The TRUTH about the fed pivot. It's NOT what you're being told. | |
Anonymous Coward User ID: 80211818 Slovakia 03/25/2023 12:42 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 80374853 United States 03/25/2023 12:49 PM Report Abusive Post Report Copyright Violation | The Fed is illegal and no more Federal, than Federal Express. Everything was transferred to the Treasury many years ago. These past 2yrs have only been played out because so MANY are still asleep. FRNs are illegal. "Money" from their printer press is lifetime debt slavery. The whole system has to crash. 95% of Cryptos won't survive either, you'd have to know the 5% that will, to not lose it all on that. Please research and learn. If you think "Biden" is the same exact guy from 7yrs ago, then you REALLY need to wake up. Check the earlobes. They have all been replaced and our world is about to change come September. Hang on TIGHT. Especially if everything written above is a surprise to you. ALL facts. Seriously. Wake UP!!! |
Anonymous Coward User ID: 81337033 United States 03/25/2023 12:49 PM Report Abusive Post Report Copyright Violation | How about not a Black swan but a White? Why not triple the Earth's interest in mining asteroids and mini moons? Just the huge mind share and for sure our radiant Elon Musk might be the ticket to post WW2 riches. ChatGPT and other AI might be the best way to punch that ticket. |
okie1
(OP) User ID: 84979806 United States 03/25/2023 12:53 PM Report Abusive Post Report Copyright Violation | Bonus factoid: If you want a really simple explanation of why all fed interventions are deflationary in the long run, it's because the basic underlying principle behind our monetary system doesn't change. Quoting: okie1 That principle is that all monetary expansion creates a greater liability than the sum of new money injected into the money supply. For example, someone borrows 300k to buy a house, but over the course of the loan has to pay back 600k, meaning 300k was put into circulation, but over the course of the loan 600k will come out. ALL fed interventions obey this principle long term. All fed interventions only delay the inevitable, but at a cost of making the inevitable more devastating when it finally catches up. Again, we're currently paying the price for things they started doing 15 years ago. The literal definition of inflation is the expansion of the money supply. At no time in history, has the expansion of the money supply been deflationary. The money supply is contracting atm. Violently. The Federal Reserve ONLY creates inflation. For the money supply to contract, the entire economy has to restructure from spending to savings and production. The bank bailouts are the expansion of the money supply. Once the entire debt based economy starts collapsing with financial crisis, the Federal Reserve will start expanding the money supply like the past 15 years.... They've barely withdrawn any liquidity. Interest rates still have to rise to above the rate of real inflation instead of negative, to encourage savings. The dollar is going to collapse. You have it backwards. The economy is a monetary phenomenon, not the money an economic phenomenon. It's not contraction of the economy that causes the money supply to contract, it is contraction (including growth below trend) of the money supply that causes contraction in the economy. Banks are not getting bailed out right now. Think about it this way. If someone loses money in the stock market and has to mortgage their house to pay their margin debt, was the mortgage a bailout? Of course not, they simply leveraged an asset they owned to pay their debt. That's what's happening with the banks right now. They owe depositors money, and they're borrowing money from their bank (the fed is the banks' bank) against assets that they own. There really hasn't ever been a "bailout" per se, even going back to 2008. Even the actual bailout from the treasury to the banks wasn't really a bailout, but rather the treasury "buying the dip" so to speak. They actually turned a pretty healthy profit on those MBS a few years after the crisis. Did they pay more than they should have at the time? Perhaps, but it was in their interest to do so. As far as the precept that interest rates must rise above the rate of inflation, I don't know if there's an actual mathematical argument behind that or if it's just something people say. People say a lot of stuff, like the fed controlling rates, for example, that's not true. You would be amazed how much misinformation is believed to be fact by the general public, and how gladly the media will repeat falsehoods. It may be that there's an actual mathematical reason why rates have to go above inflation, but I wouldn't make the assumption that's the case. If it were monetary inflation (i.e. the money supply growing) causing the price inflation, maybe, or even probably. But it's not in this case. The money supply is contracting, so I don't see what interest rates going above CPI would really have to do with anything. Maybe they will maybe they won't, but I certainly wouldn't expect that to fix anything if they do. And yes, the fed's playbook is to do things that help the expansion of the money supply, but the fed doesn't control the expansion of the money supply, US consumers do. It's the supply and demand of and for credit that determines the expansion of the money supply. And that can also determine interest rates, but rates are also determined by risk aversion and inflation expectations. Believe me, though, the money supply is shrinking. That's not up for debate. If that fact disrupts your paradigm then it's time to get a new paradigm. [link to fred.stlouisfed.org (secure)] [link to fred.stlouisfed.org (secure)] [link to fred.stlouisfed.org (secure)] okie |
