DEFLATION is coming , NOT INFLATION - don't be fooled

seems like we've had both since 2008 deflation in houses and inflation in food and gas

more deflation is coming

How did you come to this conclusion? Inquiring minds want to know.

Deflation is caused by most people in a society not having money to buy goods and services.

While that IS possible, more likely though is Obama will keep Bernanke printing money and offsetting that....at least until it all goes to hell in a handbasket one fine morning.


:heliben:

1929 = year of the SNAKE

2013 = Year of the Snake

DEFLATRION

when everyone is betting one way INFLATION , smart people bet the other way DEFLATION -- 1929 = 2013

this actually makes more sense to me tna most CNBC (CNBS) stuff

I agree 100% OP


With DEFLATION the banks get EVERYTHING, juts like 1929

.

"DEVALUATION" (of the US dollar)

............... not deflation.

.

.


BIFLATION

.

both will show up, food gas up. TV's cars ect down

correct

****Exactly***


........... biflation.

Biflation

Biflation (sometimes mixflation) is a state of the economy where the processes of inflation and deflation occur simultaneously.[1] The term was first introduced by Dr. F. Osborne Brown, a Senior Financial Analyst for the Phoenix Investment Group.[2] During Biflation, there's a rise in the price of commodity/earnings-based assets (inflation) and a simultaneous fall in the price of debt-based assets (deflation).[3] The price of all assets are based on the demand for them versus the volume of money in circulation to buy them.

With biflation on the one hand, the economy is fueled by an over-abundance of money injected into the economy by central banks. Since most essential commodity-based assets (food, energy, clothing) remain in high demand, the price for them rises due to the increased volume of money chasing them. The increasing costs to purchase these essential assets is the price-inflationary arm of Biflation. With biflation on the other hand, the economy is tempered by increasing unemployment and decreasing purchasing power. As a result, a greater amount of money is directed toward buying essential items and directed away from buying non-essential items. Debt-based assets (mega-houses, high-end automobiles and other typically debt based assets) become less essential and increasingly fall into lower demand. As a result, the prices for them fall due to the decreased volume of money chasing them. The decreasing costs to purchase these non-essential assets is the price-deflationary arm of biflation.[4]



.

The natural tendency is toward deflation.

However, the Fed knows this, and that it's a threat to the International Banking Cartel, so it will continue to prop up the markets artificially with more and more fake digital money.

This is leading to a trickle down inflation effect in those areas where good & services are essential, and a contraction of things tied to disposable income, as stated above.

Here's an example of what this can lead to:

Stagflation

an inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity.

[link to en.wikipedia.org]

And also:

Cost-Push Inflation

inflation in which prices increase as a result of increased production costs, as labor and parts, even when demand remains the same.

[link to en.wikipedia.org]

depends on item

e.g.

antiques & collectibles: deflation
gold: inflation
food: inflation
gas: could be both
ulilities: inflation

No deflation of houses where I am. They went from $600,000 to $550,000.

Increasing the pool of money will not counter the lack of velocity.

OP has it corrrect. Deflation is a viscious cycle. Less jobs mean less disposable income. Less goods bought means inventory piles up so more jobs need to be cut which inturn decreases disposible income while increases the inventory even more....so morth jobs need to be cut.

Its a spiral to the bottom crashing hard. You cannot eat silver and gold is a true statement in a deflationary enviroment. Keep in mind, cash is king and once the bottom hits then you can swoop up all assests including gold and silver at pennies on the dollar.

We're already in deflation to some degree. After deflation comes hyperinflation.

who cares

anyone who aint broke yet soon will be

Why will the deflationtards will be proven wrong. I will write why this will happen. If any deflationtards disagree with this please dont be a simpleton and just push this aside but respond with some knowledge and thought. Please chime in if you can add to the understanding here. I use the dollar in the description of Credit Default swaps for a basis as they could be denominated in any fiat currency.

Understand that the dollar is the defacto “Reserve currency – Petrodollar” that the world uses to transact business. As that dollar becomes more encumbered with "leverage" its ability to be a store of value has less conviction and faith. The "only" value that a fiat paper currency can retain "is" that conviction and faith.

So, let's look at the reason all faith will be lost in that currency at some point in the future. Since the creation of the FED in 1913 the currency (Dollar) value has been controlled through inflation/deflation. In 1944 the U.S. Dollar through the Brenton Woods agreement was granted “exclusive reserve currency status”.(that status meant that any country wanting to buy oil, food or commodities would have to buy dollars “first” and then they could go into the world market to make their purchase “on” the world market (with those reserve currency notes) also it meant that "If" any country lost faith or trust (through debasement or any other reason) in that currency they could go to "any" central bank in the world and trade that paper currency for physical Gold of equal value.
(Good as Gold) In 1971 Nixon suspended Brenton Woods and took us off the Gold Standard telling other nations that they could not "now" exchange the dollar for Gold as previously promised.

Here is the key to it's downfall:

The U.S. dollar (debt) from 1971 through around 1995 was able to be removed from a balance sheet with little implication through accounting techniques claiming (debt) as a loss and could be written off and that was the end of it.

