I now agree with Legion that we'll ULTIMATELY see deflation

[AGStacker]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

[davedan]

1. More people unemployed and under-employed.
2. Salaries are down
3. Jobs are shipped overseas
3. Interest rates going up
(decreases money supply, more money to banks)
4. Individuals saving more and investing less
5. Velocity of money down
6. True GDP down
7. Stock market is a fraud and not real economy
8. US government cutting back (austerity)

= Deflation

M (Money Supply) . V (Velocity) = P (Price) . G (GDP)
Down for individuals----- Down-----Deflation---Down for Real Economy

1. You can only get inflation if US government starts giving individual citizens increasing piles of cash
2. So far only the banks and coorporate are getting money.
3. Coorporate getting free money and buying their own stock,
4. Stock goes up, CEO cashes out stock options.
5. QE money doesnt go into the real economy. Money goes into CEO pocket. Dow looks good.

= Sterilization

[SkyBird]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

Your optimistic... "next few years" no, no....the next few months!

[Original_Intent]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

[AGStacker]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

Your optimistic... "next few years" no, no....the next few months!

They are starting now but will continue throughout the next few years. IMO

[AGStacker]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

I would have agreed with you until the last few weeks.

I think we'll be praying for hyperinflation. You really should look at Martin Armstrong's blog. I've know about him for some time but his thinking didn't align with mine and naturally thought he was incorrect. Well, he, or his computer model, is fairly accurate. He says we look at things linear. Print money, gold goes up. Well that isn't always the case. In the 80s when gold declined significantly our debt increased 50-100%.

History really, really repeats itself rather accurately. Maybe that is why the Book of Mormon can be so relevant to us today. No empire has ever hyper inflated but rather always goes into a deflationary death spiral. Hyperinflation you maintain your freedoms. Deflation the government comes for you and everything you have. Martin believes that gold and silver will increase significantly but says the nail in the coffin will ultimately be the dollar rising significantly.

Check his blog out. It is worth the time. If you didn't know anything about him, he was held in confinement for years and eventually sentence to prison for defying what he calls the Untouchables, the New York bankers.

From Wicki:

Martin Arthur Armstrong (born November 1, 1949 in New Jersey) is the former chairman of Princeton Economics International Ltd. He is best known for his economic predictions based on the Economic Confidence Model, which he developed.

In September 1999, Armstrong faced prosecution by the Securities and Exchange Commission and the Commodity Futures Trading Commission for fraud. During the trial, Armstrong was imprisoned for over seven years for civil contempt of court, one of the longest-running cases of civil contempt in American legal history. In August 2006, Armstrong pleaded guilty to one count of conspiracy to commit fraud, and began a five-year sentence.

Economic Confidence Model:

The Economic Confidence Model is an economic cycle theory by Martin A. Armstrong. Armstrong proposes that economic waves occur every 8.6 years, or 3141 days, which is Pi X 1000. At the end of each cycle is a crisis after which the economic climate improves until the next 8.6 year crisis point. The model has been profiled in The New Yorker,[1] Time magazine,[2] Financial Times[3] and Barrons[4] due to what appeared to be accurate predictions.
History

Armstrong's theory was first applied in 1977, when he used it to successfully predict an upturn in the price of commodities. The theory is based on a list of historical financial panics, producing a frequency of 8.6 years. Armstrong concluded that a wave of 8.6 years moved through larger waves building in intensity amounting to six waves of 8.6 years constructing a major long wave of 51.6 years.

Armstrong's cycle was called the "secret cycle" by the New Yorker. In Time magazine, Justin Fox wrote that Armstrong's model "made several eerily on-the-mark calls using a formula based on the mathematical constant pi." Barron's noted the model called for a change in sentiment in June 2011.

Armstrong's forecast was covered by the London Financial Times on June 27, 1998 where Barry Riley wrote on the front Page 2nd Section: "Martin Armstrong, at Princeton Economics, warns that an imminent Russian economic collapse is a bigger threat to the rest of Europe than the Asian slump."

[deep water]

E.T.B. wrote That the debasing of ones currency, is the most immoral act a government could perpetrate upon its people. That it is a tax; a hidden tax, that tax's those who can least afford it.

[Jason]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

Funny post...you claim to agree then immediately go off about everything that you don't agree...despite Ron Paul being a Bilderberg chump (as well as a banker puppet...and a liar amongst other things). But yeah he certainly had our interests in mind as he went laughing all the way to the bank....with our money (not that we had much to give). Just check out his banker buddy Lewis Lehrman's stance on 9/11....the man's a sith lord.

