brewtul

What's It Going to Be: Inflation or Deflation?

We will have deflation THEN inflation. While falling commodity prices have cheered the mainstream financial press they have scared the bejeebus out of Bernanke et al. They prefer not to have prices falling when monetary policy is already HIGHLY accomodative (i.e. negative real rates). SO... entere the non-traditional means of putting money into the economy. If banks won't lend and borrowers won't borrow the Fed (and it's wall street owners) can simply juice asset prices directly. Buy real estate, stocks, long term bonds, anything you want. The exchange stabilization fund and treasury are authorized to do it and even if they weren't they'd simply change the rules. Only those with eyes to see what happens to purchasing power when ALL currencies decline in tandme will be able to protect their wealth. That's the problem. Asset inflation does not create wealth - just the illusion of wealth as your nominal accounts inflate. That is why the authorities are trying to crush gold - it is the only alarm left in the system.