Get Ready, Inflation Is On The Way

[ninakat]

The author pretty much sums up my view of what's going on with the economy and where it's headed, and why. And, not surprisingly, this isn't just about economics, but about the hidden conspiracies that underlie everything we think of as reality.... since, in the end, it's all about money and power. Sadly. I've just posted the last segment of the article (emphasis mine), but the entire piece is quite good (even if your eyes tend to glaze over when reading economics).

Get Ready, Inflation Is On The Way
By Giordano Bruno

Neithercorp Press - 4/19/2010



(...)

Caught In A Lie? Lie Bigger!

Americans are not happy with the current state of affairs in this country. Obama’s approval rating has plummeted to one of the lowest levels on record for any president at this point in a term. This is due in large part to his continuance and acceleration of Bush era economic policies:

http://news.yahoo.com/s/ap/20100414/ap_ ... ratic_woes

The numbers are no better for Congress as a whole. Rather efficiently, the current government has sullied itself beyond repair in the minds of most citizens. If you know your history, then you know that times like this are the most culturally precarious. Our political leadership and the Globalists who shadow them have a knack for creating terrible distractions when they become the primary focus of the people’s ire. Wars, terrorist attacks, financial disasters, tend to strike in curious fashion whenever the establishment is directly under the magnifying glass. Of course, this could just be “coincidence”, but I’m not one to take that simplistic explanation too seriously.

Inflation, when it occurs, will lead directly back to the private Federal Reserve, the core source for most of the problems in this country. They will do everything in their power to hide it, divert the blame, and cause upheaval in other areas of society to draw our attentions away from it. The non-stop propaganda on our supposed “recovery” is only the beginning. My greatest concern is that they will use the advent of a new war or terrorist attack as a phantom target, a scapegoat for the hyperinflationary breakdown that was going to occur anyway. My greatest fear is that the majority of Americans will fall for the ruse.

If I am wrong, then we have nothing to worry about, the “green shoots” are in full bloom, the Dollar is still king, and China is still happily making our sneakers and paper umbrellas. Good for us. But if I am right, and you find one day soon that hyperinflation is ravaging our currency and our economy, remember well that it was not Iran, Russia, Pakistan, or China that caused our pains. It was not Al-Qaeda or those rambunctious “Homegrown Terrorists” that we keep hearing about. None of these countries or groups are the primary trigger of the Dollar failure.

The MSM will claim that we were on the verge of a financial resurgence; that things were getting back to normal. This will be a grand lie. The master lie. The meltdown was going to happen regardless of that war in Iran, or that dirty bomb attack on the East Coast, and the culpability for it will lay squarely in the hands of the Federal Reserve, and certain key players in our own government. If they institute martial law, or the dissolution of civil liberties in response to structural failure, it will be they who are responsible, not some devious outside menace.

Laughably, in the end some will eventually argue that inflation is a “good” thing, because it “forces Americans to spend their money before it is devalued”! Sound absurd? The article below makes this exact statement!

http://tinyurl.com/y2fsax7

No matter what happens in the next couple of years, we cannot allow ourselves to forget who the real enemy is, and we cannot allow others to forget either. The last time a major western power was thrust into the nightmare of hyperinflation, we ended up with the Third Reich. Let us learn from history instead of repeating it. Let us not see a fourth…

[Nordic]

Yeah, that's a good one. Thanks for sharing it.

It seems inevitable, the inflation thing. How can it not be?

[ninakat]

Yeah, that's a good one. Thanks for sharing it.

It seems inevitable, the inflation thing. How can it not be?

That's what I thought (and still think), but you'd be amazed at how much confusion and bickering there is over the subject. Here's the first part of the article above (emphasis mine):

In the professional financial world, the term “inflation” has many inferences, consequences, supposed benefits, and definitions. One Wall Street economist may have an entirely different interpretation of the word than another Wall Street economist working in the same building. This lack of a common orientation to the issue creates serious confusion for the everyday investor and the average American only looking for the fundamentals, so that they may better protect their livelihood. In fact, it is not unusual to see two financial analysts discussing inflation in the MSM, only to completely fumble over each other because they do not share a mutual idea of what it actually means.

Some consider inflation as the expansion of markets, some the expansion of profit margins, others the unbalanced increase in productivity versus demand. These are all marginal inflationary concerns compared to REAL inflation; the inflation of prices due to a devaluation of the dollar.

[Simulist]

We'll see a Fourth Reich.

In fact we're not only already in it, we have been for several decades now.

But Joseph Goebbels' American counterpart was smart-enough to paperclip a smiley face decal over the swastika, and most people still haven't caught on.