Gold and silver will become worthless....well relative to food that is
The Fed can stop the rise of interest rates any time they want to (they control the printing press remember)
The Fed probably will stop QE
Home prices are dependent upon low interest rates (rates go up then the bank takes a bigger slice of the pie...and all else being equal means the face value or purchase price must go down)
Inflation certainly isn't going to raise its head in a world of rising interest rates and high debt service
Commodities also aren't going to rise in a world of rising interest rates and high debt service

You still haven't gotten the basic economics equations figured out. Have you seen the price of silver lately?

[Jason]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

Depends on who you think the money creator is??? If its you taking out some more debt...you don't have the capability of adding zeros. You can default though and lose your assets in the process.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

Nah. What it means is transfer of ownership of assets i.e. the bank takes ownership since you can no longer afford the debt (not enough dollars to go around - i.e. 2008 monetary crisis that hasn't ended).

Insidious plot it is. Fascinating and powerful tool as well.

Eventually the banks - i.e. the bank of banks - i.e. the private shareholders of the bank of banks...end up owning everything.

Of course at that point people tend to be a nuisance (vastly outnumbered should they get riled up as well as the whole possession is 9/10ths of the law...etc etc etc) and then they may just decide they want their private Idaho's with perhaps a small servantile population (Georgia guidestones???). Anyways that transition point should be very very interesting...of course God is in charge though and can rock their apple cart any time He feels like it....as well as our apple carts.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

Sure seems to be a lot of anticipation of rising interest rates right now in the business world...

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

Problem with Option 1 is that someone has to borrow the money into existence. Appetite usually runs out when you hit the saturation point. Of course they bypassed the public for the most part and pushed the debt through the government after the 2008 saturation point....but even the appetite there seems to be waning lately...

Not to mention that inflation and hyperinflation are extremely good to debtors....and the prophets have been warning us over and over about debt for decades. I tend to think they will be right (they always are) and that a day of reckoning is coming (transfer of assets). Could be wrong though....just my opinion fwiw...

If the price of silver is a measuring point....not looking so good at over 30% loss since the beginning of the year (dollar buys a whole lot more silver today than it did January 1st).

[Bee Prepared]

In normal (mildly inflationary) circumstances, this adjustment takes place because the price of the things that need to become relatively more expensive goes up while the price of the other things remains relatively steady. In a situation of extremely low (or negative) inflation, the adjustment must take place by having the price of the less desired thing decline - which involves a much more disruptive adjustment process.

[Original_Intent]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

Depends on who you think the money creator is??? If its you taking out some more debt...you don't have the capability of adding zeros. You can default though and lose your assets in the process.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

Nah. What it means is transfer of ownership of assets i.e. the bank takes ownership since you can no longer afford the debt (not enough dollars to go around - i.e. 2008 monetary crisis that hasn't ended).

Insidious plot it is. Fascinating and powerful tool as well.

Eventually the banks - i.e. the bank of banks - i.e. the private shareholders of the bank of banks...end up owning everything.

Of course at that point people tend to be a nuisance (vastly outnumbered should they get riled up as well as the whole possession is 9/10ths of the law...etc etc etc) and then they may just decide they want their private Idaho's with perhaps a small servantile population (Georgia guidestones???). Anyways that transition point should be very very interesting...of course God is in charge though and can rock their apple cart any time He feels like it....as well as our apple carts.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

Sure seems to be a lot of anticipation of rising interest rates right now in the business world...

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

Problem with Option 1 is that someone has to borrow the money into existence. Appetite usually runs out when you hit the saturation point. Of course they bypassed the public for the most part and pushed the debt through the government after the 2008 saturation point....but even the appetite there seems to be waning lately...

Not to mention that inflation and hyperinflation are extremely good to debtors....and the prophets have been warning us over and over about debt for decades. I tend to think they will be right (they always are) and that a day of reckoning is coming (transfer of assets). Could be wrong though....just my opinion fwiw...

If the price of silver is a measuring point....not looking so good at over 30% loss since the beginning of the year (dollar buys a whole lot more silver today than it did January 1st).

Well, sure, arguments can be made pretty much for either side if you chose your starting and end points. I'd say a more legitimate timeframe is going back to full backing and compare dollars to gold or silver since. Silver quarter in 1964 cost 25 cents - the silver content has never been valued below that and currently it is around 8 or 9 times face value (for junk, non numismatic coins).

There is no way around the fact that the dollar has lost roughly 90% of it's purchasing power since our coins were debased to essentially zero metal value. The argument could be made that it is worse than that, housing is a lot more than 10x the price of the early 60's - but again, huge manipulation there but certainly 8 or 9 times increase on the cost of everything in the last 50 years I think is a conservative estimate.

