Financial Crisis

[midas]

Told you the subprime would be contained and there would be no problems from it.

.................but i will need to ask you to bend over one more time

[Abrak]

At first glance it might seem rather dysfunctional why a thread devoted to the 'financial crisis' should end up discussing why it really isnt worth the bother of working. Personally I think the two are related. Basically I think that people can spot a system that just isnt working (that is in a state of decay.)

Total individual income tax in the US doesnt cover the defense budget. What is the point? Social security payments wont entitle you to much of a pension. What is the point? Globalization for farang in Thailand means having 8 full time staff rather than a cleaner 5 days a week in London.

The underlying theory of capitalism was first sort of explained through Adam Smith with his pin factory whereby everyone worked together in a mutually beneficial manner to make lots of pins. The consequence of decay is that people increasingly drop out of the system. You increasingly have an overclass who 'work the system' for their own individual purposes (and there is absolutely no moral judgment here because most people who are wealthy and avoid taxes give back to society in one form or another.)

And there is increasingly an 'underclass' (I was reminded of this by something Lanna posted.) SiamAmerican tells everyone to go and get a job and how humbling it was to go from a banker to a pool man but imagine how humbling it is when you cant get a job as a pool man. Globalization must eventually disenfranchise the bottom 10% of the western workforce who are undereducated and unskilled because the job of checking that batteries are put in the right way has gone elsewhere. And you can see it in the numbers. Around half the unemployed are basically unemployable.

And actually 80% of people do not give a shit. And if you do think they give a shit just watch Fox News for 30 minutes. Interviewee 'The Democrats have gone from flooding the shore to threading the needle' (<deleted> is that supposed to mean?) interviewer 'Is this something that the Tea Party can take advantage of?'.)

Look Obama is claiming the moral high ground on economics 'they drove a car into a ditch and want the keys back.' In March 2009 he didnt even acknowledge a ditch and forecast 4.1% growth 2010 and 4.1% growth in 2011 as well as a deficit next year of US$693m. And fundamentally I think financial armageddon, rebellions are far too optimistic, I see depression, disillusion, alcoholism and fragmentation for the disadvantaged.

[BlackJack]

i forgot to self disclose that i dont have dogs, cats, gold fish, kids, watch, jewelery etc.

I found that these things really chew into my portfolio

When i get older and Mr Pink and the twins are no longer important to my life i intend to dump the other non producing asset - the wife/girlfriend.

just kidding

[Abrak]

but here's a bait for you (for future use). my electricity bill may 2010 was 15,690 Baht.

Well you could be being ripped off.

I have suffered much worse one than that in a Bangkok house that I live in part time. However I do think I am being ripped off.

My worst utility is water to a villa with house pool and garden that is not on the mains. But actually these numbers are irrelevent in the scheme of things given no rates or property taxes. I actually find it more annoying that my GF insists on switching things off half the time, like the aircon if the window is open or asking me to switch some nefarious light off in the kitchen when I am going to bed. The whole point of wealth is that you dont have to consider the more mundane things in life.

If you want to save money fly business class or even economy and think of it a bit like actually working.

There is something in everyones genes whereby they will pay Bt5m for a car and then travel an extra 1km to save Bt2 on a litre of fuel. Worst of all they will tell you about it. I would rather discuss Chamlong's achievements as Thai PM than the price of a bottle of Chang.

[midas]

At first glance it might seem rather dysfunctional why a thread devoted to the 'financial crisis' should end up discussing why it really isnt worth the bother of working. Personally I think the two are related. Basically I think that people can spot a system that just isnt working (that is in a state of decay.)

Total individual income tax in the US doesnt cover the defense budget. What is the point? Social security payments wont entitle you to much of a pension. What is the point? Globalization for farang in Thailand means having 8 full time staff rather than a cleaner 5 days a week in London.