okie1
(OP) User ID: 84979806 United States 03/25/2023 12:57 PM Report Abusive Post Report Copyright Violation | Where does the move to CBDC fit in your theory? That clearly seems to be happening. Do you see it as solely about controlling a population during and after a collapse? Quoting: Anonymous Coward 81639379 All I've got is what the fed has proposed in its white papers. What they're proposing is backing the CBDC with the assets on their balance sheet. That tells us two things. The fed seemingly plans on growing its balance sheet by a lot in the coming years (or months idk at this point), AND that they have no plans of normalizing their balance sheet ever again. So what they're saying by not saying it is that they expect to be bailing the banks out of a lot of assets, and that they never plan on normalizing again. Of course this means the end of the monetary system as we know it. Banks will no longer be lenders, and instead of debt backed fiat we'll have an asset backed currency. The fed addresses this by saying that the banks don't really make money being investment banks anymore anyways, and that they pretty much make all their profit in fees. Which is accurate. And the fed is saying that they'll continue to need the banks to process payments in their network, for which they'll get rewards. So basically the banks become analogous to miners in terms of the service they provide to the financial system. They'll basically be processing transaction by running nodes for the blockchain, and getting fees for doing it. The fed has also promised one to one interoperability with the dollar, meaning you'll be able to take a one dollar bill to your bank and exchange it for one digital dollar on the ledger, that you can then spend with your fed app much like bitcoin works now. The fed could be lying, and at first I assumed they were, but the more I think about it the more I think they're not. What that means is no hyperinflation of the USD. Meaning the government doesn't get to inflate away its debt, meaning default. In this whole scheme, the fed would get to decide what financial institutions got to get saved, and which assets they would take onto their balance sheet, which would determine the rate of deflation of the dollar supply. The fed would have the power to open emergency vehicles and purchase anything they wanted from the banks, and then potentially forgive certain debts and foreclose on others. For example, they could maybe forgive student loans but foreclose on houses and repossess cars. I think what the fed ultimately wants is to be the provider of all assets and capital in the system. The average person would work for a fed owned company, live in a fed owned house, drive a fed owned car, and use the fed's CBDC to shop at fed owned stores. And I can't see any legal challenges to it either. As an asset backed security, the digital dollar would merely be yet another stablecoin, legally speaking like any other. It wouldn't be currency. It would be public fed stock that had the function of currency. Legally speaking, it would be no different than taking shares of apple stock down to the apple store and trading them for an iphone. ETA: Oh, and in this scenario, the supply of USD could get very, very low without the banks necessarily failing. The banks can bail in customer deposits and exchange them for bank stock. The fed could then issue digital dollars to the banks in proportion to their shares in the fed, which is a function of the banks' solvency in a way. The more assets a bank has, the more stock in the fed they have, typically. So the banking system would get heavily consolidated down into only the banks necessary to roll out the digital dollar, and those fortunate enough to have had their money in those winning banks will perhaps get the opportunity to exchange their bank stock for CBDC. At least that's how I see it playing out. okie |
Anonymous Coward User ID: 71080834 United States 03/25/2023 01:01 PM Report Abusive Post Report Copyright Violation | I wanted to wait for some more data to come in before making this, but it suffices to say that rumors of the fed pivot on social media are greatly exaggerated. Quoting: okie1 Charts of the fed's balance sheet have been circulating that look something like this, and people have been proclaiming the return of QE and monetary inflation. [imgur] [link to imgur.com (secure)] People are predicting that the fed has already pivoted and that the money supply is about to explode again like it did in 2020. Maaaaaybe, but maybe not! Or maybe even probably not. There's a fundamental misunderstanding when it comes to the fed's balance sheet. The fed's balance sheet can grow in two different, and opposite, ways. One way is the fed conducting open market operations (e.g. QE), where