When silver goes under a dollar an ounce, call me.

[Jason]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

Depends on who you think the money creator is??? If its you taking out some more debt...you don't have the capability of adding zeros. You can default though and lose your assets in the process.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

Nah. What it means is transfer of ownership of assets i.e. the bank takes ownership since you can no longer afford the debt (not enough dollars to go around - i.e. 2008 monetary crisis that hasn't ended).

Insidious plot it is. Fascinating and powerful tool as well.

Eventually the banks - i.e. the bank of banks - i.e. the private shareholders of the bank of banks...end up owning everything.

Of course at that point people tend to be a nuisance (vastly outnumbered should they get riled up as well as the whole possession is 9/10ths of the law...etc etc etc) and then they may just decide they want their private Idaho's with perhaps a small servantile population (Georgia guidestones???). Anyways that transition point should be very very interesting...of course God is in charge though and can rock their apple cart any time He feels like it....as well as our apple carts.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

Sure seems to be a lot of anticipation of rising interest rates right now in the business world...

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

Problem with Option 1 is that someone has to borrow the money into existence. Appetite usually runs out when you hit the saturation point. Of course they bypassed the public for the most part and pushed the debt through the government after the 2008 saturation point....but even the appetite there seems to be waning lately...

Not to mention that inflation and hyperinflation are extremely good to debtors....and the prophets have been warning us over and over about debt for decades. I tend to think they will be right (they always are) and that a day of reckoning is coming (transfer of assets). Could be wrong though....just my opinion fwiw...

If the price of silver is a measuring point....not looking so good at over 30% loss since the beginning of the year (dollar buys a whole lot more silver today than it did January 1st).

Well, sure, arguments can be made pretty much for either side if you chose your starting and end points. I'd say a more legitimate timeframe is going back to full backing and compare dollars to gold or silver since. Silver quarter in 1964 cost 25 cents - the silver content has never been valued below that and currently it is around 8 or 9 times face value (for junk, non numismatic coins).

There is no way around the fact that the dollar has lost roughly 90% of it's purchasing power since our coins were debased to essentially zero metal value. The argument could be made that it is worse than that, housing is a lot more than 10x the price of the early 60's - but again, huge manipulation there but certainly 8 or 9 times increase on the cost of everything in the last 50 years I think is a conservative estimate.

When silver goes under a dollar an ounce, call me.

Yeah the curve is pretty well correlated to the increase in debt. The loss in dollar value due to the influx of dollars from debt. Of course first by inflation and then by deflation....until we are all homeless (transfer of assets). Gee that guy was smart...

Make sure you calculate the entire cost of the house when you do the comparison (principle and interest)....

Another perspective on it...
http://dollardeathspiral.blogspot.com/2 ... ssion.html" onclick="window.open(this.href);return false;

aw shucks...
http://jessescrossroadscafe.blogspot.co ... ll-to.html" onclick="window.open(this.href);return false;

more shucks...

Specifically, are rising interest rates a sign of systemic health or an arrow aimed at the heart of an overleveraged society? A few things to look for: recalculations of the deficit in light of spiking interest costs, comparisons of US and Japanese yields and speculation about what this means for Japanese rates — followed by dire analyses of Japan’s future borrowing costs — and last but not least, a growing concern for the hundreds of trillions of dollars of interest rate derivatives that now have one counterparty deeply in the red.

http://dollarcollapse.com/interest-rate ... ike-again/" onclick="window.open(this.href);return false;

When silver goes under a dollar....I will likely have more pressing matters...like where my next meal is going to come from...

...and just a few more tidbits in parting...

America is almost $17 trillion in debt. Interest rates rising just a few ticks closer to their long-term, normalized levels, would be an insurmountable strain on future budgets.
http://marketshadows.com/2013/07/04/say ... n-is-dead/" onclick="window.open(this.href);return false;

Oil prices at 2013 high above $103 a barrel
http://money.cnn.com/2013/07/05/investi ... index.html" onclick="window.open(this.href);return false;

US M3 is relatively steady at just over $15.1 trillion, following the disinflationary trend of the past few months. Although US M1 and M2 continue to grow, and the Fed has still not relented from its open-ended monthly bond-buying programme, M3 growth has clearly stalled. Together with the slowdown in US industrial production and weak jobs market, and it seems to point to an economic downturn. If we take recent weakness in emerging markets as a leading indicator, it seems that the second part of the much-touted double-dip is just around the corner.
http://chasvoice.wordpress.com/2013/07/ ... the-storm/" onclick="window.open(this.href);return false;

