INFLATIONISTS vs. DEFLATIONISTS -- a compendium in progress

[ninakat]

this one's for you, graveday 

U.K. Economy Faces ‘Grave Stage’ on Deflation Risk, Bootle Says
By Scott Hamilton

Feb. 23 (Bloomberg) -- The U.K. economy is entering a “very grave stage” and the Bank of England should expand its 200 billion-pound ($310 billion) bond-buying plan to fight the threat of a relapse, former Treasury adviser Roger Bootle said.

“A second dip is a real possibility and deflation is a live risk,” Bootle, the founder of research group Capital Economics Ltd., said at an event in London yesterday. “We’re entering a very grave stage” and “moving into next year, it’s going to be a very dangerous situation.”

Bank of England Governor Mervyn King, who will today testify to lawmakers on the bank’s economic forecasts, said this month that it’s “far too soon” to say the bond plan won’t be expanded. Policy makers are trying to gauge the strength of the recovery as inflation accelerates and rising jobless claims cloud the outlook months before the election.

“Once we’ve got over this technically-caused rise in inflation, I think we’ll see inflation fall like a stone,” Bootle said, speaking at a debate hosted by Policy Exchange, a political research group. “The bank should not only announce it’s going to do more quantitative easing, but more importantly, it should make it perfectly clear to people that its capacity for doing more, while not unlimited, is absolutely vast.”

Bank of England officials earlier this month voted to pause the bond-buying program, arguing that inflation will return to the 2 percent target and is likely to undershoot it over the next three years. The rate rose to 3.5 percent in January, pushed higher by an increase in sales tax, oil costs and the weakness of the pound.

(more)

[ninakat]

Over-Arching Sovereign Debt Crisis
by Jim Willie, CB. Editor, Hat Trick Letter | February 23, 2010

(...)

The beginning of a rally in Gold in all currencies seems underway, a movement kicked off by the European debt problems. The Gold breakout in Euro terms is possibly soon to be joined by breakouts of Gold in British Pounds, Gold in Japanese Yen, and Gold in Swiss Francs, with the Gold breakout in USDollars last. When the surge is universal, Gold will be perceived as a currency in full direct competition with the tainted fiat paper currencies! The critical lack of gold bullion in the London metals exchange sets the stage for numerous events shrouded in breakdown, and a broadly rising Gold price. Do not be fooled by a correction in the Gold price in US$ terms. It is rising across foreign currencies, in an environment of extreme gold bullion shortage. The end of the Q1 gold price correction is near. Many investors sense nothing happening in the gold arena. Not true! The entire foundational structures for the fiat monetary system are crumbling under the financial market floors. The support pillars are fragile and weak if not vanished and missing. The Powerz keep the game going mainly to perpetuate their trillion$ frauds further. Reform and remedy is not their plan. The objective is theft and pillage to the end.

(...)

The alternative for governments, within the crumbling European Union and the deteriorating United States, is to print or borrow more money. Against a backdrop of rising deficits, rising unemployment, and persistently insolvent banking systems, they have no choice. The end game will be paved by hyper-inflation, worse than even what is seen today. Von Greyerz wrote, "Both the UK and the US are set upon a course of self-destruction. We will see trillions of pounds and dollars printed in the next few years. But the only buyers of these government securities will be the US and UK governments. The rest of the world will dump their holdings which will result in both the dollar and the pound dropping precipitously and interest rates rising substantially.. The effect of a collapsing currency will be a hyper-inflationary depression. This is the inevitable outcome for the UK and US, and there is sadly no action that the governments of these countries can take to alter this course."

[graveday]

I love presents, but I hope you left the tag inside.

[ninakat]

Hyperinflation Watch
by James Turk
 
February 24, 2010 – The US Treasury has taken another step on the road leading to hyperinflation.  It announced that it will borrow $200 billion and leave this money on deposit with the Federal Reserve.  The announcement was made with bald disinformation aimed at camouflaging the true impact of this step.

The Wall Street Journal dutifully reported that taking this step “will make it easier for the Fed to raise interest rates when the time comes.”  This red herring is obviously intended to make the Treasury’s overt dollar debasement appear reasonable.  The WSJ statement itself is nonsensical.  How can raising interest rates be made “easier” than it already is?  All the Fed needs to do is pull the trigger and interest rates go up.

The Fed of course is lacking the will to do that.  It may also be lacking the insight that the system is broken, but I doubt that point.  The Fed must know the system is broken, but because it is a captive of vested interests who benefit enormously from the situation at present (anyone mention banker bonuses recently?), it works solely to keep the system from falling apart.

Therefore, more gimmicks and more disinformation are the order of the day, like this latest Treasury announcement, which was no doubt cooked up by the Fed.  You see, the Fed has a problem.  The federal government is borrowing too much.  When it borrows, the federal government is soaking up savings.  These savings come from throughout the world because of the dollar’s reserve currency role.  But if people with savings choose not to lend to the federal government because they recognize it is in basically the same situation as Greece and every other over-indebted country, the Fed must step in.  It always has and always will.
 