it buys securities (e.g. mortgage back securities and treasury bonds) directly from the secondary market. The other way is the fed merely makes collateralized loans against securities held by banks. That's done with a "repurchase agreement" through the fed's "discount window." The difference is this. If someone takes out a home equity line of credit, that's analogous to a repurchase agreement, aka "repo." But if the bank were to outright buy a house from someone, that's analogous to open market operations. This is a chart of the fed's balance sheet, including only securities that they own outright: [imgur] [link to imgur.com (secure)] As you can see, the fed is STILL tightening its balance sheet. That is QT is still in full swing. And obviously this paints a very different picture than the assumption that we're living through a repeat of 2019. These two types of fed intervention have vastly different implications. Open market operations where the fed buys treasuries outright creates increased demand for government bonds, which can hypothetically bring rates down and expand the money supply. For example, if the primary dealers are selling bonds for a profit on the secondary market, and the fed is paying market prices, then that will almost certainly increase demand. Not only are the banks incentivized to buy more treasuries, the resulting drop in rates will incentivize the government to spend more. This is due to the fact that falling rates increase the value of bonds, meaning the fed will turn a profit on those bonds, which must be remitted back to the treasury. Effectively meaning that the taxpayers are able to borrow money at negative interest rates. Not only is the treasury not paying interest, they're actually getting more money back from the fed than they paid out. That's been the bond market for last 15 years. As long as interest rates are moving down, the money supply can increase for as long as there's demand for credit. Repo, on the other hand, means that the banks are losing money on the bonds. Repo is something banks only use when they're hard up for cash. And that cash comes at a cost. They call it the "discount" window because the interest rates are higher than market, resulting in a so-called discount for the fed. It's set up that way to provide liquidity to banks that desperately need it, but at the same time to incentivise them to use the overnight market whenever possible. So this is a very different dynamic. Rates are increasing, making the bonds worth less, and also shrinking the money supply, and deposits. Money can shrink in the same way it's created, just in reverse. That is, loans expand the money supply, but the money supply contracts when those loans are paid off, unless new loans are created at the same rate the old loans are rolling off. That forces the banks to sell treasuries to cover the withdrawals, and if there are unrealized losses due to rate increases then it can destroy them, just as it did SVB. Now the aforementioned data I said I wanted to wait for before commenting is reserve deposits: [imgur] [link to imgur.com (secure)] That's the money held by banks at the federal reserve. It's analogous to your checking account, but for a bank. Banks have checking accounts at the fed, basically, where they store their reserves. In the last week or so, the fed's balance sheet has increased about 350 billion due to their overnight lending. The bank reserves have only increased about 250 billion. So the money is going out of the reserve accounts almost as fast as it's going in. In other words, the banks aren't being bailed out. They're leveraging assets to meet depositor demands, and in the long run will be worse off for it. They're losing the interest payments on the bonds, plus having to pay 4.75% interest to the fed. So effectively they're having to pay 8-10% interest to the fed in order to borrow this money to cover customer deposits. And of course the fed is insolvent still, so that money simply vanishes into a black hole, further shrinking the money supply. So inconclusion, this isn't QE, it's the opposite of QE, and QE is probably functionally impossible right now. While there's nothing legally preventing the fed from buying bonds on the open market if they wanted to, the implications would be deflationary in the short term. QE is always deflationary in the long term (we're dealing right now with the long term consequences of QE done 15 years ago), but QE in this environment would probably be almost immediately deflationary. Because while it would initially stimulate borrowing, it would immediately start pulling more money from the circulating money supply in the form of taxes, and throwing it into the fed's giant black hole of insolvency. That is, the treasury would borrow say 100 dollars for a 1 month bill, and then have to immediately give back the 100 plus five bucks interest, which would vanish from the money supply. So the faster new money is created the faster the circulating money supply shrinks under those circumstances. I hope this also gives you some insight into the debt ceiling crisis. This is the part the media isn't telling you. The government has gotten used to borrowing money at effectively negative interest rates over the last 15 years, and now they're having