China admits local govt debt levels unknown, could be higher than estimated ... A senior Chinese official said on Friday that the government did not know precisely know how much debt local governments had built up and warned that it could be more than previous estimates. Estimates of local government debt range from Standard Chartered's 15 percent of the country's GDP at end-2012 to Credit Suisse's 36 percent. Fitch put the figure at 25 percent when it downgraded China's sovereign debt rating in April. Vice Finance Minister Zhu Guangyao said China had not released official figures since a 2010 auditing report that put local government debt at 10.7 trillion yuan. – Reuters
http://www.thedailybell.com/29352/Now-T ... ls-Unknown" onclick="window.open(this.href);return false;

In 1994, the Federal Reserve set about raising Treasury yields from unusually low levels. As the economy was strengthening, the Fed saw fit to raise short-term rates from 3% to 3.25%. Thirty-year Treasury bonds were yielding 6.2% in January. By the end of the summer, the Fed had pushed yields up to 7.5%. In the process, hundreds of billions of dollars in Treasury bond value evaporated. As short-term yields increased, leveraged bondholders were forced to unload bonds to mitigate escalating losses on 30-year bonds. Prices dropped, yields climbed and money was lost.

Could it happen again?
http://www.marketwatch.com/story/the-gr ... eid=yhoof2" onclick="window.open(this.href);return false;

[AGStacker]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

Funny post...you claim to agree then immediately go off about everything that you don't agree...despite Ron Paul being a Bilderberg chump (as well as a banker puppet...and a liar amongst other things). But yeah he certainly had our interests in mind as he went laughing all the way to the bank....with our money (not that we had much to give). Just check out his banker buddy Lewis Lehrman's stance on 9/11....the man's a sith lord.

Gold and silver will become worthless....well relative to food that is
The Fed can stop the rise of interest rates any time they want to (they control the printing press remember)
The Fed probably will stop QE
Home prices are dependent upon low interest rates (rates go up then the bank takes a bigger slice of the pie...and all else being equal means the face value or purchase price must go down)
Inflation certainly isn't going to raise its head in a world of rising interest rates and high debt service
Commodities also aren't going to rise in a world of rising interest rates and high debt service

You still haven't gotten the basic economics equations figured out. Have you seen the price of silver lately?

Did I claim to agree with EVERYTHING you said? Nope. You just read what you want to Legion. The Fed will not be able to stop the coming rise in interest rates. Gold and silver will recover and rise along with the dollar. Homes will continue to rise because people will be rushing to buy to avoid higher interest rates. The Fed will stop QE. Inflation will rise along with commodities. I simply agree with you that what we ultimately face is a black hole of deflation. Nothing more.

[samizdat]

I still think it will be deflation short term, and eventual hyperinflation.

The deflation argument that Legion makes only tells half of the story.

According to Legion, in a debt money system, deflation is inevitable due to always less money in the system than is owed back to the money creator. I agree, that is the problem.

However, this leaves the money creator with only two ultimate choices;

1) Print money, start adding zeroes until we have 100 trillion dollar notes that won't buy a loaf of bread
2) default on the debt.

First choice results in hyperinflation. Choice 2 you will see deflation leading up to the ultimate default, but going with choice 2 means the end of the dollar - not just as the world's reserve currency, but as a currency, period.

I simply do not see TPTB ever taking option 2. That doesn't mean they won't, the truth is because they have foreknowledge of which path they are going to take, they can profit, and profit big in either scenario.

If the Fed actually allows QE to end, that will be an indication that they actually may go with option 2. I believe that the announcement that QE is going to end next year is a head fake, and believe the chance that they will actually follow through to be almost nil. Almost.

And if a "crisis" comes up and they are "forced by circumstances" to continue or expand QE, then that is supporting the first option. Even if the money does not show up in the real economy, eventually it will. And when that happens, you will see a 20,000 DOW, and boobus americanus will briefly think that means that everything is OK.

I would have agreed with you until the last few weeks.

I think we'll be praying for hyperinflation. You really should look at Martin Armstrong's blog. I've know about him for some time but his thinking didn't align with mine and naturally thought he was incorrect. Well, he, or his computer model, is fairly accurate. He says we look at things linear. Print money, gold goes up. Well that isn't always the case. In the 80s when gold declined significantly our debt increased 50-100%.

History really, really repeats itself rather accurately. Maybe that is why the Book of Mormon can be so relevant to us today. No empire has ever hyper inflated but rather always goes into a deflationary death spiral. Hyperinflation you maintain your freedoms. Deflation the government comes for you and everything you have. Martin believes that gold and silver will increase significantly but says the nail in the coffin will ultimately be the dollar rising significantly.

