When will we get the next stimulus?
Before the end of the year?
Is the stimulus 'jig' up and time for us to 'take our medicine.'?
Down, down down?
And, what does deflation mean to us on a personal, household level? What should we expect to see? Anything we can/should do now?
Not by the hair of a politicians chinny, chin, chin!
Sure, we'll see an occasional upside fake so the big institutions can try to get out, but deflation and cash are KING.
Gold at $1200 by the end of the year...and $600 by the end of 2012.
The Fed is not capable of injecting enough money into the economy to create real demand inflation unless they issue a check for $10k or more to every man, woman and child in the country. Even then many folks would pay debt and save it rather than spend it.
The Velocity of Money is in the toilette taking the Fed out of the game.
Debt Deflation on a scale nobody alive has ever seen before.
Daily. The Fed is trying to stimulate inflation daily, and failing just as badly as Japan which has been trying to gin up inflation there since 1989.
The money supply is all cash plus all credit. The problem with printing money in a credit-based economy is that it destroys leverage as private credit disappears commensurate with the money-printing.
Bankers, after all, don't want to lend today's valuable Dollars only to be repaid in debased currency next year.
Now, after you've destroyed all private credit availability, then yes, further money-printing would cause inflation because you would no longer have a credit-based economy.
Keep in mind, however, that our economy is 90% credit and 10% cash. You'd have to destroy 90% of the wealth in the U.S. first before even more money-printing would finally resemble Zimbabwe.
That's unlikely to happen as Revolutions are fought over much less.
In the meantime, money-printing simply dries up private credit.
Japan has printed far more money than has the U.S., and Japan has been doing it every year since 1989.
It's never worked. You don't get stimulus from money-printing in a credit-based economy.
Credit is the missing ingredient to the current global crisis soup. Destroying credit causes deflation. The yen, for example, is up.
Modern economists can't explain why the Yen is up after so much Japanese money-printing. They cite ridiculous things like export-economy, shrinking population, and a culture of savings even though the U.S. saves more than Japan (and has since 1999) and even though the Japanese are net importers from China now.
What the pin-heads can't grasp is the missing ingredient: credit.
Everyone sits around *wishing* that magic printing presses can stimulate global economies without anyone having to suffer any financial pain.
It's a fairy tale that has failed every year since 1989.
Government printing presses, whether running raw or via the convenient fiction of “borrowed” money, trigger deflation up until all private credit is destroyed.
Of course, at that point entire economies are vaporized and you are left with a Zimbabwean wasteland of a cash or barter economy.
Print money at your own peril; it won't stimulate. It won't solve the current global crisis.
On the contrary, printing more money will exacerbate the economic downturn.