Here (around 1995) comes Blythe Masters from JP morgan and she creates what is called a "Credit Default Swap" This is essentially an insurance policy on a default to pay back a debt or loan. So, let’s say for shins and giggles Greece is lent 1 trillion dollars by another country. They promise to pay that money back at a set interest rate over time. The CDS (Credit Default Swap) enables financial institutions to purchase a put (Default insurance or a bet against the underlying asset (loaned debt or CDO – Collateralized Debt Obligations) never being paid back. This would be OK if only "ONE PUT" was taken out against the chance of that debt not being paid back. The problem "of the whole planet situation right now" is that this debt can be leveraged by 100 "PUTS" or in layman’s terms (for each dollar that was lent to Greece there are $100 betting against "each" one of the dollars lent, that it will default and not be paid back) So, now you have 100 Trillion dollars leveraged against the default of a 1 Trillion dollar loan. So, now Greece cannot pay back the loan (CDO-debt) triggering the CDS from the default on the CDO and now everyone that bought a "PUT" wants’ to get paid on their bet. The next problem is that those financial institutions that sold those "PUTS" are only required to have a 6% reserve (Money held in escrow to pay claims) So, in reality those institutions only have .06 cents per dollar to pay those claims and not the “whole” dollar "required or needed" to pay those claims.

This is why all of these bailouts are created so "NO ONE" is allowed to fail "Triggering" these Credit Default Swaps. The original debt is maintained through interest payments from "newly created" debt (bailouts) because the money to pay those claims does not even exist.........Yet.
So, you say why can’t they just unwind them.
Answer, is that you can't because everyone that purchased these "PUTS" on “CDO’s” wants’ to get paid because they are classified as an asset on "their" balance sheets.

When the discussion turns to CDS/CDO's at parties, I ask if anyone can explain them so that we can have an educated discussion. No one can, so I give this analogy and everyone sees a little better what the problem is. I know it's not a perfect description but conveys the basis.
Previously posted on ZH;
So, GK wants to buy a house, so GK goes to Joe banker and says hey Joe can you lend me a 100K to buy this house. Joe says sure GK here is your 100K you can pay me back over time with interest.
Then Joe gets back from the closing and says to himself, Hey "what if GK doesn't pay me back, I will be out a 100K. So, Joe calls Allstate and talks to Al the broker and says, "Hey Al I want to buy a 100K insurance policy incase GK doesn't pay me back. Al says sure Joe here is your 100K default insurance policy (CDS). Then after Al gets off the phone with Joe, Al says to himself "wait a minute" "what if Joe doesn't pay me back" and Al quickly calls jerry at AIG and says hey jerry I need an insurance policy for 100K incase Joe doesn't pay me back. Jerry says sure Al here is you CDS for 100K incase Joe the banker doesn't pay you. Then Jerry gets off the phone with Al and says "wait a minute" "What if Al doesn't pay me back and then he quickly calls Zurich and talks to Chad and says "hey Chad" "I need to purchase a 100K policy against Al not paying incase GK defaults on his mortgage. Chad says here you go Jerry a 100K CDS for you and the Chad says to himself......................................................​.........you see were this is going.
So, let’s say this goes 20 CDS contracts deep. So what we have is 2,000,000 dollars worth of credit default swaps written on a (CDO) 100K depreciating asset that is now only worth 60K. Now the leverage went from 20 to 33 because of the deflation in the housing prices. (That’s why there is no mark-to-market)
Now GK's employer just called and is laying GK off "permanently".
The problem is now that the financial institutions that wrote all these CDS's (a ton of American banks) were only required to have a 6% reserve on this 100K worth of exposure (each). So, you see the money does not even exist-yet (our anti deflationary kryptonite backstop and tribute to JS for the saying "QE to infinity") to pay these claims and all these entities must be bailed out to stop the contagion before wiping out everybody.

I used a house as an example and it actually is a physical asset. Most of the CDO's are written against debt (paper, but classified as an asset on balance sheets with "no" underlying physical nothing) Here is where the problems lay. The “DEAL” that they are trying to close is a perfect "orderly" transaction with a 70% haircut (what is perfect and orderly in a panic once these start triggering). It's the reserve of 6% that is the problem. Let’s take our old friend JPM that has a leveraged balance sheet of 44 to 1. If they are in the wrong chain position on the CDS loop and let's say that they have to pay out 5x of that leverage but only receive 2x of the leverage back. ???????????????????

Where does the money come from to pay that net 3x's exposure? (it does not exist...yet, remember the 44 to 1 leverage) hence the bailouts to keep this thing from going full balls out.

There it is, and it's called "Contagion"

So any deflation will trip the balance sheets into default causing the printing of currencies to try and save the system. (Remember that money does not even exist "yet" to honor or pay the CDS insurance claims as it must be printed into existance)
This can be proven by the labeling of the 70% haircut on Greece’s debt not being classified as a default, hence delaying the massive printing of money to honor them.

Hyper-Inflation

deflation is here decades of past inflation assure that

you cant blow up a balloon forever
even a 5 year old understands that

DEFLATRION rides!

I have a feeling energy will be in inflation as well as food and cheaper consumer goods.

Big expensive items, cars, houses, computers will be in deflation.

This would make those with money more wealthy and those without even poorer.

agreed !

More like big expensive items will stay flat or rise modestly compared to smaller items.

Helicopter Ben will see to it.

Right Again!!!

BI-FLATION

.

as less and less buy the expensive items they will stop making them. You can only sell so many !

Who cares? The only reason you want a correct technical prediction is that so you know where to place your "money" for investments.

Well, "money" as you have learned to think about it has been destroyed, following that "credit" as you have learned to think about it is currently being destroyed. That is, what you will be doing in the future at some point when this system is no more, is barter. Better to learn to haggle.