Fuck that shit. We're going INTO DEFLATION baby! Yeehaw! And it's gonna be GUUUUUUUHREAT. For mostly everybody, except the rich because they will stay rich and not get much richer. I'll tell you why too: -Only thing holding back deflation is money supply/central banks. Productivity increases are still going on (in fact the crisis has made them like 10x faster) -What the fuck do you think the Fed is going to buy when there is no more fucking debt to monetize? Well? Eventually they're gonna run out of debt to monetize because they'll own ALL OF IT. You understand how this is not going to work? Me too. -Eventually (hopefully soon), all these retards are gonna understand we entered a new economic era in which basically deflation is a-okay. Look at Japan, it's not going badly there. The idea is that inflation will lead to "OMG MUST INVEST NOW AND BUY MORE STUFF B4 TOMORROW I WILLZ BE POOR!". This works in EXPANDABLE situations. Like pretty much always until 2000-ish (notice how it stopped working too?). When you're already buying as much as you could possibly want to buy, you're not going to buy/invest more just because it'll be more expensive tomorrow. Nobody needs five TVs, three cars and six sofas and even though businesses have HUGE amounts of cash on the books nobody is investing. Why? Because there is fucking nothing to invest in. When the fuck are people going to realize that pretty much everything is perfect already until the Fed/.GOV and financial sector (with the help of the .GOV) fucked it all up again. But it's still not fucked up in such a way that inflation is going to be helpful or in any way even possible over the long run. Inflation through printing does not stick unless so much is printed it cannot be undone (not the case at all). Remember, the Fed basically has to undo its actions (eventually) and will at some point run out of debt to monetize. So we're gonna have one of three scenarios: 1) We have super duper growth, the economy (miraculously) recovers to trend growth (like real growth right, not nominal GDP inflation). Basically in practical terms this means we have to live like the Jetsons in 2040. What fucking else are we going to invest in that is going to lead to growth? Outcome: Sort of normal inflation probably. Fed will have been succesful and will sell the bonds back to the market creating some downward pressure on inflation. 2) HOLY SHIT BATMAN we're OUT OF RESOURCES! WTF DO WE DO?!?!?! Well, this will lead to hyperinflation because there will be less stuff and same amount of money (sort of like what you see happening with agri commodities on fears that they will be more difficult to cultivate in the future). 3) Everything goes on exactly like it is going on now. We'll have below-trend growth, Bubble Boy will run out of debt to monetize (effectively neutering teh printing prezz), we'll have another financial collapse because banks are still insolvent (YAY! Please gimme gimme gimme!) and prices go waaaaaay down cos well, can't print moar. Like when trading, always assume that when something behaves exactly the same like it behaved last time the future behaviour will be more or less the same until proven wrong. So 3 is the most likely outcome. As soon as you people start to figure out the obvious truth here I'll be shorting gold all the way down to $300. Capiche?
Yes that's right, but the relative value of things can get SEVERELY distorted in a supply-constrained hyperinflation (like I outlined in my previous post there are no supply constraints). Anyway, it wouldn't be unthinkable that one may trade a house for a car because it may be the only way to get access to a vehicle (if you have nothing else of high value), thus if the relative value of the house (maybe a holiday getaway) becomes lesser than something of clearly smaller economic value (a normal car), then you may transact even though in money terms it would be stupid. And this is why gold will not make you rich but owning shit people will really need but can't easily trade for (so excludes everything cheap and/or useless such as food, jewelry or anything like that because nobody is gonna be desperate for that) like cars or perhaps appliances and stuff like that may increase your relative wealth. Gold will do nothing more than protect your wealth, won't do much to make you poart of the fat cats. By the way it's also exactly why we won't have hyperinflation. It's almost impossible to have a situation now where a house would be traded for a car because there are a lot of houses and a lot of cars and basically nearly everybody has both.
So you think you made a smart comment because central banks have a history of not selling at the bottom (or very low anyways) and not buying at the top? Central banks are always in the market buying and selling. It's not like they've just started. You know a lot of central banks sold a bunch of gold a while ago and thought they were getting a pretty sweet deal. If I were BRIC central banks I'd be rushing towards gold too because I am not arguing deflation in those countries AT ALL.
The funniest thing of all is when your brick of gold turns out to be a brick of gold plated tungsten!