halt inflation by adding money, you can only add inflation to decrease deflation. Inflation always causes inflation, period.

 

[enjerth]

Actual bank reserves have only been increased by about 650 billion.

Up until September, the Fed was sterilizing their liquidity injections by selling treasuries. They began the quantitative easing in Sept.

Inflation will eventually become an issue again, but we're not looking at hyperinflation at this point.

Just buy metals while they're cheap and enjoy these low deflationary prices while we have them.

I think we can look for hyperinflation... sure, not yet, but the actions being taken now will lead to it, so this is the time to be talking about it.

One of two things has to happen before I think we'll see hyperinflation. Either the economy finally bottoms out and starts to recover and banks get back to business as usual, or OPEC ditches the dollar.

Both of those are encouraged by the current strategies being employed to rescue the economy.

 

[heavenlyboy34]

10 points for recognizing the Back to the Future reference.

yayy!!

 

[HOLLYWOOD]

Maybe Bernake should think again!

BERNAKE Disguised!

 

[bkreigh]

10 points for recognizing the Back to the Future reference.

Do you remember what day they travel back to?

 

[ShannonOBrien]

Do you remember what day they travel back to?

No!

 

[dannno]

November 5, 1955

Guy Fawkes Day.

 

[bkreigh]

November 5, 1955

Guy Fawkes Day.

ding ding. i watched the trilogy one day last week and i just noticed it finally. Every time i watch it i find something new in the movie that i have missed countless times before.