Check his blog out. It is worth the time. If you didn't know anything about him, he was held in confinement for years and eventually sentence to prison for defying what he calls the Untouchables, the New York bankers.

From Wicki:

Martin Arthur Armstrong (born November 1, 1949 in New Jersey) is the former chairman of Princeton Economics International Ltd. He is best known for his economic predictions based on the Economic Confidence Model, which he developed.

In September 1999, Armstrong faced prosecution by the Securities and Exchange Commission and the Commodity Futures Trading Commission for fraud. During the trial, Armstrong was imprisoned for over seven years for civil contempt of court, one of the longest-running cases of civil contempt in American legal history. In August 2006, Armstrong pleaded guilty to one count of conspiracy to commit fraud, and began a five-year sentence.

Economic Confidence Model:

The Economic Confidence Model is an economic cycle theory by Martin A. Armstrong. Armstrong proposes that economic waves occur every 8.6 years, or 3141 days, which is Pi X 1000. At the end of each cycle is a crisis after which the economic climate improves until the next 8.6 year crisis point. The model has been profiled in The New Yorker,[1] Time magazine,[2] Financial Times[3] and Barrons[4] due to what appeared to be accurate predictions.
History

Armstrong's theory was first applied in 1977, when he used it to successfully predict an upturn in the price of commodities. The theory is based on a list of historical financial panics, producing a frequency of 8.6 years. Armstrong concluded that a wave of 8.6 years moved through larger waves building in intensity amounting to six waves of 8.6 years constructing a major long wave of 51.6 years.

Armstrong's cycle was called the "secret cycle" by the New Yorker. In Time magazine, Justin Fox wrote that Armstrong's model "made several eerily on-the-mark calls using a formula based on the mathematical constant pi." Barron's noted the model called for a change in sentiment in June 2011.

Armstrong's forecast was covered by the London Financial Times on June 27, 1998 where Barry Riley wrote on the front Page 2nd Section: "Martin Armstrong, at Princeton Economics, warns that an imminent Russian economic collapse is a bigger threat to the rest of Europe than the Asian slump."

I have been reading a lot of what Martin Armstrong has been saying for quite a while. I love him because he is looking at the economy through a pure economic lens and also goes through history and how everything is repeating itself. I wasn't able to make the comparison of the West as Babylon until I read through his documents.

The next break point is borderline September October 2015, and the collapse will be global in nature. Correction downward next month, back upward in September 2014 to set the stage for collapse October 2015.

Even more interesting, he predicts a lot of volatility for the next slides in April 2024 and December 2032. After December 2032 he says that a Republican cycle will be over with and men will either rise up to new understanding or be destroyed...

[ajax]

So ever increasing prices are good for me and my family......?

Apoplithorismosphobia?

Google "Jorg Guido Hulsmann deflation"

[Jason]

That is all but I continue to contend, despite disagreeing with Ron Paul now about hyperinflation, that Ron Paul was an upstanding politician and had the citizens whom he served best interests at mind. Now man can be correct 100% of the time despite actually caring for others.

1) I still believe that gold and silver, despite being slaughtered, will rise and hit new all-time, adjusted for inflation highs
2) Interest rates, that have started to rise, will continue to rise and the Fed won't be able to do anything about it
3) The Fed will stop QE
4) Homes prices will rise
5) Inflation will rear its head
6) Commodities will rise

I believe these things will happen within the next few years practically simultaneously and then the great deflation occurs.

Funny post...you claim to agree then immediately go off about everything that you don't agree...despite Ron Paul being a Bilderberg chump (as well as a banker puppet...and a liar amongst other things). But yeah he certainly had our interests in mind as he went laughing all the way to the bank....with our money (not that we had much to give). Just check out his banker buddy Lewis Lehrman's stance on 9/11....the man's a sith lord.

Gold and silver will become worthless....well relative to food that is
The Fed can stop the rise of interest rates any time they want to (they control the printing press remember)
The Fed probably will stop QE
Home prices are dependent upon low interest rates (rates go up then the bank takes a bigger slice of the pie...and all else being equal means the face value or purchase price must go down)
Inflation certainly isn't going to raise its head in a world of rising interest rates and high debt service
Commodities also aren't going to rise in a world of rising interest rates and high debt service

You still haven't gotten the basic economics equations figured out. Have you seen the price of silver lately?