The underlying theory of capitalism was first sort of explained through Adam Smith with his pin factory whereby everyone worked together in a mutually beneficial manner to make lots of pins. The consequence of decay is that people increasingly drop out of the system. You increasingly have an overclass who 'work the system' for their own individual purposes (and there is absolutely no moral judgment here because most people who are wealthy and avoid taxes give back to society in one form or another.)

And there is increasingly an 'underclass' (I was reminded of this by something Lanna posted.) SiamAmerican tells everyone to go and get a job and how humbling it was to go from a banker to a pool man but imagine how humbling it is when you cant get a job as a pool man. Globalization must eventually disenfranchise the bottom 10% of the western workforce who are undereducated and unskilled because the job of checking that batteries are put in the right way has gone elsewhere. And you can see it in the numbers. Around half the unemployed are basically unemployable.

And actually 80% of people do not give a shit. And if you do think they give a shit just watch Fox News for 30 minutes. Interviewee 'The Democrats have gone from flooding the shore to threading the needle' (<deleted> is that supposed to mean?) interviewer 'Is this something that the Tea Party can take advantage of?'.)

Look Obama is claiming the moral high ground on economics 'they drove a car into a ditch and want the keys back.' In March 2009 he didnt even acknowledge a ditch and forecast 4.1% growth 2010 and 4.1% growth in 2011 as well as a deficit next year of US$693m. And fundamentally I think financial armageddon, rebellions are far too optimistic, I see depression, disillusion, alcoholism and fragmentation for the disadvantaged.

i am going to capitulate and agree with you

But i just hope whoever ends up in charge in the new " system " they don't take away my

enjoyment i.e. unrestricted international travel but i fear that will not be possible

I cant see them allowing total free movement of people internationally like we had in the " good old days "

[Naam]

but here's a bait for you (for future use). my electricity bill may 2010 was 15,690 Baht.

1. Well you could be being ripped off.

2. I would rather discuss Chamlong's achievements as Thai PM than the price of a bottle of Chang.

1. if i am ripped off than it's by myself because i installed a total 273,000 btu/h cooling capacity (19 units). reason: i did not move to Thailand saving a fistful of millions (Baht) by not paying income tax and then sweat in the heat because i worry about 150k electricity cost per annum.

2. i am not interested in discussing either.

[Naam]

But i just hope whoever ends up in charge in the new " system " they don't take away my enjoyment i.e. unrestricted international travel but i fear that will not be possible

I cant see them allowing total free movement of people internationally like we had in the " good old days "

please elaborate "why".

[midas]

But i just hope whoever ends up in charge in the new " system " they don't take away my enjoyment i.e. unrestricted international travel but i fear that will not be possible

I cant see them allowing total free movement of people internationally like we had in the " good old days "

please elaborate "why".

Naam simply because if things go horribly pear shaped and a new system needs to

“ evolve “ , none of us can possibly forecast what shape a new system would end up taking.

But let’s face it – at times like this ( based on history ) you tend to get opportunistic

people that will step into power if they get the chance and sometimes they have not been so

ermmmm ” philanthropic “.

Take the well known totalitarian regimes from the past e.g. Vietnam,Cuba, North Korea, USSR.etc etc

And look , there have already been some subtle but quite drastic changes even in the

GNoE which is meant to be “ the Land of the Free “ because while people were absorbed watching

" American Idol " and " Dancing with the Stars " I bet few US citizens really understand the

full implications of the Intelligence Reform and Terrorism Prevention Act " which they passed.

People are already put on no-fly lists, unless the US government gives permission for

people to leave-or re-enter-the United States. This Act provides that a carrier

will “ not permit the boarding of a passenger unless the passenger has been cleared

by CBP (Customs and Border Protection)."

No need to remind you which countries in recent history which didn't allow their

citizens to travel abroad without permission.

So I say hope for the best but prepare for the worst.

[flying]

1) Total individual income tax in the US doesnt cover the defense budget. What is the point?

2) And fundamentally I think financial armageddon, rebellions are far too optimistic, I see depression, disillusion, alcoholism and fragmentation for the disadvantaged.

