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overtheedge
Membre depuis mai 2012
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The Dollar is Going Up - Keith Weiner - Keth Weiner

"My definition of deflation is a forcible contraction of credit. It is not the shrinking number of dollars (if the number is even shrinking). "

It would be far more honest to state "forcible contraction of credit" or "substantial reduction in the velocity of money."

The central bank and government can no more deflate or inflate the economy than I can. But either, usually both, can and do effect the economy by increasing the amount of money and money substitutes readily available for circulation. There is more money in circulation now than at any time in history, but world-wide, the economy is in the dumpster aka depressed.

Your false reading on commodities is unrealistic due to being just a price snap-shot and fails to account for demand. Supply/demand curves MUST consider capital available for the purchase. If the consumer has no disposable/discretionary income, they are NOT in the supply/demand equation. As inventories increase, production must fall unless the producer has substantial assets to cover costs. Reduced production means reduced labor costs. Vicious circle completed.

There is no shortage of credit. There is almost no credit available for high risk borrowers. This is normalcy. If your brother-in-law rarely pays you back and never on time, you don't loan him any more money. This is NOT deflation. If a large segment of the population can't pay you back loaned monies, you don't loan them any more money. This is NOT deflation.

Coming back to commodities, the pricing is at the wholesale level. The actual sale price could be less than the cost of production. The producer could be just cash short and has a note due. If entire segments of the consumer base have little to no disposable/discretionary monies, a lot of products manufactured from these commodities is not sold. This is called over-production. This is NOT deflation, but rather a depressed segment of the economy.

Trotting out charts as evidence of future trends is no different that reading goat entrails to predict the future. Our economy is in the shape it is in just because of reading goat entrails and the public believing it. This same public sends some of their members to make political decisions based upon goat entrails.
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Economics is not hard to understand. Even stupid animals understand it. You must consume more energy than you expend. Failure equals death. Credit is higher burn rates than normal in hopes of greater rewards. Every additional minute of chase increases risk. Pack animals act as their own bankers. Shared risk offers shared potential rewards. Only economists and politicians attempt to take such simplicity and turn it into a pseudo-science.
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Everything is connected to everything.
Everything has to go somewhere.
There ain't no such thing as a free lunch. TANSTAAFL

No just some good ideas, talking points or subject to negotiation, but the "LAW".

Commenté il y a 4128 jours

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Début de l'article :Let's take a look at a few graphs of the dollar, from Feb 1, 2013 through Friday May 17, 2013. Yes, I said graphs of the dollar. I've priced the dollar in gold first (of course), then silver, the euro, and even the yen. The pattern is obvious. The dollar is going up. I did not show copper, lumber, or wheat though they show the same trend. These commodities are not money, of course. My point is simple. It's not gold that is going anywhere. In past articles, I've used the analo... Lire la suite

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