The FED Has Doubled the Number Of Dollars In ONE YEAR.....

Discussion in 'Economics' started by libertad, Jul 24, 2009.

  1. yeah about 4.20 he says it. my math is better than politicians and that means 100% inflation and that assumes output is maintained.

    it is just a matter of time before the prices start to reflect that surplus and the increase occurs. built in inflation that i estimate will hit in six to eighteen months. what is your estimation.
     
  2. the1

    the1

    All you gotta do it look at the momo stocks on the nasdaq to see inflation getting ready to crank up. It looks as though we're going to see another tech bubble because of the massive dollar output. If that happens inflation will surely follow. What's funny is the Fed has absolutely no intentions of raising rates any time soon. It's full throttle ahead.
     
  3. it concerns me that they are not going to raise the rate because it does not provide an incentive to save. effectively the natural investment model in the free market does not exist when the fiscal policy runs out the economy will slip back into recession. my guess is it will pick up a bit then collapse. thank you for the post i will look up the momo.
     
  4. ........................................................................................

    There are a lot of people ....such as Rogers and others who feel certain that the FED will act late in the day...and not be able to gather back what they have fabricated....

    This particular commentary is subject to some questioning ....

    Such as....

    If the combined world economy was $70 Trillion....

    And over $30 Trillion and climbing was removed....and is not going to be replaced....

    Then a 100% increase would be applied to $40 Trillion in terms of a total addition....

    So during the experience of moving to 40/70's....this is clearly deflation in the big ticket credit driven assets....

    In an experience of moving back to 70/70....one is moving back to where one was....

    Since the total economy includes all credit ....moving back to a less levered credit market....would still be at a point less than 70/70....

    Also if the currency was increased by 100%....and this amount was not made available in the form of the previous leverage....to be inflationary the ratio would have to be greater than 70/70.....

    The catch22 being the increase in unsustainable and untenable debt....This could negate the entire effort...And actually create even more losses ....ie the total economy would drop < 40.....

    And without re-creating a new US manufacturing base....the US has to change its tax structure such that it can undercut BRIC....

    Undercutting BRIC should be the number ONE concern....

    At the moment ....it is not a concern....and thus moving towards < 40 is more likely....

    Which means unemployment >25%....even higher for younger workers....the list goes on....

    There are solutions....but they are currently not in consideration....

    This is because of a very poor political system....
     
  5. good point.

    however that doesn't account for a loss of output. or corporate restructuring which may create a increase in prices. also my concern is the labour force too. are the people in the west prepared to work like they used to. most western countries are importers so depend on the strength of currency. if that declines and they have to export will the domestic workforce be willing to produce rather than consume. or will people just accept a lesser lifestyle for more work. people have become lazy.

    the social situation has changed too not just the economic situation. to me this is one of the biggest problems if recovery is to occur.
     
  6. .................................................................................................

    Getting close....

    The catch22 being the increase in unsustainable and untenable debt....This could negate the entire effort...And actually create even more losses ....ie the total economy would drop < 40.....

    The US has to "not a choice" re-create a new US manufacturing base....the US has to change its tax structure such that it can undercut BRIC....

    Undercutting BRIC should be the number ONE concern....

    At the moment ....it is not a concern....and thus moving towards < 40 is more likely....

    Which means unemployment >25%....even higher for younger workers....the list goes on....

    There are solutions....but they are currently not in consideration....

    This is because of a very poorly constructed political system....
    ...........................................

    China...will be cost averaging the best assets in the world going into 2012....playing the house in the "fiat to fiat" game....
     
  7. Sprott's main investment theme going into this 2009 depression besides precious metals basically was shorting the markets.

    After which global markets set their biggest rally in a century.

    Not to disrespect him it just strikes me how people can know what's going on yet fail to cash in on it.

    One last remark: The person in this video quotes Marc Faber who aledgedly said: "If you give banks free money no wonder they will do better".


    This is correct and in one of his latest CNBC interviews Faber even said he thought the global financial system was on it's way out of the intensive care and the odds of making money in a few years on buying the likes of C at 3$ a share here were quite favourable if not because of inflation driving up stockmarkets alone.

    http://www.youtube.com/watch?v=vYU4WgpFYIY&feature=channel_page

    I thought it to be interesting because he, although known for being a bear, does seems to have the mental flexibility to 'buy the banks' or ' buy the doomed $' regardless of previous sentiments.

    Cheers.
     
  8. ...........................................................................................

    1000% Correct....!!!!!!!!!!

    Must be looked at as a real trade....

    When wrong....

    The usual is....."I'm long term".....Am averaging into it....etc....
     
  9. Doesn't matter if he's just replacing velocity with supply.

    (I mean it matters to me, since I am an owner of $ and am having my buying power diluted relative to no monsy supply increase, but to the economy it doesn't matter).

    The trick is getting the supply back out one velicity picks up.

    I don't think they'll manage that part well.
     
    #10     Jul 24, 2009