Hey who are you & what have you done with Abrak?

Just kidding

I agree & see a simple solution to #1 you mention above..squash that budget & bring all troops home + fire all contractors ...KBR, Xe LLC aka: Blackwater etc..

But of course the military industrial complex will never stand down.

Whether because of control of various resources worldwide or the old..."money to be made supplying tools of the trade".

Add to that all those unemployed angry military Plus lets not forget there is TERROR hiding in some cave some where

As for #2 I thought you were a lot more optimistic last year?

Edited October 25, 2010 by flying

[Abrak]

1) Total individual income tax in the US doesnt cover the defense budget. What is the point?

2) And fundamentally I think financial armageddon, rebellions are far too optimistic, I see depression, disillusion, alcoholism and fragmentation for the disadvantaged.

Hey who are you & what have you done with Abrak?

Just kidding

I agree & see a simple solution to #1 you mention above..squash that budget & bring all troops home + fire all contractors ...KBR, Xe LLC aka: Blackwater etc..

But of course the military industrial complex will never stand down.

Whether because of control of various resources worldwide or the old..."money to be made supplying tools of the trade".

Add to that all those unemployed angry military Plus lets not forget there is TERROR hiding in some cave some where

As for #2 I thought you were a lot more optimistic last year?

Flying, I was optimistic last year until a rebound from recession was announced. After that all bets were off.

(1) I hate politics. Cameron farting around with cuts is politics. If you want to address the economics of the issues get real. The Fed is playing the hyper inflation growth pretend card because they can but a renewed asset bubble philosophy is pathetic. The UK is doing the responsible card because it sells. It is all political <deleted>. And the problems in the economy are very real. I read a report that a UK aircraft carrier principle threat was terrorists, which is why it needed 6 destroyers to defend it. I will 100% guarantee that if you dont have an aircraft carrier it will not be threatened by terrorists.

(2) Actually you slightly misread me. I was optimistic last year because I was certain in an economic bounce. I am actually quite optimistic short term for various reasons. I see crises as opportunities and more productive than excess growth - best thing that ever happened to Thailand. However there will never be a new system because capitalism is inherent to our basic instincts, a bit like evolution evolves it is not going to be replaced. It is not what we want it but then Jesus and Ghandi had values and were an evolutionary disaster. Natural selection ends not in crisis but adaption and it leaves no room for losers. The first obstacle to capital is labor and that is well gone, the next is Government and they are toast but do not know it yet.

Freedom is like a word like crisis. It cuts both ways. Basic labor has been disenfranchised and castrated, capital has been emancipated. Actually everyone knows that we should support people less fortunate than oneself, it is simply we do not trust Governments to do it for us, with very good reason.

And where I am depressed from last year is that the crisis brought change from people and companies but it brought irresponsibility from Governments and a 'fuc_k you' sign from bankers.

[flying]

Flying, I was optimistic last year until a rebound from recession was announced. After that all bets were off.

(2) Actually you slightly misread me. I was optimistic last year because I was certain in an economic bounce.

And where I am depressed from last year is that the crisis brought change from people and companies but it brought irresponsibility from Governments and a 'fuc_k you' sign from bankers.

Correct & Actually I remember that now..........Yes you were rightfully bullish of a bounce when I saw only further decay. In hindsight I wish I had acted on a couple of things I had considered.

I have to agree 101% with the feelings towards govt & banks.

[Abrak]

I have to agree 101% with the feelings towards govt & banks.

Actually, at the beginning of this thread Alexjah was very upset with everyone who caused the crisis, I am far more upset with Government's and banks as we exit the crisis.

First of all it has been incredibly impressive how the private sector in general has adjusted to the crisis. The debt fueled binge has evaporated, corporates have cut costs and to be honest I believe even the property sector would have close to cleared if the Government hadnt propped it up with artificial low rates. I know that you dont see signs of recovery but corporate sector profit recovery is virtually unparalleled after a financial crisis like this without a devaluation or lowering wages.

