tag:blogger.com,1999:blog-27697009.post7931965788024287530..comments2024-02-29T03:21:35.007-08:00Comments on The Great Depression of 2006 : What Seems So Clear On A Personal LevelJim in San Marcoshttp://www.blogger.com/profile/09435296419912935381noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-27697009.post-52924449189238164042013-04-03T22:19:21.447-07:002013-04-03T22:19:21.447-07:00Your point of perspective is a good one Jim. Of co...Your point of perspective is a good one Jim. Of course we know we've been a frog in a slow boiling pot ever since 1913 with the birth of The Federal Reserve and Income Tax... inflation has gradiently ravaged our purchasing power. But there still is the potential for deflation or deflationary periods due to the imbalance between paper claims and real tangible wealth. I believe Nicole Foss, A. Gary Shilling and Harry Dent all make a good argument for deflationary winds to hit us at times.<br /><br />I'm in the USD now and using it to make money although I know when the indicators of massive inflation hit us (M2, price of oil, wages) I will need to shift out of paper money and into hard assets, in the hope of preserving some of the small amount of wealth that I have.AIMnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-39179023218484960312013-04-03T19:46:59.418-07:002013-04-03T19:46:59.418-07:00Hi AIM
Personal perspective could be something I ...Hi AIM<br /><br />Personal perspective could be something I have overlooked. If we divide the population into three groups; under 20, under 40 and over 40, inflation is perceived differently with each group. The people under 20 have never experienced inflation or deflation. Whereas the people under 40 probably view the housing boom and bust as inflation and then deflation. The people 40 and above are looking at their savings that have lost purchasing power to some degree.<br /><br />When we were under the gold standard, the bank knew when it lent $20 it would get back the same amount with interest. The gold standard prevented governments from printing money. In my opinion, without that control, it's kind of like turning a pervert loose in a day care center. Your not sure what will happen when, but you have a pretty good idea of the end results.<br /><br />Presently I have had no cost of living or pay raise for 3 years and I'm not seeing any deflation. My dollars don't go as far as they did before. So through the inflationary process, I'm being paid less in actual terms. So I guess it could be considered deflation of sorts. The employer gets more for his dollar. Kind of a conundrum that cuts both ways.Jim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-58405875199169043582013-04-02T16:30:08.912-07:002013-04-02T16:30:08.912-07:00Hi Jim,
Responding to this and to your response to...Hi Jim,<br />Responding to this and to your response to me in the last article...<br />there are a lot of paper claims out there for a finite amount of actual tangible wealth (securitized investments, derivatives, etc.) meaning there is a lot of debt and paper that will have to be destroyed still, and a lot of losers will appear. Wages aren't really going up and won't. We are going the way of Japan (20 years of QE and they are still in deflationary morass). Yes we have the continuing creeping inflation that we've always had (not making the water too hot, too fast, to keep the frog from jumping out of the pot) Inflation can't move into high gear unless there is an increase in the velocity of money and that will only happen when the average American knows he needs to get rid of USD as soon as he gets it and convert it into tangibles (I would think that that awareness and action is still a long time coming). Banks and government are in cahoots. Banks don't want inflation as it would destroy all of their loans and cash holdings. They are trying to recapitalize. I wouldn't completely rule out deflation. AIMnoreply@blogger.com