[82_28]

Let me just say, that I just brought up to my GF last night after I had arrived home from the store, last night, that prices are nearing, I would say at least 60% higher than a couple weeks ago. Where there were "sales" on shit then, the prices now seem insane. Honestly, it was eerie. Everything seemed not just up cents, but dollars as well. Shit I remember paying around $5 for what is now about $9.

It does seem all of a sudden. Anybody have more on this? Reports from where you are?

[nathan28]

Let me just say, that I just brought up to my GF last night after I had arrived home from the store, last night, that prices are nearing, I would say at least 60% higher than a couple weeks ago. Where there were "sales" on shit then, the prices now seem insane. Honestly, it was eerie. Everything seemed not just up cents, but dollars as well. Shit I remember paying around $5 for what is now about $9.

It does seem all of a sudden. Anybody have more on this? Reports from where you are?

I have a thread on my sticker shock on food prices in the data dump, but am mostly just collecting local and average prices there.

I am, however, wary of cries of inflation. Check the chart below of the S&P (the top 500 stocks, rather than the 30 on the SowJones) since 1998.

SP500.gif

And according to the Russell Index Returns calculator here (click for link), return on the Russell 3000 since 2000 has been... 1.33%, which lags far, far, far behind CPI and core inflation.

Then, just consider the huge, huge loses on loans, both private and by firms, in 2008-present in housing and derivatives, etc. That's massive wealth destruction, i.e., deflationary.

Prices have obviously risen. What's going on is IMO stagflation. Like the last general crisis in capital, 68-75 or so (68-80whatever if you count Iran and bond vigilantes etc.).

If you asked me, I'd say that the Volker era, which essentially broke the back of private farming class and working class in the US with sky-high interest rates (there wouldn't be any militias in the US if it weren't for the dispossession of farmers in the late '70s-early 80s), is different. Since then, consumers have resorted to debt increasingly to meet consumer goods inflation in face of stagnating wages. So a substantial part of the US hasn't made it out of the '70s crisis.

Some of the only places where actual advancement that benefits nearly everyone has taken place has been in technology. E.g., the Third World has benefited from wireless tech a lot, and in the US it's relatively cheap, so you see an increase in the "power" part of "purchasing power" without the "purchasing" part. But that's heading straight into strange comments about "species being" so I'll stop right there.

But if you look globally, since the '90s, wages measured in purchasing power have stagnated, as well. If you ate beans, rice and beef tallow in 1990 in your corrugated steel shack, you ate it yesterday in your corrugated steel shack, too.

So it still sucks.

Also kudos to "Giodorno Bruno" for using the term "Globalists," I'm pretty sure that Bruno was a rootless cosmopolitan and fairly amenable to globalism--in fact, he invented the idea of an infinite universe--so thanks for the unwitting irony! BUY GOLD NOW!!!

[23]

People are generally distracted away from seeing the increasing signs of a soon-to-be hyperinflation.

There's lots of entertainment to be had in the villainization of the Republicanized version of the heterogeneous tea party, you know.

The Government is more than happy to help you identify the bad guys today.

Place your attention where the Government wants you to.

After all, they're here to help you.

[Stephen Morgan]

Yeah, that's a good one. Thanks for sharing it.

It seems inevitable, the inflation thing. How can it not be?

That would seem to be indicated by the increased supply of money. Unless there is a corresponding demand from the Chinese, or from the rich (one effect of the concentration of wealth is that money is taken out of circulation and accumulated by the rich who squirrel it away, put it into rich man's ghettoes like the currency market and generally don't put it into general circulation). One other option is, as pointed out, that inflation has already happened and is happening now. For many years now the official figures for inflation have been largely based on the price of consumer goods, largely manufactured electronics the price of which is constantly falling as the technology becomes more common, production more efficient and workers more enslaved, the inflation figure would be much higher if it only counted those things on which poor people spend most of their money (and rich people spend more on, but less as a proportion of their wealth) such as food, bills and housing.

[barracuda]

Yeah, that's a good one. Thanks for sharing it.

It seems inevitable, the inflation thing. How can it not be?

Well there was a short sale down the street from me this week in which the asking price of the home was almost exactly one-half of the price it was bought for just about two years ago, so there's a tremendous amount of money leaving the system as well.

[apologydue]

nathan28 wrote:

Then, just consider the huge, huge loses on loans, both private and by firms, in 2008-present in housing and derivatives, etc. That's massive wealth destruction, i.e., deflationary.

Losses? That was a joke right? Give or take a few dozen trillion, there is 300 or 400 trillion U.S. dollars in an 'off the books status' hiding in someones pocket. That is only U.S. dollars, not mentioning the currencies of other nations.