to actually service their debt. That means not only are they having to use taxes to replace the remittances from the fed they're used to getting, they're having to use tax revenues to pay the interest. So the cost to borrow money for the taxpayer has gone up tremendously in the past few months. And that's a massive problem for the government seeing as how tax revenues are going down in real terms. I.e. everything the government spends money on in the course of its operations has increased in price, but tax revenues aren't keeping up with the increased cost. E.g. increased medical cost for Medicare, increased cost of living for those on social security, higher government worker salaries, etc. Yes, the government could increase taxes, but not without dire consequences that would be effectively killing the golden goose as it were. They would merely be increasing the rate at which the money supply is shrinking, AND accelerating the damage to the economy, creating job loss and lost economic opportunity, which would just result in even less tax revenue than they would have had, had they not raised the taxes. Ergo, raising taxes to fund a higher deficit would have almost immediate devastating consequences. So yes I know the debt ceiling is a political football that's gotten kicked around a lot lately, but things really are different now, and the situation really is dire. If rates don't come down the the money supply doesn't begin expanding soon, I think there's a very real chance the government could actually default. Though it would be a very difficult time to live through, a US government default is exactly whats needed to drive a stake through Clown world and kill it for good… Once the parasite is finally dead. The host can thrive and liberty can once again flourish. |
JDun
User ID: 82329364 United States 03/25/2023 01:16 PM Report Abusive Post Report Copyright Violation | |
DovesofPeace
User ID: 84940125 United States 03/25/2023 01:17 PM Report Abusive Post Report Copyright Violation | There are not proper balanced measures in society regarding value The rich know the price of everything but the value of nothing because for them the value is the price. - Hugh Nibley [link to www.offeroftrust.com (secure)] About: "I solve problems" Listen to this. Promise you won't regret it: [link to youtu.be (secure)] Truth Overcomes All Bonds |
Jarry Park
User ID: 71629002 United States 03/25/2023 01:19 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 85508286 Israel 03/25/2023 01:20 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 85508447 United Kingdom 03/25/2023 01:25 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 85508286 Israel 03/25/2023 01:31 PM Report Abusive Post Report Copyright Violation | it seems like they are going to stick the problem with the avg American. They won't be able to pay their mortgages, that will be MOST people(maybe >85%?). All those assets will hit the market and everything will be on fire sale. Dollar will be king. I think Crypto is a big fakeout. Given what you just said and the new regulations popping up, it shouldn't stay up for long. America is going to be a like nuke just went off(maybe the real thing too) everything will hit the bottom, pensions will go bankrupt, everything non-funded. Probably expencting more vaccine deaths too, perhaps something much more serious(as the ex CDC head suggested). |
Dr. PICKLE User ID: 85173318 United States 03/25/2023 01:32 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 85508286 Israel 03/25/2023 01:35 PM Report Abusive Post Report Copyright Violation | "I think what the fed ultimately wants is to be the provider of all assets and capital in the system. The average person would work for a fed owned company, live in a fed owned house, drive a fed owned car, and use the fed's CBDC to shop at fed owned stores." ie. FASCISM |
Anonymous Coward User ID: 82597307 United States 03/25/2023 01:35 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 81568842 United States 03/25/2023 01:40 PM Report Abusive Post Report Copyright Violation | Bonus factoid: If you want a really simple explanation of why all fed interventions are deflationary in the long run, it's because the basic underlying principle behind our monetary system doesn't change. Quoting: okie1 That principle is that all monetary expansion creates a greater liability than the sum of new money injected into the money supply. For example, someone borrows 300k to buy a house, but over the course of the loan has to pay back 600k, meaning 300k was put into circulation, but over the course of the loan 600k will come out. ALL fed interventions obey this principle long term. All fed interventions only delay the inevitable, but at a cost of making the inevitable more devastating when it finally catches up. Again, we're currently paying the price for things they started doing 15 years ago. you're a fucking moron that doesn't know what the fuck you are babbling about. All QE is not deflationary. moran. you ignorant dumb ass nobody takes out a 300K loan so he can pay back 600K. he takes it out to put it work and can pay back the 600K because he has created PRODUCTIVITY that produces a good or a service that is worth the principle + time value of money + his profit. So QE is deflationary ONLY IF THE MONEY CREATED IS DIRECTED TO A PURPOSE TO CREATES A GOOD OR A SERVICE THAT OFFSETS THE MONEY LOANED + THE TIME VALUE OF MONEY. Which is the exact opposite of what has happened since 2019. The Government is spending money, producing nothing of value with it and thus creating inflation as the added dollars are not offset by added goods. you don't know what you are talking about. |
