Post on another forum about deflation/inflation arguement.

[bambbrose]

This is a post from a user on another forum I frequent. Anybody want to refute? I think he has some good points.

What long term fundamentals point towards inflation? You'll get a Pulitzer if you can convince me we have are going to have widespread inflation.

Wages are DOWN and FALLING, asset prices are DOWN and FALLING OFF A CLIFF, credit availability is DOWN and FALLING. You might see certain commodities increase in value due to supply constrictions but what do you think all "feds" are doing? They are literally all doing the same things, this morning at the exact same time! Do you think they'd be slashing rates all at the same time when they are already at historical lows if they thought inflation was a problem? That was just to calm people's nerves about oil and food prices (gas under $3 T-minus one week).

They can run the printing presses 24/7/365, if credit is constricted like now it won't matter. Commercial banks create ten times the money the fed does, and the treasury is the real "fed" in this since. Other nations that have been buying our debt are not overly enthusiastic about increasing their purchase volume or frequency.

I hope you are right and we do see inflation. Then all I have to do is buy gold.

 

[DrCap]

Deflation it remains IMHO since March.

Credit is contracting faster than they can push money into the world.
Ben really needs to just go with helicopters literally to get inflation... (the stimulus package was a helicopter drop, but not nearly enough for the credit contraction and 'perceived wealth' that was out there).

http://www.ronpaulforums.com/showthread.php?t=127381

 

[eric_cartman]

a simple way to refute the deflationary argument is to ask them how the $100 + trillion in unfunded liabilities (mostly social security and Medicare) are going to be paid? the only answer is that they will either default, or pay for them with the printing press.

the deflation people really don't understand what's happening, and i hate arguing with these people. if they believe deflation will happen, they can go ahead and hold onto their paper dollars. i'll hold onto my gold, and we'll see who is right.

there's a reason we call him Helicopter Ben

 

[DrCap]

a simple way to refute the deflationary argument is to ask them how the $100 + trillion in unfunded liabilities (mostly social security and Medicare) are going to be paid? the only answer is that they will either default, or pay for them with the printing press.

the deflation people really don't understand what's happening, and i hate arguing with these people. if they believe deflation will happen, they can go ahead and hold onto their paper dollars. i'll hold onto my gold, and we'll see who is right.

there's a reason we call him Helicopter Ben

It's not a question of what will eventually happen, it's a question of what has been happening and may happen in the future near term.

The money supply is money and credit, not just money, and credit is evaporating faster than the money can be lent out.

In the end, all fiat currencies die of inflation, it's a fiat currency's destiny. But right now most asset classes have not held up well against cash.

Sorry though I'm not selling my gold or even my silver (though a few grand would have been better in cash over the past year than at the prices bought). Diversification is key and I would no longer be shocked if world fiat currencies all collapsed in the dark of night.

I also would not be shocked if PM's crashed in the near term and I would buy more.

No need to argue, since you don't like to.
Go ahead, sell every asset you own and buy gold- you might win big. Good luck. I'm just risk averse.

 

[ShowMeLiberty]

How did Peter Schiff say it on Glenn Beck this week? The prices of the things you need (food, energy, etc) will go up while the prices of things you own (house, 401K, etc) will go down.

It's not going to be a purely inflationary situation. It will be more of an inflationary depression, if I'm remembering correclty what Peter said.