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Ive heard from a number of expert sources who think that spiraling inflation is going to be a real problem in the coming months and years. If so, isnt now a good time to take any money you have stuffed under the matress and stock up on anything and everything you might need in the coming years while that money still has some real purchasing power?
 

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It's not if, it's when. You can't keep printing money indefinitely and expect it to remain worth anything. Read up on the term 'fiat money'.

The world is also unhappy with this right now and may use the opportunity to switch to a world currency independent of the dollar. I can't say I blame them. Algerian dinars may be worth more at this point.
 

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It's not if, it's when. You can't keep printing money indefinitely and expect it to remain worth anything. Read up on the term 'fiat money'.

The world is also unhappy with this right now and may use the opportunity to switch to a world currency independent of the dollar. I can't say I blame them. Algerian dinars may be worth more at this point.
They will want to, but they will not do it.
 

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Inflation will come eventually, but for now, economists are predicting deflation. News reports from yesterday and today are using the word more and more. IMO, prices are set to drop over the next few months as the news just keeps getting worse and will continue to get worse, so waiting a bit longer might get you more for your money. But I would definitely stock up against the day inflation comes, because without a doubt, it is coming.
 

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Predicting deflation? That goes contrary to basic economics (which is about as far as I can go).

Of course it doesn't surprise me that some economists are predicting that. Most didn't see the current situation coming, can't come up with a plan to get out of it, and are like weathermen who can only tell you it's going to rain when the first drops start falling.
 

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You know, I feel like we're unknowningly being drawn along in a scenario of "Bazerman's Auction" here. For whatever reason, our economy is being manipulated and we're faced with only two scenarios: either we'll all have lots of money and big bank accounts but a loaf of bread will cost $800, or nobody will have any money at all and unable to find bread at any cost.
 

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http://www.msnbc.msn.com/id/27823694/

I just read a news article on deflation today. It claimed that deflationary spiral was worse than an inflationary one. It went on to state that there could be a great deal of wealth that is wiped out from deflation.

If there is anything history has taught anyone, the dollar on average has always continually lost it's value. Not so with assets, which by and large have either kept up with inflation or increased in value. So given the choice between a having a recovery where all my savings are wiped out or a recovery where my money is worth at least what it was going into a recession/depression, I would prefer the latter.

The loss in "wealth" that comes with asset deflation always reverses coarse with the onset of a recovery, not so with monetary inflation. Can any one here tell me when their savings in past recessions were worth more after the recession ended? My guess is everyone will agree with me here that the answer is no.

Since the Fed fears deflation so much most likely we'll see more economic stimulus checks and bailouts like you won't believe, in hopes of reigniting the inflationary fire. Inflation is great for the government, it can keep overextending itself and pay back the debt with worthless paper.

So far all my educated guesses have come true, the next guess is that the next bubble will be a currency bubble. And that will be much more painful than any deflationary spiral could ever be. If I were to go out on a limb and try and predict the future, once the dollar collapses (it will eventually, no country can overextend itself forever) it will be replaced with a one world currency. One currency would make it much easier for governments to flub figures and lie about statistics. There are no other pesky currencies for it to be valued against. One world currency will be great, because we'll have low taxes, low inflation, tons of entitlements, and lots of credit and grants. Except for one problem, printing paper can't defy the very real laws of physics and resource depletion. Real wealth can't be merely printed, it comes from good soil, good climate, and people willing to work hard.

I fear the day of $800 dollar bread isn't far off. So I am going to enjoy deflation while it last.
 

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the printing of money that is contributing to the inflation we see today is primarily driven by the need to finance the war in Iraq.

Once we stop spending 10 billion a week, we should start to see a deflation within a few months.

If the government vastly curbs the printing of money, we may see a money shortage that will slow down growth - hoarding cash will not help either.

Salaries will start to shrink faster than retail prices I suspect. Problem might become cheaper prices and more goods available, but no one with the $$$ to buy them.