Isn't that a transfer of wealth instead of a destruction of wealth?

[Canadian_watcher]

money doesn't leave the system, it just gets shifted.
although I guess it depends what you mean by "system"

[barracuda]

Losses? That was a joke right? Give or take a few dozen trillion, there is 300 or 400 trillion U.S. dollars in an 'off the books status' hiding in someones pocket. That is only U.S. dollars, not mentioning the currencies of other nations.

Isn't that a transfer of wealth instead of a destruction of wealth?

If you're talking about derivatives, I would examine them more closely to determine what the true value in dollars of the derivatives market resolves to. I can bet you a trillion dollars that the price of corn moves up one penny tomorrow, then insure your side of the bet and mine for a trillion and one dollars in the case of losses, but that doesn't mean much money has really been transferred anywhere. If you're not talking about derivatives, I wonder what you are talking about.

money doesn't leave the system, it just gets shifted.
although I guess it depends what you mean by "system"

Oh, I think money can leave the system alright. Try burning a dollar bill in a fire, or throwing a gold coin in the ocean. It's a strangely exhilarating sensation. And defaulting on a underwater mortgage loan is not exceedingly different.

[apologydue]

If you're talking about derivatives, I would examine them more closely to determine what the true value in dollars of the derivatives market resolves to. I can bet you a trillion dollars that the price of corn moves up one penny tomorrow, then insure your side of the bet and mine for a trillion and one dollars in the case of losses, but that doesn't mean much money has really been transferred anywhere. If you're not talking about derivatives, I wonder what you are talking about.

Sorry Mr. Sharp Teeth, I cannot afford the terms of the bet. I'm but a pauper sir. (just joking, I understand what you mean)



As far as I am concerned time and labor is money. Aggragating other peoples time and money is power. Paper money and gold are only place holders for time spent laboring. The reason power likes fiat paper money better than metal is because metal is a finite item. Diluting gold with other metals only goes so far before it loses its golden luster, and then it becomes apparent to the peons that something stinks in the system. Paper can be printed at will and makes the system easier to game. The color of money can remain the same while the color of the game changes right before our eyes. Derivatives are holding pensions, etc...hostage.

Oh, I think money can leave the system alright. Try burning a dollar bill in a fire, or throwing a gold coin in the ocean. It's a strangely exhilarating sensation. And defaulting on a underwater mortgage loan is not exceedingly different.

Tell me about it! Touche. I read an article about a guy that bulldozed his home flat instead of giving it back to the system! Instead of letting the system put another peasant in the house the home owner decided to remove it from the profit roster of the peasant housing complex.


I understand what you mean and strictly speaking you are correct.

However, since gold and paper money stand in for time labored, wealth never really leaves the system. If I default on the mortage of a house, I lose my down payment and equity in the house. That down payment and equity represent thousands upon thousands of hours I spent laboring with my time. What I didn't pay off was not money lost, only hours of my labor the system owners didn't get to capture. My equity and laobr, in the form of a computer transaction or paper money transaction just got appropriated to the system because I lost it. It can now be converted into labor and time by the system owners when they give it to someone else for services desired.

Inflation and deflation are only a squeeze used by the system owners when the peasants get too close to securing a little too much free leisure time of their own. When the squirrels save up too many nuts for the winter those nuts must be taken from the squirrels so that the squirrels will get back on the treadmill and spin the system round for its owners.

In this way wealth is transferred from one part of the system to another, but not lost.

[barracuda]

Not all labor is converted into money, and not all money is produced as a result of labor. I'm sure you can think of several obvious examples of each.

[Canadian_watcher]

Inflation and deflation are only a squeeze used by the system owners when the peasants get too close to securing a little too much free leisure time of their own. When the squirrels save up too many nuts for the winter those nuts must be taken from the squirrels so that the squirrels will get back on the treadmill and spin the system round for its owners

Oh so painfully true. I get so angry about this sometimes that I can barely catch my breath. It's not a good way to live but I can't seem to get over it. Property tax = serfdom right there, and then add on all the other taxes, fees, "must have insurance policies" etc and we are in a feudal system, for sure.

Re: money leaving the system...

I see it not as being about labour, but about the insurance and CDOs etc that the banks have set up behind the loans that collapse - behind the values that were inflated. That "money" is on a balance sheet somewhere (or should be) and therefore never really leaves the system.

Watching the US housing market from Canada, starting in about 2002, I could see the whole thing plain as day. I kept trying to figure out exactly WHY, though.. why were they setting so many people up to fail on their house purchases? I knew banks didn't want to own houses.. so they obviously had something else up their sleeves.

Bankers saw a way to take the money out of one 'system' and put it in their pockets.