Goldtent TA Paradise

There will be No Inflation for the Forseeable Future

1. Chartsmaster says:

   June 16, 2020 - 7:29 pm at 7:29 pm

   I must respectfully, disagree. Consider the source(s). It is in the FED’s interest to spin such nonsense that there isn’t or won’t be any inflation. Although the velocity of money is important especially for hyperinflation, anyone who has touted the deflation narrative over the last 5 decades, doesn’t get it. House prices, college education, healthcare, just about everything you buy, particularly services are much higher and continue to rise. Not prices going up, but the actual number of currency units, dollars, loonies, pounds, etc. it takes to aquire those goods or services, steadily increases. My biggest pet peeve regarding economics is that deflationists all make the same mistake. They compare past periods to the present. You can’t do that. We no longer back the reserve currency with gold! In the past, the reserve currency, the dollar and before that the GBP, were backed by gold. You CANNOT HAVE DEFLATION WHEN ON A FIAT CURRENCY STANDARD! You can have periods of declines in asset prices, specific commodities etc. and you can have periods of disinflation when prices of goods and services rise less slowly, but you can’t have DEFLATION. I challenge anyone to provide an example of real deflation when the reserve currency wasn’t backed by real money, gold and or silver. All fiat currencies end up being inflated into oblivion and that is exactly where we are right now. We may end up eventually getting a reset back onto a gold or silver backed monetary system, but until we or the Chinese or someone else does so we are doomed to inflation and soon hyperinflation!

   • Patrick says:

     June 16, 2020 - 7:36 pm at 7:36 pm

     I’ve had my ups and downs on this subject. I love insight like yours. More to digest. Thanks for sharing.

2. Fullgoldcrown says:

   June 16, 2020 - 8:57 pm at 8:57 pm

   Japan ?

   • Chartsmaster says:

     June 17, 2020 - 4:19 am at 4:19 am

     When has Japan been the world reserve currency? No deflation in any reserve currency unless it was backed by real money, gold and or silver.

3. pedro_deleon says:

   June 16, 2020 - 9:14 pm at 9:14 pm

   The Fed and central banks can create high powered money (printing and then buying bank held assets), but they can’t make the private banks lend to the public (on net).

   That’s the pushing on a string thing.

   So deflation (= credit contraction in my book) CAN happen in a fiat world.

   And the fact that it hasn’t happened much, to my way of thinking, makes it even more likely that it WILL happen at some point. But it will be that much more severe, and could well take down the banking system.

   • Fullgoldcrown says:

     June 16, 2020 - 9:41 pm at 9:41 pm

     Thanks Pedro

     I know this is your wheelhouse as you have inside experience.

     My take has been they can force the banks to lend money if they stop paying interest on excess reserves BUT they Cannot force the public to ask for loans. …when they are broke or bankrupt

   • Chartsmaster says:

     June 17, 2020 - 4:17 am at 4:17 am

     What difference does it make if credit contracts if prices keep rising (you need more currency units to pay for everything you consume) You can bring all these ancillary points up but it still costs me more every year to live, eat, travel, get educated etc. etc. Don’t just pick out the one or two commodities or things like technological improvements.

     • Patrick says:

       June 17, 2020 - 7:08 am at 7:08 am

       I agree. Lots of confusing with wording. Also, in a recent George Gammon podcast, he highlights how CPI now measures “cost of living” vs “cost of products” (like they used to do it pre-2000). http://www.shadowstats.com/article/consumer_price_index. If I had my current revenue back in, let’s say late 1990s, I’d have a mansion, not single home. I’d be eating doing waayyy more restaurants, and vacations, and what nots! It’s clear we have been inflating, not deflating. Maybe I’m arguing with myself. Even now, meat prices have increased (according to my girlfriend). Out of stock for food, never know what substitute you’ll have instead. The cost of basic needs (not wants) is increasing, not decreasing.

       • Chartsmaster says:

         June 17, 2020 - 8:39 am at 8:39 am

         Absolutely, Patrick. Another fact rarely discussed. Most food and household products continue to shrink the size. (amount of product for same or even small price increase) That is a clandestine way of increasing prices. You have to buy more or sooner because you got less coffee, candy, flour, ice cream etc. INFLATION

4. Chartsmaster says:

   June 17, 2020 - 4:22 am at 4:22 am

   The fact that it hasn’t happened is your answer. Yes the system is going to collapse but only because the hyperinflation always eventually collapses the system.