Did I claim to agree with EVERYTHING you said? Nope. You just read what you want to Legion. The Fed will not be able to stop the coming rise in interest rates. Gold and silver will recover and rise along with the dollar. Homes will continue to rise because people will be rushing to buy to avoid higher interest rates. The Fed will stop QE. Inflation will rise along with commodities. I simply agree with you that what we ultimately face is a black hole of deflation. Nothing more.

I reckon everyone has there own perspectives. Obviously you have't seen the data on mortgage applications and interest rates....

Care to make any bets on your perspective? Timeline?

[Jason]

more of the same...note the split between energy (oil) and PMs (silver/gold)...

[Hogmeister]

What do you think of US and international banks placing trillions in excess deposits (in USD) at the FED instead (no shortage) of greasing the credit wheels of the economy?

The current deflationary phase with salaries taking a nose dive and unemployment and welfare programs exploding while printing dollars like its going out of style is all calculated to destroy the real economy and fool/subdue the world (for a time) while doing it and it is all planned. Banks have literally trillions stashed at the FED that could be multiplied into the economy generating business as we speak. The Norwegian bank I work for (senior auditor) even have billions (USD) at the FED which is unprecedented. But this machination (using the words of a prophet) will utimately lead to the intended (or unintended) loss of confidence in the US real economy and as a result the USD. An economy that can no longer produce real goods will not have a strong currency no matter which way you twist your arguments. True the US can play the game longer given its historic reserve currency status but the end will be all the more catastropic because of it and is written in scripture. A USD or any currency without public confidence or the confidence of its trading partners (Yes the US has never been more dependent on its trading partners) will become worthless almost over night. It's all in the vision of GAS, in Isaiah chapter 47, Charles D Evans dream/vision etc. This nefarious scheme that will hurt the rest of the world will backfire and will justify the rest of the world (in their own eyes), and the Lords right arm, in attacking and dividing up the US for spoils.

[Hogmeister]

In Isaiah's writings of our day we clearly see that we are facing a loss of confidence event.

Isaiah 47:8

Now therefore hear this, O pampered lady,
securely enthroned, thinking to herself,
I exist, and other than me there is nothing;
I shall not be widowed or bereaved of children:

Babylon, securely enthroned, thinking to herself, “I exist and other than me there is nothing”. Here we have Babylon or this whole system or those who belong to it or this entity assuming Godlike attributes. Because God exists and other than God there is nothing, Isaiah has said so a number of times. Other than God, there is nothing. Without God, we are nothing. Here, she is arrogating to herself those kinds of powers. So at this point, in the progression of things, she is assuming divine status, just like the King of Babylon tries to assume divine status, and have the whole world worship him. So she is becoming that way and that is an anti-God stance, which when it comes to that point, God makes an end of her. When she becomes anti-God. When she becomes anti-God, she becomes anti-His people. People become anti-Christs. Very much like Hitler during the Second World War. He focused on the Jewish people to make an end of them. That is an anti-Christ or anti-God stance and when he does that, he will come to an end. The Lord will make an end of him. She says, “I exist and other than me there is nothing, I shall not be widowed or bereaved of children.” She has plenty of people to support her system, as we saw in chapter twenty-three. Tyre has plenty of colonies; her merchandising centers or ports are all over the world and those are like her children, her offspring. She’s only becoming more entrenched, she thinks, in power, and in authority all over the world. Nothing is going to change that.

47:9

Bereavement and widowhood
shall suddenly overtake you, both in one day.
They shall come upon you in full,
notwithstanding your many magical feats [a prominent feat being money creation ex nihilo]
and exceedingly strong combinations.

These are a woman’s greatest fear, for those are a shame and a disgrace, “shall suddenly overtake you all in one day.” The day, of course, is a rhetorical link to the Day of Judgment. So, in that Day of Judgment, the end of days, the end-time of the world, Isaiah defines that day as a three-year period of judgment and destruction. There, things will suddenly overtake her, very suddenly, very quickly. And all the great destructions of the Old Testament, you look at them and most of them happen very suddenly and very quickly and unexpectedly; like the destruction of Sodom and Gomorrah. That was sudden and unexpected. The destruction of Pharaoh and his army, that was sudden. Those things were not expected.

