Posted on 08/16/2009 9:48:06 AM PDT by anonsquared
In recent weeks and months, there’s been much public debate in the financial press whether we’re going to hyper-inflate or suffer a deflationary collapse? I know this to be the case because I field many questions about this topic from readers around the world on a regular basis.
To better understand which of these two competing forces will ultimately win the day, let’s consider the following observable basics:
* In a hyper-inflation, the value of currency [in this case, fiat money] is driven toward zero as prices rise. * In a deflationary collapse, the value of currency increases as prices collapse.
But above all, folks need to understand that inflation and deflation are BOTH monetary events which manifest themselves as a result of changes in the SUPPLY OF MONEY.
snip~ worth the read and check out the charts
(Excerpt) Read more at financialsense.com ...
Thank you for the link, I enjoyed that.
They are much smarter than they look.
Is one a banker?
Is one a banker?
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I’m not sure. “Merle Hazard” is seen on you tube doing different tunes but this is the only one I have seen with the guy he refers to as, “Bretton Woods” holding the fiddle.
>>Don’t tell them where you are!<<
I don’t. I am sufficiently vague. Central Kentucky is a very big place. Of course, if “they” want you bad enough, they can find you, no matter where you are or how little you say. ;)
Although I heartily agree with everything you say, I take exception to your use of words a bit. If someone is buying something, it is, by definition, a “product”. Purchased “necessities” are a subset of “products”.
So if people are only buying food and fuel, then I suppose I would want my money in related stocks...
So the understanding is that what we’re heading for in the immediate future is hyperinflation with deflation, but not both at the same time?
bookmark
Why is this case of "not getting the math" so interesting?
Let's look at a stock, IBM, which has about 1.3 billion shares outstanding. If IBM goes up $1 a share, with 1.3 billion shares outstanding, market cap would increase by $1.3 billion.
Does anyone really think that it would take $1.3 billion of new money, pulled out of money market accounts, to raise the price of IBM stock by $1 per share?
Thanks again for the link. Regardless they are both great.
He has colored it and the Nation “RED”.
My daughter drew a picture for me that I say is worth $10trillion --hey, there goes a $10T 'move' in the art world!
Why take it off the table? If you know it's going to tank in a month or two, it would be a good time to short the S&P or Russell.
Primary Dealers here.
Yes, stocks are considered a decent inflation hedge.
If your retirement money is in a 401K, shorting the market is not an option.
Sure it is. Buy a reverse ETF.
That’s fine, but your post was not geared to 401k’s. It’s so easy to open an account at, say, Scottrade, right now and start making $7 trades. If the market is going to have a “RENDEZVOUS WITH REALITY”, you can short it quite easily and make a handsome profit.
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