This is the main flaw in the Inflation to infinity and beyond case.
"The point is that the central bank, not the public, has always been and always will be the engine of inflation."
Consumers use their current income which is mostly previously manufactured money or an asset/equity which is inflated in price by previously requested money as collateral for their request of a commercial bank to manufacture new money. Once a consumer has requested all they can request...they are finished. Maxed out.
Once all the consumers in an economy have requested the maximum potential monetary inflation...that's it.
Inflation greater than previous inflation to maximum potential is what you all call Inflation
Inflation less than previous inflation to maximum potential is what you all call deflation.
Forever...Inflation to maximum potential is followed by deflation to maximum potential is followed by inflation to maximum potential is followed by deflation to maximum potential...Forever
The infinite inflation wave. It looks like the below.
10 Inflate greater than previous inflation.
20 If maximum potential inflation greater than previous inflation has been reached goto 30 else goto 10.
30 Inflate less than previous inflation
40 If maximum potential inflation less than previous inflation has been reached go to 10 else go to 30.
The above program has no beginning and no end and is always running and ultimately it can never be stopped (destroyed).
Inflation is finite and fragile. It's a variable. The power that sustains it is a constant.
The key flaw ultimately is that there is no interest attached to GOLD so tales of $10,000 an ounce gold are needed to sustain interest and to back that up, belief in the magic printing press of infinite inflation lie is required.
The Central Bank facilitates requests of commercial banks for liquidity. When consumer requests dry up...commercial bank requests for the FED to supply liquidity dry up.
There is nothing the FED can do once the consumers have requested all they can request.
Just like a horse ridden to exhaustion...The rider can dismount and whip it to death if they choose to do so. The horse is not going to budge.
No money is given away for free. There is interest attached.
From 1790 to 1964 or 174 years...1 Trillion dollar total money (debt) supply.
From 1964 to 2000...25 Trillion dollar total money (debt) supply.
From 2000 to now...49 Trillion dollar total money (debt) supply.
Even if rates cave to new lows, I doubt there is enough volume to sustain the required amount of debt inflation. And rising rates would lead to rapid volume dry up.
I'm talking about the point at which the money/debt supply can not inflate any more...
When that point is reached the fantasy world you live in implodes...poof.
Consumers use their current income which is mostly previously manufactured money or an asset/equity which is inflated in price by previously requested money as collateral for their request of a commercial bank to manufacture new money.
Stages of a compounding interest commercial banking monetary system is...
Stage 1. Inflation of debt and the destruction of savings.
stage 2. Deflation of debt and the destruction of equity.
Stage 3. Bankruptcy of the banks, collapse of the economy/division of labor, and the consolidation of power.
The USA has been in stage one for decades.
The bond market sets rates...The FED follows along. But there are the primary dealers...or Gang of 22.
The markets are abominations...Greater fool games...
The NYSE started in at the Tontine Coffee-House. The first Shares were sometimes traded on the sidewalk in front of It. It's like a back alley game of craps that went insane.
"The origin of the NYSE can be traced to May 17, 1792 when the Buttonwood Agreement was signed by twenty-four stock brokers outside of 68 Wall Street in New York under a buttonwood tree. On March 8, 1817 the organization drafted a constitution and renamed itself the "New York Stock & Exchange Board". This name was shortened to its current form in 1863. Anthony Stockholm was elected the Exchange's first president"
The first Banknote issuing commercial bank appeared in the USA 1681...
The first central bank in the USA? (Counting the Bank of North America as the first central bank the FED is the 4th central bank of the USA).
The Inflationary phase is they who gain the most win.
The Deflationary phase is they who lose the least win.
Turning into a skeleton...That is generally considered a loss.
This system you are all in is not, was never, and never will be sustainable in the long term. Nobody cares about the future much. They just cry about it when they get there.
It appeared to be a good idea at the start of the march to doom with glee because at the start the future always looks bright.
It never looks dark except to those who know what's going on but they are just called negative thinkers and ignored. The just think positive and ignore the negative religion has a negative consequence that is of course ignored.
The system is ultimately a mass delusion.
A collapse in psychology can wipe it out at any time reguardless of what mechanical operations take place.
Like right now...If the majority were to think...Oh my GOD the economy is going to collapse I better get lean and mean.
The system would pop like a soap bubble.
In the 1970's the inflation was trapped in the USA. Bretton woods set up the USA as the demand in 1944 with everone else the supply...The USA the Supply of money and everyone else the demand for it in exchange for cheap raw materials.
The global system inflated out of the rubble of WW2 which was the climax of the 1933-1945 bankruptcy reorganization of the now 314 year old global system.
Once everyone was rebuilt they all began expanding all their economies. Excess supply dried up...cheap raw materials dried up.
Increasing the the amount of money that was required to obtain them...
Consumers request commercial banks to manufacture money...In a compounding interest commercial banking monetary system. Consumers use their income which is mostly previously manufactured money or an asset/equity that has been inflated in price by previously manufactured money as collateral for their request of a compounding interest commercial bank to manufacture new money.
"The process by which banks create money is so simple that the mind is repelled."
--John Kenneth Galbraith
Note the FEDERAL RESERVE calls "Money" "credit" and the Total credit market debt is the Money supply of the USA.
“The study of money (Power), above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.”
--John Kenneth Galbraith
In the Inflationary phase gains are overvalued while in the deflationary phase losses are overvalued.
In the deflationary phase there is the Liquidatee an the Liquidator.
In the inflationary phase there is the asset and the owner.