“They shall come upon you in full measure of covenant curses. Notwithstanding your many magical feats and exceedingly strong combinations.” This technology of Babylon, this promotion and sell and manufacturing and sell of the works of men’s hands has certain magical attributes, a certain magical thing about it. And you look at today’s technology, for example, and it blows you away. In spite of all that, in spite of the unions, various unions and conspiratorial forces that combine to form exceedingly strong combinations, that system is still very vulnerable when the Lord acts. Men think it is strong, men think it is in place and can’t be moved. There are so many people involved. Like Jeremiah says of Babylon: “Her wounds are incurable”. She can’t be mended; she has certain flaws, certain fundamental flaws in the system that will eventually bring about its destruction. Why? Because when she oppresses Zion, what is she doing? Where the harlot Babylon oppresses Zion, this is very much like fairy stories. The archetypes in fairy stories are the essentially the same as in Isaiah. We have the oppressive stepmother here who oppresses the innocent princess. She is of royal birth and that’s what the harlot Babylon does. She oppresses the woman Zion. So, these are archetypes we are talking about. When she does so, she is bringing upon herself the curses of the covenant the Lord made with his people. Right? With Zion.

If the people of Zion get their act together and begin to observe the laws of the covenant then God is bound by covenant to deliver her from oppression, from bondage, and from threats to her life. The way that He does it is by bringing the covenant curses of his covenant upon those who deny her rights; who infringe upon her rights. In this case it is Babylon. That is why ‘bereavement and widowhood’ are common covenant curses, why they come upon her in full. Now, there is no mercy for her. She showed no mercy. Now, she also receives no mercy.
All the way through Isaiah you will notice that whenever the King of Babylon, the King of Assyria, or Babylon, whatever they do to the Lord’s people happens to them too.

47:10

Secure in your wickedness,
you thought, No one discerns me.
By your skill and science you were led astray,
thinking to yourself, I exist,
and there is none besides me!

Wickedness, the opposite of righteousness. You thought: No one discerns me”. No one discerns Babylon really for what it is. All those who are caught up with it and are in the middle of it don’t really realize what it is really doing to them. If people who are in bondage in Egypt; if you’re born into bondage don’t you just accept that is what it is like—that that is life. This is how it is. Babylon has grown stronger and stronger in its power over time and in its ability to control people and yet it creeps up so slowly on them that they don’t realize just what it is doing to them. We pay half of our income, in some cases, to taxes now. We just think that is normal. Right? You look in the bible and the people who were taxed to that degree they considered themselves to be in grievous bondage. And yet, we think, this is just normal. We don’t discern Babylon for what it really is what it is doing to us. “No one discerns me”, she says. She’s getting away with it.

“By your skill and science you are led astray. Thinking to yourself I exist and there is nothing or there is none besides me”. Again, arrogating to herself divine powers, as if she were God. She stands in the place of God to those whom she oppresses. Also the term ‘skill and science’ indicates that there is a very sophisticated technology involved here. And because that technology, in and of itself, is probably good, people think, “This is wonderful!” but when the same technology, which is, in and of itself is good, is used to control and oppress to keep people in bondage then in becomes evil and it works against her.

47:11

Catastrophe shall overtake you,
which you shall not know how to avert by bribes;
disaster shall befall you
from which you cannot ransom yourself:
there shall come upon you sudden ruin
such as you have not imagined.

Because that has been the order of the day, if a problem occurs, just bribe somebody and that takes care of that. You can bribe it away. Not this one, this is going to be a different kind of trouble. “Disaster shall befall you from which you cannot ransom yourself”. Who’s ransomed though? Is someone going to be ransomed out of it? Yes. The people of Zion are going to be ransomed out of it. The Lord keeps saying that over and over, but not Babylon.

“There shall come upon you sudden ruin such as you have not imagined.” When that whole structure collapses, we cannot even imagine what that will be like. It will be like the whole world comes to an end. That is why it is called the end of the world, the end of the present world. It will be a whole new world. Not the New World Order, I dare say, which is a counterfeit of what it is supposed to be, because that is, more or less, the perpetuation of things the way they are now except with more controls, more oppression, more bondage. But this new world will be free. It will be of a higher order, it will be a new paradise as Isaiah describes it. We can hardly imagine that and we can hardly imagine the destruction that will precede it.

47:12

Persist, then, with your combinations
and with your many magical feats [Wizard of Oz],
at which you have exerted yourself since your youth.
It may still be of use to you;
perhaps you can hinder it.

Combinations or machinations of people, intrigues, covenants, and orders, and plans and schemes and those kinds of things. Even the occult gets involved and is, perhaps, the center of the whole thing. You see later on in the book of Isaiah they are all a part of Babylon, “and your many magical feats.” Your wonderful technology that just blows people away. But, really, that technology, in and of itself, has nothing to do with Babylon. It is just being utilized for her purposes to dupe people. “…of which you have exerted yourself since your youth.” They will still be of use to you, perhaps you can hinder it. So, now Isaiah is beginning to mock her. Speak of her satirically. It’s been a great effort all this time, if you work a little harder you may be able to avert disaster, you may be able to do something about the trouble that is looming on the horizon.

