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touchring
06-13-09, 05:24 AM
Inflation in the news, inflation is now talk of the town, but how could inflation rise so rapidly after we had just experienced massive deflation? This is my take-

After the great collapse of the Chinese stock markets and export manufacturing sector, and still no Tiananmen 2.0, the Chinese are now putting their minds into getting rid of the dollar they hold, buying up as much natural resources and natural resources companies, driving up the prices of everything.

The Chinese has gained an upper hand in this interdependent relationship. The US is now more dependent on the China than China is dependent on American imports.

Bernanke is now in trouble.

sandwind
06-13-09, 07:18 AM
Bernanke is now in trouble.

Even when dollar became worthless in one day I am sure Bernanke will be fine;)

touchring
06-13-09, 08:27 AM
Even when dollar became worthless in one day I am sure Bernanke will be fine;)


Provided the retiring babyboomers don't go after him after they discovered their 401(k) shrunk in value and is going to last only a few years. So, there will be no retirement after all.

sandwind
06-14-09, 07:08 AM
They will probably end like this as goverment is responsible for covering thier ass

<embed src="http://videos.caught-on-video.com/vidiac.swf" FlashVars="video=d02f7beb-61a7-403c-9606-984c0000d5d8" quality="high" bgcolor="#ffffff" width="428" height="352" name="ePlayer" align="middle" allowScriptAccess="sameDomain" type="application/x-shockwave-flash" pluginspage="http://www.macromedia.com/go/getflashplayer"></embed>

I hope they will get Bernanke even if this doesn't look as real possibility to me.

johngaltfla
06-14-09, 11:37 AM
Inflation in the news, inflation is now talk of the town, but how could inflation rise so rapidly after we had just experienced massive deflation? This is my take-

After the great collapse of the Chinese stock markets and export manufacturing sector, and still no Tiananmen 2.0, the Chinese are now putting their minds into getting rid of the dollar they hold, buying up as much natural resources and natural resources companies, driving up the prices of everything.

The Chinese has gained an upper hand in this interdependent relationship. The US is now more dependent on the China than China is dependent on American imports.

Bernanke is now in trouble.

The problem Bernanke faces is now is he promised when he was appointed to support the positions in his numerous papers on the Great Depression and understanding of Fed monetary policies during that 1930's. He has no choice but to continue inflating or he faces the daunting problem of a political solution to a monetary problem. Thus he has to become the creditor of last resort while monetizing all of the dying debt instruments or the United States ceases to function at every level.

We are in the midst of the first rollovers from the patchwork solutions that were implemented last year. Everyone in the Bubblemedia would have you believe that Bear Stearns and Lehman are long over with and gone but in reality the crap trail they have left behind will take years to clean up.

And that does not include AIG, Freddie and Fannie. Thus the process of monetizing and socializing the losses must continue or we will start seeing economic contraction at a 10 - 15% plus pace which will result in massive retribution from the current administration and the political cronies in D.C. Unless the Federal Reserve wants to open Pandora's box by standing fast, they face the prospect of an angry legislative branch opening hearings to 'revise' the Federal Reserve Act and in fact proceeding with a de facto nationalization of the Fed.

Care to wager who wins that battle? My money is on the guys with the IRS, guns and tanks on their side......

c1ue
06-14-09, 12:24 PM
I'm not so sure of China contributing the US inflation so much as China contributing to higher interest rates.

Specifically the reversal of Greenspan's 'savings glut' which was keeping interest rates lower than they 'should have been' - the reversal of MBS, CAD, and equity flows means interest rates now could stay higher than they should - in turn keeping housing down and the economy prostrate.

touchring
06-14-09, 12:35 PM
I'm not so sure of China contributing the US inflation so much as China contributing to higher interest rates.


u will feel it when you pump gas. it's not much, but it's still inflation. :D

johngaltfla
06-14-09, 03:54 PM
I'm not so sure of China contributing the US inflation so much as China contributing to higher interest rates.

Specifically the reversal of Greenspan's 'savings glut' which was keeping interest rates lower than they 'should have been' - the reversal of MBS, CAD, and equity flows means interest rates now could stay higher than they should - in turn keeping housing down and the economy prostrate.

Actually China did demand it when their FRE/FNM paper was to be sold back and it received 'no bids' thus the Fed having to monetize all of those securities....then again, we asked for it by allowing these instruments to be created without proper oversight.

Finster
06-26-09, 12:16 PM
Inflation in the news, inflation is now talk of the town, but how could inflation rise so rapidly after we had just experienced massive deflation?

Simple. Create $2,000,000,000,000 from nothing.


This is my take-

After the great collapse of the Chinese stock markets and export manufacturing sector, and still no Tiananmen 2.0, the Chinese are now putting their minds into getting rid of the dollar they hold, buying up as much natural resources and natural resources companies, driving up the prices of everything.

The Chinese has gained an upper hand in this interdependent relationship. The US is now more dependent on the China than China is dependent on American imports.

Bernanke is now in trouble.

That's past inflation coming out of storage. In order for China to have acumulated all those dollars, they had to first be created. That's what happened during most of the 1990s and 2000s. Now that the Chinese have about as much dollars as they can stand, any new supply - and perhaps even some of that accumulated horde - quickly finds its way into prices.

touchring
06-26-09, 12:24 PM
I don't know if it would be that simple, a lot of weird things happening these days. The firewall software, the flu, the nuclear testing by the north koreans. I think the North Koreans are going do something big this time, and the Chinese might have gave the go ahead.

Finster
06-26-09, 01:06 PM
Of course it's that simple. Econ 101. Supply and demand. Increase the supply of something, and its market value falls. Dollars are no different in this respect.

Except when the value of dollars falls, we notice it as an increase in prices. Since we use dollars for our unit of pricing, one dollar always equals one dollar, so if we want to measure the change in the value of dollars, we have to use other stuff.

Ibsen
06-26-09, 02:34 PM
I

Bernanke is now in trouble.

Hello.
This is my first post.
I'm writing from Switzerland.
Been reading for a while and enjoying it. Thanks.

Now to what could (should?) happen to Ben:
"A group of wealthy pensioners have been accused of kidnapping and torturing a financial adviser in Germany after he lost 2 million of their savings in the financial crisis." :eek:

http://www.telegraph.co.uk/news/worldnews/europe/germany/5612006/Pensioners-kidnap-and-torture-financial-adviser.html