In terms of Government - an area where expectations are so low, we expect inefficiency and incompetency, the degree that they have given up all pretence of honesty is depressing. It all started with Saddam, where they could lie and nobody would notice.

AS i pointed out before, Obama's claims to be rescuing the economy are totally and utterly false.

http://www.cbo.gov/ftpdocs/100xx/doc10014/Chapter2.6.1.shtml#1092111

His first forecasts in March 2009 (if you wanted to be depressed you were depressed then.)

4.0% growth in 2011 and 3.6% growth for the next 4 years. He was promising a massive economic recovery - continuous successive years of above normal growth. Now he has simply rewritten history.

Meanwhile the Fed is desperately trying to engineer another debt driven asset bubble. And he is lying too. He just thinks people are stupid. The reason he will not buy US$2bn of treasuries is very simple, noone can tell you what he can do after that.

And really it is the same in the UK. Cutting the budget is a political ploy not an economic policy. And so feebly executed that it couldnt even strengthen the pound. So I do now despise Governments on the basis they simply rearrange the truth.

But I am really pissed off with the banks because they are subtely creating the image they are valuable. I know they are destructive so their losses dont bother me, it is the idea they are actually generating real profits. Noone seems to care HOW these profits are generated and there has been no reform, no regret, just an increase in moral hazard. What they learnt is that there was nothing to learn.

About 3 months ago a Havard Law Professor who is involved in regulating the US banks currently asked me if I could outline the key reforms that had been implemented in Thailand for the banking sector which successfully sailed through the latest crisis. I gave it some thought and to be honest I couldnt really think of any. So I asked a couple of people who are far more knowledgable than me. Noone actually came up with much of significance apart from one guy at the Bank of Thailand who said 'they accepted their responsibility and they realized their mistakes.' To be honest the private sector learnt from their mistakes in the US without a

Law being passed.

And if people believe their might be revolts and revolutions they are sadly mistaken unless they think Governments are going to kill first born sons. Allied Irish literally decimated the Irish economy in a manner unparalleled in history and really noone blinked an eye.

[flying]

------good post snipped to save space-----------------------------

And if people believe their might be revolts and revolutions they are sadly mistaken unless they think Governments are going to kill first born sons. Allied Irish literally decimated the Irish economy in a manner unparalleled in history and really noone blinked an eye.

My goodness your depressing me today

Kidding again.......But that was another good post & all true from my POV too

Especially this last part. I have seen as folks spiral downwards & their not likely to bite the hand that feeds them sadly.....Even if it is the same dirty hand that caused their hunger.

Personally I would be more inclined to a snipers party than a revolution anyway

Edited October 26, 2010 by flying

[cloudhopper]

Here's another interesting view-

http://jessescrossroadscafe.blogspot.com/2010/10/w-e-pollock-pondering-economic-dirt-nap.html

[BlackJack]

I think you (all) need to take stock and decide what side of the fence you are on

ie your a politician or banker

or you are a pleb working on the wheel for the former

schools and universities teach us to be one or the other

the choice is yours

no use complaining because the banks failed and the politicians bailed them out

the trick is to be on the winning side

take your money and live the life you want

one day you will wake up with a health issue and then all the other stuff that clouds your life takes the back seat

[Naam]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

[Abrak]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

Oh and dont forget the management fee on a guaranteed negative real yield.

Also it is worth remembering how the CPI is calculated nowadays. It is designed to give the price increase of a 'constant standard of living'. They make two major adjustments to the old 'basket of goods formula'. One is substitution - price of steak goes up, burgers do not, so you have less steak and more burgers. No problem. The other is 'quality adjustment' if you get 20% more power and memory in a computer for the same price a year later then the price has fallen roughly 20%. This to me is <deleted> because we all make quality adjustments in our own minds - we do not, not buy a computer because we will get 20% more power at the same price next year because we already know that. That is not deflation.

[Abrak]

double post

Edited October 26, 2010 by Abrak

[teletiger]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

Tyler......is that you?

