Rob Viglione

The Fed's Bubble Trouble

If this were true then there would be no such thing as inflation. Of course printing money causes inflation, it just takes some time to manifest. The perversion is that the money printing is, in essence, theft. Government is seizing a larger quantity of total national output without even having the guts to raise taxes and call it what it is. Printing money does not create more goods and services, just enables the printers to swindle the producers for a brief period of time. In the end, producers wisen to this nonsense and raise prices.


On Jan 11 02:34 PM flow5 wrote:

> "since the only way the Fed can buy bonds is by printing money, the
> more bonds they buy the more inflation they will create"
>
> This is, of course, wrong. The FED could purchase the entire 2009
> budget deficit with no effect on prices (inflation), and it would
> hold up the price of government securities (temporarily).

The Fed's Bubble Trouble

Link the Schiff's analogy:

www.youtube.com/watch?...


On Jan 11 01:44 PM Rob Viglione wrote:

> The fundamental fallacy is that the world does not "need" US dollars
> or US junk debt. This illusion will one day fade.
>
> Peter Schiff said it best in a tale of 6 or 7 people stranded on
> an island...everyone Asian, but one American. The Asians all have
> jobs-gathering food, fishing, hunting, etc. The American's job is
> to eat. Economists all claim the American is critical to the island's
> economy, since without him no one would have to hunt, fish, grow
> food, etc. The American is the backbone of GDP!
>
> This is the current state of the world. The reality is that everyone
> would be better off without the American eating all their output!
> They truly don't "need" us, our dollars, or our debt.
>
> On Jan 11 11:56 AM secmaven wrote:

The Fed's Bubble Trouble

The fundamental fallacy is that the world does not "need" US dollars or US junk debt. This illusion will one day fade.

Peter Schiff said it best in a tale of 6 or 7 people stranded on an island...everyone Asian, but one American. The Asians all have jobs-gathering food, fishing, hunting, etc. The American's job is to eat. Economists all claim the American is critical to the island's economy, since without him no one would have to hunt, fish, grow food, etc. The American is the backbone of GDP!

This is the current state of the world. The reality is that everyone would be better off without the American eating all their output! They truly don't "need" us, our dollars, or our debt.

On Jan 11 11:56 AM secmaven wrote:

> The world needs US dollars to facilitate trade and commerce. The
> Fed purchase of government debt creates the dollars the world needs.
> When every commodity and manufactured good and real estate improvement
> is in excess supply due to the unemployment of a large percentage
> of people who otherwise would be consumers the talk about inflation,
> much less hyper inflation, because we create more dollars is nonsensical.
> The result of current policies will be the dollarization of the world
> if we keep our country a nation of laws, public order, no bribes,
> high public education standards, etc. Obama's wide popularity will
> greatly support the dollar as well.

The Fed's Bubble Trouble

Many in government feel the same regarding your "every billionaire to give up 10% or so of their worth to needy people."

I'm just waiting for men with guns, uniforms, and black bags to start enforcing this kind of populism. I'm on a boat to international waters before they ever make it to my house.


On Jan 11 12:32 PM Top Gun wrote:

> The debt needs to be paid, as long as there is huge (non-treasury)
> debt, excess cash in the system will flow to return principal to
> creditors rather than to inflation. The Fed will re-inject the debt
> it acquired as this excess is absorbed. Very complicated, and I'm
> sure some bright Fed PhD has modeled the whole thing.
>
> Increased gold prices are one way of increasing the money supply
> as cash is changed for gold. What we really need is for every billionaire
> to give 10% or so of their worth to needy people today, not as an
> institution. They could easy immediately put $10-20 billion back
> into circulation! No impact on our federal balance sheet.