XJDUB
User ID: 12346242 Canada 03/25/2023 01:41 PM Report Abusive Post Report Copyright Violation | But it is, let me guess, what I've JUST been told, right? Let the facts fall wherever, whenever, and however they may. INTP - The Logician. 'Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.' - Albert Einstein. |
okie1
(OP) User ID: 84979806 United States 03/25/2023 01:47 PM Report Abusive Post Report Copyright Violation | Great 5hread op...thanks Quoting: Anonymous Coward 85508633 So treasury direct is your recommendation? What duration? If USG goes BK so does TD I'm in 4 week. I'm just hoping it's time to buy the dip before I have to start worrying about a government default. If I haven't spent the money or the debt ceiling hasn't been raised by June I'll have to start thinking about other options. I just don't know what those options might be... okie |
Anonymous Coward User ID: 80365094 United States 03/25/2023 02:01 PM Report Abusive Post Report Copyright Violation | I'll tell everyone a secret. People are sick of this shit across the board. Americans are sick of freaks in DC, sick of lbgtwaxvuz in government and schools, sick of being vaxed at, sick of being looted, sick of being threatened, sick of sexually twisted morons in our schools. Basically everything this new cult that took over the democratic party in DC touches turns to poison. Most importantly Americans now know that the government just killed or damaged millions of women, children, elderly. People want the end of clown world. They know they are being enslaved then led to slaughter. Aint happenin. It's time to let it crash and burn starting with the toxic banks. The clowns need to be purged out of every place needing purging. Courts, hospitals, govt., and banks. Americans control this party and they know it. Its time for reset alright and we all know who's on top once it happens |
Anonymous Coward User ID: 80365094 United States 03/25/2023 02:04 PM Report Abusive Post Report Copyright Violation | I'll tell everyone a secret. People are sick of this shit across the board. Americans are sick of freaks in DC, sick of lbgtwaxvuz in government and schools, sick of being vaxed at, sick of being looted, sick of being threatened, sick of sexually twisted morons in our schools. Basically everything this new cult that took over the democratic party in DC touches turns to poison. Most importantly Americans now know that the government just killed or damaged millions of women, children, elderly. Quoting: Anonymous Coward 80365094 People want the end of clown world. They know they are being enslaved then led to slaughter. Aint happenin. It's time to let it crash and burn starting with the toxic banks. The clowns need to be purged out of every place needing purging. Courts, hospitals, govt., and banks. Americans control this party and they know it. Its time for reset alright and we all know who's on top once it happens and don't forget, this is their biggest fear. Their fear is that we will discover -> REPRESNATIVES ARE OBSOLETE! WE DONT NEED THEM ANYMORE! Reps go home, Americans prosper and we all know it |
Banana Sandwich
User ID: 85117126 United States 03/25/2023 02:11 PM Report Abusive Post Report Copyright Violation | Because this backwards world is bananas. |
2012Portal
2012Portal - Mayan Beyond 2012 User ID: 81638971 Netherlands 03/25/2023 02:11 PM Report Abusive Post Report Copyright Violation | Summary: There are rumors on social media about the Federal Reserve's pivot, but they are greatly exaggerated. The Fed's balance sheet can grow in two opposite ways: through open market operations or collateralized loans. While some people are predicting that the Fed has pivoted and is about to embark on quantitative easing, the Fed is actually tightening its balance sheet, and the data does not support this claim. Reserve deposits show that the money is going out almost as fast as it's going in, meaning the banks are not being bailed out. QE is not possible right now, and it would likely be deflationary in the short term if implemented. Now, if this is true, you realise, it's >>game over<<, right? From the love of power to the power of Love - My camera and video gear: [link to graphicstart.com] --- --- --- "Jesus Christ, the Son of God our Savior" |
2012Portal
2012Portal - Mayan Beyond 2012 User ID: 81638971 Netherlands 03/25/2023 02:19 PM Report Abusive Post Report Copyright Violation | A CBDC backed on debt is useless. Well, I mean you can use it, may have to, but it is just fiat with a digital wrapper around it. My 82 year old father said, "Why do we need a CBDC, I pay most everything digitally anyway."? And yes, printed currency will stay around, at least for a while. This all said. These CBDC's all sound useless. UNLESS - Unless a powerful nation, like the USA, actually backs their Central Bank Digital Currency with BitCoin and precious metals. (or only BitCoin) Read Softwar by Jason Lowery. Not sure he recommends what I did above. BUT, he does recommend that the US back BotCoin and mine the heck out of it and ASAP. Otherwise, some other nation WILL. My thesis is one sentence: The first major nation to back their CBDC with BitCoin, wins! https://twitter.com/_/status/1627640858106380290 Last Edited by 2012Portal on 03/25/2023 02:21 PM From the love of power to the power of Love - My camera and video gear: [link to graphicstart.com] --- --- --- "Jesus Christ, the Son of God our Savior" |