Regards.

[Wrong Turn]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

Oh and dont forget the management fee on a guaranteed negative real yield.

Also it is worth remembering how the CPI is calculated nowadays. It is designed to give the price increase of a 'constant standard of living'. They make two major adjustments to the old 'basket of goods formula'. One is substitution - price of steak goes up, burgers do not, so you have less steak and more burgers. No problem. The other is 'quality adjustment' if you get 20% more power and memory in a computer for the same price a year later then the price has fallen roughly 20%. This to me is <deleted> because we all make quality adjustments in our own minds - we do not, not buy a computer because we will get 20% more power at the same price next year because we already know that. That is not deflation.

Yes, the US gov lies about inflation.

And they also add another trick to keep it lower: Geometric Adjustment.

For example, the price of a loaf of bread goes up 5% in a year.

The gov then takes 1/3 off of the loaf of bread. The now smaller loaf is cheaper, so....inflation - how much a loaf of bread went up, is only 3% now.

[churchill]

GBP getting a nice bounce today after ...

Blast off – UK GDP rocket

http://ftalphaville.ft.com/blog/2010/10/26/382966/blast-off-uk-gdp-rocket/

[teletiger]

And where I am depressed from last year is that the crisis brought change from people and companies but it brought irresponsibility from Governments and a 'fuc_k you' sign from bankers.

I am shocked.....this is unbelievable........but, on the other hand...

The SEC writes to Berkshire asking why $1.87 Billion in stock losses have been omitted from it's accounts.

"We believe it is reasonably possible that the market prices of Kraft Foods and U.S. Bancorp will recover to our cost within the next one to two years assuming that there are no material adverse events affecting these companies or the industries in which they operate."

P.S.....So <deleted> off.

That last bit was mine.

http://www.zerohedge.com/article/berkshire-takes-accounting-rules-its-own-hands-tells-sec-stuff-it

Regards.

[Abrak]

And where I am depressed from last year is that the crisis brought change from people and companies but it brought irresponsibility from Governments and a 'fuc_k you' sign from bankers.

I am shocked.....this is unbelievable........but, on the other hand...

The SEC writes to Berkshire asking why $1.87 Billion in stock losses have been omitted from it's accounts.

"We believe it is reasonably possible that the market prices of Kraft Foods and U.S. Bancorp will recover to our cost within the next one to two years assuming that there are no material adverse events affecting these companies or the industries in which they operate."

P.S.....So <deleted> off.

That last bit was mine.

http://www.zerohedge.com/article/berkshire-takes-accounting-rules-its-own-hands-tells-sec-stuff-it

Regards.

Actually Teletiger, I am not whinging about myself. If someone screws me I take full responsibility because I have enough knowledge that I do not expect to depend on other people.

But in Ireland every single working person is going to have to pay US$30,000 to bail out Allied Irish. I do not care if Berkshire goes bust or whether I invest in it before they do. But it is very wrong.

And you know Teletiger, that Berkshire stated that in its accounts. It is there for people to see who invest but the Irish will just have to suffer and pay for the actions of people they have nothing to do with.

[Abrak]

GBP getting a nice bounce today after ...

Blast off – UK GDP rocket

http://ftalphaville.ft.com/blog/2010/10/26/382966/blast-off-uk-gdp-rocket/

Lets get a little realistic. Last month GB announced a record deficit and this month they announced record spending cuts. They have just achieved 2.8% growth annualized and they need to achieve 5.1% before deficit reductions to meet their target of deficit reductions and annualized growth of 2.8% p.a.

Churchill I know you appreciate the UK's constructive approach to its problems (as opposed to the US ignoring them altogether) but it is a sham when you get down to the details. I am still hopeful that GBP will go up simply to prove how counter-productive any attempt at responsibility will be.