The inflationary phase inflates greater than previous inflation to maximum potential.
Then inflation becomes inflation less than previous inflation to maximum potential or the deflationary phase.
Assets begin transforming into unfundable liabilities or Liquidatees and Owners begin transforming into Liquidators.
Turning into a skeleton...That is generally considered a loss.
We are all survivors of the many previous deflationary phases of the infinite inflation wave. If we were not we would not be interacting. We would be skeletons.
Inflation greater than previous inflation to maximum potential is what you all call inflation.
Inflation less than previous inflation to maximum potential is what you all call deflation.
Inflation greater than previous transforms into inflation less than previous at maximum potential and then inflation less than previous transforms into inflation greater than previous at maximum potential.
The infinite inflation wave.
Inflation is a variable...The power that sustains it is a constant.
Maximum potential is infinite and indestructible. It's a barrier and on the other side of it all is finite and fragile.
The Universe is on the other side of the barrier. Your awarenesses of the Universe are not in the Universe.
The barrier does not exist in your minds.
I account for it...none of you do.
You all are basically running in terror from that which you are going to smash into.
Truth is infinite and indestructible. Truth is a constant.
Everything else is a variable.
The constant decides the fate of the variables.
In the deflationary phase there is the Liquidatee an the Liquidator.
In the inflationary phase there is the asset and the owner.
The inflationary phase inflates greater than previous inflation to maximum potential.
Then Inflation becomes Inflation less than previous inflation to maximum potential or the deflationary phase.
Assets begin transforming into unfundable liabilities or Liquidatees and Owners begin transforming into Liquidators.
I have, due to failure to account for the constant, been liquidated twice. But for a finite and fragile amount of time. In the real world it is quite easy to turn into a skeleton by failing to account for the constant.
Truth.
Most of you undervalue the constant and overvalue variables.
It is an ancient accounting irregularity.
Top lives off the yield from the bottom...That is the system.
A horse can be ridden to exhaustion...The rider can dismount and whip it to death if they choose...The horse won't budge once it's reached maximum potential...
I'm well aware of how numbers work...Zero is nothing....adding more zeros onto the ends of numbers is adding nothing.
Whether a paper clip is 1 cent or 1 Trillion dollars it's still a paper clip.
A well rested horse is not an exhausted horse.
And an exhausted horse is zero.
Top lives off the yield from the bottom.
When the yield from the bottom to the top becomes zero...The top goes nowhere.
The top needs to find a well rested horse to ride...You can add as many exhausted horses to the equation as you want...You are not going anywhere.
interesting stuff, and good points made. however, like many, you manipulate in the same vein of the fed reserve (ie, the people you rail against). pointing out the truth is no proof of your own significance...and neither is posting with a 4-word name. only once each person detaches from the dominance of others will truth be achieved. until this occurs, the character of the dominance variable (your soap box or the fed's) is irrelevant. that's the real point. in attempting to "educate" the rest of us poor souls, you are merely substituting your own fabrications. "absolute power..."
ReplyDelete"pointing out the truth is no proof of your own significance"
ReplyDeleteHypertiger is not only brilliant, he's honest - I think that makes him significant (and one of the reasons I repost his missives here).
"and neither is posting with a 4-word name."
That is my name, so I post under it. Some, like Hypertiger, prefer to do otherwise.
Chalana, from Brazil,
ReplyDeleteThank you, to share with us, your
precious economic expertise.
Bless you
Chalana
The truth is also a variable. That is, the value of "truth" may be constant for the time beeing, but the truth (over time) is an everlasting moving mass.
ReplyDeleteScience, which is human kinds nearest approach to truth when it comes to controll routines for quality checking the results (methods) is changing from one day to another. Science (more popular called "facts") is nothing else than the sum of knowledge known to man at any point of time. Tomorrow we will add more knowledge to the previous known knowledge and thereby also changing what we know as the truth.
An objective truth that is a constant variable is interesting though, but merely exist as a subject for philosophers. The truth will be constant just as long as a subset of premises that builds that particular truth still is true. If just one of the premises that builds the truth changes, so will the truth itself also change as a result of it.
This relates to logic and has nothing to do with the subject of this blog specifically ... just had to point it out as a digretion to it.
Quote:
ReplyDeleteI repost his missives here
How (where) go you get his (Hypertiger's) original posts from?
I've been following Hypertiger for about six years and have saved his posts from various sites to word docs.
ReplyDeleteHe occasionally posts at http://www.goldismoney.info/forums/
(Before visiting, a small heads up:
http://hypertiger.blogspot.com/2007/12/they-are-all-over-place-doing-good.html)
I think he is at his best replying to those who disagree with him. But I disliked the distraction and thought his work needed a place where it would stand on its own - hence this blog.
This is a nice statement: The key flaw ultimately is that there is no interest attached to GOLD so tales of $10,000 an ounce gold are needed to sustain interest and to back that up, belief in the magic printing press of infinite inflation lie is required.
ReplyDeleteThe whole currency valuation game along with the gold valuation game is nothing but an interest rate game. Look at the structure of gold contracts on the futures market. It is all interest. When the real rate of interest is present (this may be the delusion, that we are in deflation, have been in deflation and what we are now looking at over the past few years is speculation that forces even more borrowing)the return above inflation that is requested is in excess of the inflation in general, thus ruining the long term hold position on gold. The short only has to buy back his gold and loan it out again over the long haul to beat the long side of the equation. There is interest or opportunity costs associated with every thing that is not eaten or used up.