okie1
(OP) User ID: 84979806 United States 03/25/2023 02:24 PM Report Abusive Post Report Copyright Violation | One of the best most thoughtful and well considered threads in a long time. So in a pure text book version of deflation gold and silver would be dropping but because of a very large fear and uncertainty factor they are rising, because of it at least being some sort of “safe harbor” ? So the specter of a full on failure of the dollar is where the fear comes from? Quoting: Anonymous Coward 83070820 Also, it seems as though the debt service will soon be the largest expenditure in the budget, if this were the case in my personal finances I would not remain solvent for long. I'm no expert on gold, but yes the price of gold is very strongly correlated to fluctuations in the money supply. I also know there's a lot of increased demand for gold from retail investors due to the bank failures. There's an entire subculture of retail investors now who almost worship gold. Same for Bitcoin. I think it's unlikely though that they can create enough demand to sustain prices. I could be wrong about that, but it's rarely wrong to assess markets from a monetary perspective. The question you always have to ask yourself is where the money is going to come from to sustain higher prices. okie |
Anonymous Coward User ID: 84690808 United States 03/25/2023 02:27 PM Report Abusive Post Report Copyright Violation | |
okie1
(OP) User ID: 84979806 United States 03/25/2023 02:27 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 54795381 United States 03/25/2023 02:28 PM Report Abusive Post Report Copyright Violation | |
okie1
(OP) User ID: 84979806 United States 03/25/2023 02:30 PM Report Abusive Post Report Copyright Violation | it seems like they are going to stick the problem with the avg American. They won't be able to pay their mortgages, that will be MOST people(maybe >85%?). All those assets will hit the market and everything will be on fire sale. Dollar will be king. Quoting: Anonymous Coward 85508286 I think Crypto is a big fakeout. Given what you just said and the new regulations popping up, it shouldn't stay up for long. America is going to be a like nuke just went off(maybe the real thing too) everything will hit the bottom, pensions will go bankrupt, everything non-funded. Probably expencting more vaccine deaths too, perhaps something much more serious(as the ex CDC head suggested). I believe Bitcoin will become the new world reserve currency. That's my own personal pet theory not really based on anything other than my own suspicions. And I also think Bitcoin will crash to near zero before that happens. But if you see Bitcoin trading really, really cheap and the media is proclaiming its death, I think that's going to be the time to buy some. okie |
okie1
(OP) User ID: 84979806 United States 03/25/2023 02:32 PM Report Abusive Post Report Copyright Violation | "I think what the fed ultimately wants is to be the provider of all assets and capital in the system. The average person would work for a fed owned company, live in a fed owned house, drive a fed owned car, and use the fed's CBDC to shop at fed owned stores." Quoting: Anonymous Coward 85508286 ie. FASCISM Sort of. The best analogy I can think of is a company town. Google "company town," "company store," and "coal scrip." Now imagine America is one giant company town, all the stores are company stores, and the USD is a coal scrip. okie |
okie1
(OP) User ID: 84979806 United States 03/25/2023 02:38 PM Report Abusive Post Report Copyright Violation | Would it be accurate to say that the Fed induced a hyperinflationary period and is now contracting money and ramping up rates in a bid to prevent full blown hyperinflation? Quoting: Dr. PICKLE 85173318 Thank you for this thread. Thought provoking. When you have a debt backed fiat monetary system, all periods of deflation create periods of inflation, and all periods of inflation create periods of deflation. It's the boom bust cycle people talk about. Credit expands the money supply, but the resulting debt service has a delayed deflationary effect. I.e. the money supply expansion slows, but the debt service on the loans that created the money don't go away. The fed doesn't control that cycle, they just try to steer the ship away from the rocks. Although lately I think they're more of a PR organization than anything else. I think about the only thing left in their power is to calm the public with reassuring words. As far as hyperinflation, I'm beginning to seriously question whether it's even mathematically possible for the dollar to hyperinflate. And beginning to wonder if it's in fact mathematically impossible. I would suggest reading a study by Rogoff and Reinhardt. [link to en.wikipedia.org (secure)] okie |