mrbill

Fears of Inflation Seem Overblown

"inflation is hard to come by when wages and demand fall - money printing cannot offset loss of income and confidence. If you believe in inflation you have to believe jobs will grow, and wages will rise. Does anyone believe that?"

What a terrible observation. Have you considered that other countries will pickup where we leave off? If you think money printing won't make prices rise, why stop at a few trillion, how about 10 or 20 trillion in freshly printed dollars backed by nothing?

I am not one to suggest the collapse of the dollar, and I've made that point here before. But that we will have inflation thanks to the Fed's monetary policy, if something doesn't change soon, you can count on it.

On May 29 06:21 PM Fighting Yoda wrote:

> Despite all the money printing deflation is taking root - CPI data
> clearly show that. CPI as usual under reports - it under reported
> inflation now under reports deflation. For inflation hawks - inflation
> is hard to come by when wages and demand fall - money printing cannot
> offset loss of income and confidence. If you believe in inflation
> you have to believe jobs will grow, and wages will rise. Does anyone
> believe that?
>
> There is too much surplus capacity globally – look at China – do
> you think US is going to import all the junk that we imported from
> them. In US itself do we have shortage of auto or home capacity.
> Despite huge production cuts the capacity is still surplus. Nat gas
> is another very good barometer – rig count keeps going down but the
> inventories keep rising, and of course prices keep falling.
>
> Green shoots are simply smoke and mirror tactics of Wall Street,
> meanwhile the Govt. is simply watering these weeds.
>
> Velocity of money is dwindling as credit crunch continues, just because
> there is thaw in the credit markets (as measured by TED spreads)
> does not mean credit has increased. Credit is decreasing – both availability
> and demand. Money is money + credit – money may increase but if credit
> decreases more – net money has actually decreased.
>
> SFP Fed had recently published a nice paper on the subject: U.S.
> Household Deleveraging and Future Consumption Growth
> www.frbsf.org/publicat...