Hyperinflation Does Not Arise From Too Much Bank Lending.

[flying]

Every hyperinflation starts with a severe shortage of the very currency that hyper inflates. They don't just start monetizing debt out of the blue for no reason.

how long will it be before we start seeing signs of hyperinflation ? are we talking just months or is it years away?

Folks said it was crazy when this talk started last year.

Many ran & pulled IRA's & 401K's

Now it seems many are not able to pull 401K's as companies lock them down.

Seeing these articles makes me wonder if they will in fact go forward with it.

Ties in with what Sokal is saying about the shortage

Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says

Commentary

401k/IRA Screw Job Coming?

Familiar?

Argentina seizes pension funds to pay debts. Who's next?

[midas]

Folks said it was crazy when this talk started last year.

Many ran & pulled IRA's & 401K's

Now it seems many are not able to pull 401K's as companies lock them down.

I just have great difficulty imaging how this scenario of hyperinflation actually comes about this time.

- shadow-banks no longer exists and the normal banks aren’t lending so how will all these dollars flood the system ?

I could see maybe inflation in food and clothing but still no any sign of salary increases

and with the flood of homes now to hit the market because of the option ARMS starting to become due

no inflation with homes either.

[lannarebirth]

Commentary

401k/IRA Screw Job Coming?

This wouldn't surprise me at all, as it would appear to be one of the few ways out if borrowing continues at present levels. I would have guessed some sort of mandate to banks to hold treasuries as reserves first, but that's probably coming too.

[AlexLah]

Once countries start sending back their Dollar reserves then you might see hyper inflation. For now we just see a gradual decrease of the value of the Dollar (for example) over time. Food prices are likely going up when looking at shortage in supply due to weather conditions, India is a good example. When house prices go down due to people working less hours so earn less and there are more people that compete for less jobs that is deflationary.

People earn less so they can spend less unless prices come down or leverage standards for lending are increased.

If the world decides to stop buying US debt and decides to dump their US dollar reserves into the market we might see something.........

Sorry if it does not make sense, had two wikkies....

[trogers]

More than a year after the "governments are spending like crazy", and "the governments have turned on the printing presses", where is the inflation? Where is the "hyperinflation"? Jeez, when you use the prefix "hyper", you sound hormonal and hysterical.

Didn't happen this time round because some smart joe came up with a plan and diverted the surplus cash into the gold market. Look at gold prices and you see the 'hyper' you are looking for...

[Naam]

Great stuff, some of you guys could argue about two flys on a wall.

and then argue for days whether the flyshit is part of the global crisis or an insignificant natural byproduct

[flying]

Commentary

401k/IRA Screw Job Coming?

This wouldn't surprise me at all, as it would appear to be one of the few ways out if borrowing continues at present levels. I would have guessed some sort of mandate to banks to hold treasuries as reserves first, but that's probably coming too.

Agreed

[sokal]

Folks said it was crazy when this talk started last year.

Many ran & pulled IRA's & 401K's

Now it seems many are not able to pull 401K's as companies lock them down.

I just have great difficulty imaging how this scenario of hyperinflation actually comes about this time.

- shadow-banks no longer exists and the normal banks aren’t lending so how will all these dollars flood the system ?

I could see maybe inflation in food and clothing but still no any sign of salary increases

and with the flood of homes now to hit the market because of the option ARMS starting to become due

no inflation with homes either.

You just said exactly what this article is explaining is false. IT DOES NOT MATTER IF BANKS ARE NOT LENDING. It is all to do with central banks buying government debt. Look at all the bad economies of the world that have double digit inflation.

[sokal]

Once countries start sending back their Dollar reserves then you might see hyper inflation. For now we just see a gradual decrease of the value of the Dollar (for example) over time. Food prices are likely going up when looking at shortage in supply due to weather conditions, India is a good example. When house prices go down due to people working less hours so earn less and there are more people that compete for less jobs that is deflationary.

People earn less so they can spend less unless prices come down or leverage standards for lending are increased.

If the world decides to stop buying US debt and decides to dump their US dollar reserves into the market we might see something.........

Sorry if it does not make sense, had two wikkies....

The US govt deficit which has been funded by the printing press has doubled. Has anyone read the original article ? Did it say anything in it about leverage and people earning less in it ? no

[cloudhopper]

While hyperinflation is indeed caused by excess money creation by the sovereign, the garden variety is usually caused by too much bank lending. Research by Australian economist Steve Keen has shown that banks essentially create money as they loan it into existence without deducting it from anyone's account. Fiat fractional reserves are then created after the fact. The shadow economy has created liabilities exceeding recent fiat creation by a factor of ten, and it remains to be seen if the (global, collective) state can continue to successfully avoid a monetary crisis via greater deficits, market manipulation, abandoning accounting standards and fiat creation.

[midas]

The shadow economy has created liabilities exceeding recent fiat creation by a factor of ten, and it remains to be seen if the (global, collective) state can continue to successfully avoid a monetary crisis via greater deficits, market manipulation, abandoning accounting standards and fiat creation.

Yes thank you cloudhopper.

This is exactly the point which doesn't seem to be addressed very often.

[flying]

While hyperinflation is indeed caused by excess money creation by the sovereign, the garden variety is usually caused by too much bank lending. Research by Australian economist Steve Keen has shown that banks essentially create money as they loan it into existence without deducting it from anyone's account. Fiat fractional reserves are then created after the fact. The shadow economy has created liabilities exceeding recent fiat creation by a factor of ten, and it remains to be seen if the (global, collective) state can continue to successfully avoid a monetary crisis via greater deficits, market manipulation, abandoning accounting standards and fiat creation.