As I have mentioned before, the Fed is not there to fight inflation or encourage full employment or any of the other laudable reasons given for its existence.  The true and unmentioned reason is that the Fed has one mission.  It is to make sure that the federal government obtains all the dollars it wants to spend.  If the federal government cannot attract these dollars from the world’s savings pool, then there is only one other way to obtain them.  The Fed must print them.

The WSJ article has this point backwards too, making clear its disinformation aim.  “The Treasury program makes it possible for the Fed to avoid printing more money, a step that could lead to inflation, at it develops exit strategies from its interventions.”  In reality, the Fed is actually ‘printing’ money.  It is not the cash-currency we carry around in our pockets, but it is creating deposit-currency that circulates through the banking system where payments are made in commerce with checks, wire transfers, plastic cards and the like.

So the Fed is fanning inflation by creating more dollar currency, and easy money always leads to inflation.  The US is now so far down the inflation road, having travelled it for decades, that it is hurtling pedal-to-the-metal toward hyperinflation

[DoomandGloom]

Hyperinflation Watch
by James Turk
 
February 24, 2010 – The US Treasury has taken another step on the road leading to hyperinflation.  It announced that it will borrow $200 billion and leave this money on deposit with the Federal Reserve.  The announcement was made with bald disinformation aimed at camouflaging the true impact of this step.

The Wall Street Journal dutifully reported that taking this step “will make it easier for the Fed to raise interest rates when the time comes.”  This red herring is obviously intended to make the Treasury’s overt dollar debasement appear reasonable.  The WSJ statement itself is nonsensical.  How can raising interest rates be made “easier” than it already is?  All the Fed needs to do is pull the trigger and interest rates go up.

The Fed of course is lacking the will to do that.  It may also be lacking the insight that the system is broken, but I doubt that point.  The Fed must know the system is broken, but because it is a captive of vested interests who benefit enormously from the situation at present (anyone mention banker bonuses recently?), it works solely to keep the system from falling apart.

Therefore, more gimmicks and more disinformation are the order of the day, like this latest Treasury announcement, which was no doubt cooked up by the Fed.  You see, the Fed has a problem.  The federal government is borrowing too much.  When it borrows, the federal government is soaking up savings.  These savings come from throughout the world because of the dollar’s reserve currency role.  But if people with savings choose not to lend to the federal government because they recognize it is in basically the same situation as Greece and every other over-indebted country, the Fed must step in.  It always has and always will.
 
As I have mentioned before, the Fed is not there to fight inflation or encourage full employment or any of the other laudable reasons given for its existence.  The true and unmentioned reason is that the Fed has one mission.  It is to make sure that the federal government obtains all the dollars it wants to spend.  If the federal government cannot attract these dollars from the world’s savings pool, then there is only one other way to obtain them.  The Fed must print them.

The WSJ article has this point backwards too, making clear its disinformation aim.  “The Treasury program makes it possible for the Fed to avoid printing more money, a step that could lead to inflation, at it develops exit strategies from its interventions.”  In reality, the Fed is actually ‘printing’ money.  It is not the cash-currency we carry around in our pockets, but it is creating deposit-currency that circulates through the banking system where payments are made in commerce with checks, wire transfers, plastic cards and the like.

So the Fed is fanning inflation by creating more dollar currency, and easy money always leads to inflation.  The US is now so far down the inflation road, having travelled it for decades, that it is hurtling pedal-to-the-metal toward hyperinflation

Please explain:

Bernanke delivers blunt warning on U.S. debt

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

http://washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/?feat=home_top5_read

[d00gie]

Please explain:

Bernanke delivers blunt warning on U.S. debt

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

http://washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/?feat=home_top5_read

Explanation:  Bernanke is a liar and a criminal.

The debt is already being monetized like crazy, and that is PRECISELY what he intends to continue to do.

[graveday]

So the Fed is fanning inflation

Have you ever read "To Start A Fire," by Jack London?

[d00gie]

So the Fed is fanning inflation

Have you ever read "To Start A Fire," by Jack London?

The analogy breaks down due to the season.  Our protagonist is not caught  in the snow with bitch-bark and matches -- he's standing in the middle of 96 years' (and a quadrillion FRNs "notional" ) worth of dry tinder.  With a flame thrower.

[d00gie]

bitch-bark and matches

Oops.  I guess the dog in the story is female...

[graveday]

That was a Chupracabra named Caleb. 

[ninakat]

Inflation/deflation debate should be "globalized"
by Seahorse

[ninakat]

<a href="http://www.youtube.com/v/3bKpdQ4qjCs&amp;ap=%2526fmt%3D18&amp;rel=0" target="_blank">http://www.youtube.com/v/3bKpdQ4qjCs&amp;ap=%2526fmt%3D18&amp;rel=0</a>