[BlackJack]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

yes up 170% on pure speculation

only one REE mine outside China thats nearly ready to go 2011 and thats in OZ

ride the wave

[Abrak]

"As we reported some time ago, the weird stuff in TIPS land continues, and was brought to the surface during today’s 4 Year 6 Month TIPS auction, which closed at, drumroll, -0.55%. That’s right, a yield of negative 0.55%. This compares to +0.55% in April. TIPS Investors better hope that the CPI eventually captures all the fun that is happening in the Rare Minerals space."

Oh and dont forget the management fee on a guaranteed negative real yield.

Also it is worth remembering how the CPI is calculated nowadays. It is designed to give the price increase of a 'constant standard of living'. They make two major adjustments to the old 'basket of goods formula'. One is substitution - price of steak goes up, burgers do not, so you have less steak and more burgers. No problem. The other is 'quality adjustment' if you get 20% more power and memory in a computer for the same price a year later then the price has fallen roughly 20%. This to me is <deleted> because we all make quality adjustments in our own minds - we do not, not buy a computer because we will get 20% more power at the same price next year because we already know that. That is not deflation.

Yes, the US gov lies about inflation.

And they also add another trick to keep it lower: Geometric Adjustment.

For example, the price of a loaf of bread goes up 5% in a year.

The gov then takes 1/3 off of the loaf of bread. The now smaller loaf is cheaper, so....inflation - how much a loaf of bread went up, is only 3% now.

Actually the trick I seriously do not understand with the CPI is how they account for housing which makes up 23% of the total. Rather amazingly whether house prices go up 30% or down 30% housing CPI seems to be between 1.7% and 2.3% which considering they are trying to maintain CPI at 2% is quite an achievement. How they have managed to produce this figure is beyond me.

[Wrong Turn]

Abrak,

I didn't know housing was in the US CPI calculation. I am confused as well.

[flying]

Abrak,

I didn't know housing was in the US CPI calculation. I am confused as well.

The CPI aka: CP-Lie

The hidden change in prices of housing

In January 1983 housing prices were replaced with owners' equivalent of rent because rents are more stable. Because house prices rose and fell more than rents during the housing bubble and crash, housing's effects on inflation and deflation are not reflected in the CPI.

Also from the CPI site a list of goods & services in the basket...

* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)

* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)

* APPAREL (men's shirts and sweaters, women's dresses, jewelry)

* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)

* MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)

* RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);

* EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);

* OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

Also a side note.... I remember reading somewhere that the CPI changed again in 2009 housing went from 21% to 25% a big jump.

At a time when rents fell....of course.

Yet food & transport was lowered 1% ...I think? Will try to find the article.

Which may be the reason for the lack of change Abrak mentioned

Next data release is Nov 17th 2010

Will be interesting to see what has been shuffled next.

Edited October 26, 2010 by flying

[flying]

The Fed Wants to Unleash a BIG QE 2 Program… But CAN It?

[Abrak]

Also a side note.... I remember reading somewhere that the CPI changed again in 2009 housing went from 21% to 25% a big jump.

At a time when rents fell....of course.

Yet food & transport was lowered 1% ...I think? Will try to find the article.

Which may be the reason for the lack of change Abrak mentioned

Next data release is Nov 17th 2010

Will be interesting to see what has been shuffled next.

To be fair to the BLS they dont lie they simply rearrange the truth. You can see all the unemployment stats and choose what you believe is the true rate of unemployment.

The CPI is designed now to show the cost of a 'standard cost of living'. What people are interested is in their 'cost of living'. So really the CPI understates inflation probably by say 2% per annum (SGS suggests a lot more.) So those TIPs with a negative real yield of -0.55% actually have a negative real yield of say -2.55% in reality.

Now this is a massive achievement especially at very low nominal rates. Usually you need a World War to do this. You can see that people are much more worried about inflation than deflation for good reason. Bernanke is a WMD in the world of inflation. I just dont think it is credible that Bernanke is worried about deflation at this point. Where I disagree with that article is that markets and say gold will collapse if he doesnt QE. Because if he doesnt QE and they fell he would QE.