47:13

But you are powerless, despite all your tactics.
Now let those who unravel the heavens,
who observe the stars
and make predictions month by month [MSM economists and government shills],
stand by you and save you!

She is a woman and women do use tactics. Men do too, of course, in certain instances. In spite of these tactics and all the machinations, all of the intrigues, she is really powerless before God who has all power. “Now let that those who unravel the heavens, who observe the stars, and make predictions month by month stand by you and save you.” Why? Because those guys have been predicting a wonderful new age, too-- A New World Order. All the things by the year 2000- we will be doing, and all of the kind of technologies, the architectures, all the things we will be doing in the future. And if we follow these statistics that’s where it will lead us and it will just get bigger and better as time goes on. So, we might as well all have a piece of the pie. A bigger piece for me and a small piece for you, of course, and that’s how it works. And all of that is phony, because those people [Mostly main stream media shills and economists] will not be able to predict what’s going to happen. They have never even conceived that all their schemes are going to come to nothing, so he is mocking them. Now all those guys predict, go ahead, let them predict, see how it measures out as to what is going to happen.

47:14

See, as stubble they are burnt up in the fire,
unable themselves to escape the hand of the flame.
These are no embers to warm anyone;
such is no fire to sit by!

A ‘fire’ is, of course, the Day of Judgment, and the destruction by fire and by the sword. It is also a metaphor to describe the King of Assyria or the King of Babylon who destroys the very entity he represents. The ‘stubble’ is a chaos motif, it is like the ‘dust’, they are reduced to nothing. ‘Unable of themselves to escape the hand of the flame.’ Those who do escape, of course, are the people of Zion. Again, the ‘hand’ is the left hand; the ‘flame’ is also the metaphor describing the King of Babylon or the King of Assyria. “These are no embers to warm anyone. Such is no fire to sit by.” Like the fire of the idolaters, half the pieces they made an idol out of and the other half they burned in the fire and they warm themselves by it. See, he really is just mocking her here. This ‘fire’ is a much greater fire; it’s a very destructive fire. It’s a fire that turns everybody to dust and flying chaff in an instant.

47:15

This is what your procurers [politicians and bankers] have profited you—
those for whom you have exerted yourself
since your youth—
each deviates his own way;
none is there to save you.

The ‘procurers’ are your salesmen or your pimps . You’ve exerted yourself in this lifestyle from your youth. This is what you were from the beginning. ‘Each deviates his own way’, because they are all deviants that associate with her, in one way or another; more or less. Everyone who follows the Babylon paradigm is deviant in some way from God—the creator-- from his plan. Some of them in gross ways, some of them not. ‘None is there to save you’. No salvation for Babylon when at the very time there is salvation for Zion because of her righteousness and the servant is there to save her—Zion. So, which do you want to be part of? It’s basically your choice.

http://www.isaiahexplained.com/isaiah_ch_47.html" onclick="window.open(this.href);return false;

[Jason]

What do you think of US and international banks placing trillions in excess deposits (in USD) at the FED instead (no shortage) of greasing the credit wheels of the economy?

The current deflationary phase with salaries taking a nose dive and unemployment and welfare programs exploding while printing dollars like its going out of style is all calculated to destroy the real economy and fool/subdue the world (for a time) while doing it and it is all planned. Banks have literally trillions stashed at the FED that could be multiplied into the economy generating business as we speak. The Norwegian bank I work for (senior auditor) even have billions (USD) at the FED which is unprecedented. But this machination (using the words of a prophet) will utimately lead to the intended (or unintended) loss of confidence in the US real economy and as a result the USD. An economy that can no longer produce real goods will not have a strong currency no matter which way you twist your arguments. True the US can play the game longer given its historic reserve currency status but the end will be all the more catastropic because of it and is written in scripture. A USD or any currency without public confidence or the confidence of its trading partners (Yes the US has never been more dependent on its trading partners) will become worthless almost over night. It's all in the vision of GAS, in Isaiah chapter 47, Charles D Evans dream/vision etc. This nefarious scheme that will hurt the rest of the world will backfire and will justify the rest of the world (in their own eyes), and the Lords right arm, in attacking and dividing up the US for spoils.

They either have to do that...or pay back the $9 trillion in debt at some point...or forfeit their own assets...

[Hogmeister]

We will see both deflation and inflation exploding at the same time... just affecting different parts of the economy at the same time.

[Jason]

We will see both deflation and inflation exploding at the same time... just affecting different parts of the economy at the same time.

If that is the case one or the other will not be the result of monetary policy/creation mechanism...but will be supply/demand or monopoly.