We should not be surprised that currency created out of thin air/slight of hand can go poof

It was never there to begin with

[lannarebirth]

More than a year after the "governments are spending like crazy", and "the governments have turned on the printing presses", where is the inflation? Where is the "hyperinflation"? Jeez, when you use the prefix "hyper", you sound hormonal and hysterical.

Didn't happen this time round because some smart joe came up with a plan and diverted the surplus cash into the gold market. Look at gold prices and you see the 'hyper' you are looking for...

It's a good point. When excess liquidity goes into things no one really needs, like Gold or Tech stocks, there isn't much fallout when it comes undone. Houses though, that's a problem.

[midas]

More than a year after the "governments are spending like crazy", and "the governments have turned on the printing presses", where is the inflation? Where is the "hyperinflation"? Jeez, when you use the prefix "hyper", you sound hormonal and hysterical.

Didn't happen this time round because some smart joe came up with a plan and diverted the surplus cash into the gold market. Look at gold prices and you see the 'hyper' you are looking for...

It's a good point. When excess liquidity goes into things no one really needs, like Gold or Tech stocks, there isn't much fallout when it comes undone. Houses though, that's a problem.

So then even if Bernanke prints a few trillion extra this would be trivial if there is a big black hole in the

residential and commercial real estate markets - estimated to be worth about $ 24 trillion ?

http://www.allbusiness.com/real-estate/com...11415688-1.html

http://answers.yahoo.com/question/index?qi...02072416AAcwxPe

[sokal]

While hyperinflation is indeed caused by excess money creation by the sovereign, the garden variety is usually caused by too much bank lending. Research by Australian economist Steve Keen has shown that banks essentially create money as they loan it into existence without deducting it from anyone's account. Fiat fractional reserves are then created after the fact. The shadow economy has created liabilities exceeding recent fiat creation by a factor of ten, and it remains to be seen if the (global, collective) state can continue to successfully avoid a monetary crisis via greater deficits, market manipulation, abandoning accounting standards and fiat creation.

state can continue to successfully avoid a monetary crisis via greater deficits,

What are people smoking when they read this tread ? Read the article

[sokal]

The shadow economy has created liabilities exceeding recent fiat creation by a factor of ten, and it remains to be seen if the (global, collective) state can continue to successfully avoid a monetary crisis via greater deficits, market manipulation, abandoning accounting standards and fiat creation.

Yes thank you cloudhopper.

This is exactly the point which doesn't seem to be addressed very often.

People don't seem to understand the original post for some reason.

For those who do, check this out. From ZH-

The ultimate simplification: In calendar (not fiscal) 2009, the US grew its budget deficit by $1.47 trillion. In the same time, the Federal Reserve grew its securities holdings from $500 billion to $1.85 trillion, a $1.34 trillion increase. Keeping it simple: 91% of the budget deficit increase in 2009, under the authority of President Obama, was funded by the... United States.

[sokal]

[flying]

Speaking of Japan...........

A global fiasco is brewing in Japan

Edited January 13, 2010 by flying

[Naam]

Speaking of Japan...........

A global fiasco is brewing in Japan

yep! i see that fiasco brewing since 20 years, 1 month and 12 days. YAAAAWWWWNNNNN.....

[Naam]

Commentary

401k/IRA Screw Job Coming?

This wouldn't surprise me at all, as it would appear to be one of the few ways out if borrowing continues at present levels. I would have guessed some sort of mandate to banks to hold treasuries as reserves first, but that's probably coming too.

Agreed

OHMYGOSH! are you trying to tell me that my life savings which are all in a tax deferred 401k are not safe?

[flying]

OHMYGOSH! are you trying to tell me that my life savings which are all in a tax deferred 401k are not safe?

trying to fool us into thinking you would use such a thing as 401k & secondly trying to fool us that you would pay taxes & needed tax deferred..

Edited January 13, 2010 by flying

[Naam]

OHMYGOSH! are you trying to tell me that my life savings which are all in a tax deferred 401k are not safe?

trying to fool us into thinking you would use such a thing as 401k & secondly trying to fool us that you would pay taxes & needed tax deferred..

are you insinuating that i'm a goddàmn liar Flying?

[flying]

OHMYGOSH! are you trying to tell me that my life savings which are all in a tax deferred 401k are not safe?

trying to fool us into thinking you would use such a thing as 401k & secondly trying to fool us that you would pay taxes & needed tax deferred..

are you insinuating that i'm a goddàmn liar Flying?

Quite the opposite Herr Naam

I am insinuating your quite capable at what you do.

[sokal]

QUOTE (Naam @ 2010-01-14 03:10:34) QUOTE (flying @ 2010-01-13 22:55:52) QUOTE (Naam @ 2010-01-13 20:24:29) OHMYGOSH! are you trying to tell me that my life savings which are all in a tax deferred 401k are not safe?

trying to fool us into thinking you would use such a thing as 401k & secondly trying to fool us that you would pay taxes & needed tax deferred..

are you insinuating that i'm a goddàmn liar Flying?

Quite the opposite Herr Naam

I am insinuating your quite capable at what you do.

it looks like some people like 12todrink more need to revisit this thread