Just look at what we are paying for gas today ($1.85 in southern NJ the other day). Based on my rough estimate of today's inflated dollar. That's like paying $1.25 for a gallon of Unleaded gas in 2003! We may see $1.50 gas by Xmas!




http://www.msnbc.msn.com/id/27823694/

I just read a news article on deflation today. It claimed that deflationary spiral was worse than an inflationary one. It went on to state that there could be a great deal of wealth that is wiped out from deflation.

If there is anything history has taught anyone, the dollar on average has always continually lost it's value. Not so with assets, which by and large have either kept up with inflation or increased in value. So given the choice between a having a recovery where all my savings are wiped out or a recovery where my money is worth at least what it was going into a recession/depression, I would prefer the latter.

The loss in "wealth" that comes with asset deflation always reverses coarse with the onset of a recovery, not so with monetary inflation. Can any one here tell me when their savings in past recessions were worth more after the recession ended? My guess is everyone will agree with me here that the answer is no.

Since the Fed fears deflation so much most likely we'll see more economic stimulus checks and bailouts like you won't believe, in hopes of reigniting the inflationary fire. Inflation is great for the government, it can keep overextending itself and pay back the debt with worthless paper.

So far all my educated guesses have come true, the next guess is that the next bubble will be a currency bubble. And that will be much more painful than any deflationary spiral could ever be. If I were to go out on a limb and try and predict the future, once the dollar collapses (it will eventually, no country can overextend itself forever) it will be replaced with a one world currency. One currency would make it much easier for governments to flub figures and lie about statistics. There are no other pesky currencies for it to be valued against. One world currency will be great, because we'll have low taxes, low inflation, tons of entitlements, and lots of credit and grants. Except for one problem, printing paper can't defy the very real laws of physics and resource depletion. Real wealth can't be merely printed, it comes from good soil, good climate, and people willing to work hard.

I fear the day of $800 dollar bread isn't far off. So I am going to enjoy deflation while it last.
 

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china just surpassed japan as the largest holder of treasury bonds.
http://www.atimes.com/atimes/Japan/JK19Dh01.html

Japanese economists, increasingly concerned that the United States might seek to pay its enormous and growing debt obligations in a weakened US dollar, are looking to the possibility of US Treasuries being issued in yen. [....]

The idea of issuing foreign currency-denominated US Treasures is not new. The Jimmy Carter administration, buffeted by the two oil crises of the 1970s, sold "Carter bonds", denominated in German marks and Swiss francs, in 1978 to attract foreign investors into Treasuries.

"The US will be forced to issue foreign currency-denominated US Treasures in its hour of need," said Mizuno. "The US cannot finance its deficit by itself. The US financial system cannot survive without foreign investors. We will see 'Obama Bonds' in the future."
--sgl
 

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Once we stop spending 10 billion a week,
Last I saw it was $10 billion a month. So when I read that Iraq had a surplus of $79 billion I wondered why we didn't take it, afterall, we were told that the war would be paid for by the sell of Iraqi oil.


.
 

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Weirdly, Tips yields point to deflation
By John Dizard
Published: November 16 2008 17:18 | Last updated: November 16 2008 17:18
Would you believe that we will actually have significant deflation in the US next year? And the year after that? And flat consumer prices for the year following? That’s happened only once in a developed country since the 1930s, when Japan recorded a negative 1.6 per cent consumer price index for 2002.

Yet, if you believe the yields on US Treasury inflation protected bonds, or Tips, we will have a 2.2 per cent fall in prices in 2009, a 2.5 per cent decline in 2010, and only flat prices in 2011. If that turns out to be true, the real interest rate burden on even the highest rated borrowers will be extremely hard to bear.

From Financial Times (FT.com)

My grandmother lived through the Great Depression. I remember during the Carter years she would say, "Don't worry when prices go up; the time to worry is when prices go down."
Rest her soul...
 

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Last I saw it was $10 billion a month. So when I read that Iraq had a surplus of $79 billion I wondered why we didn't take it, afterall, we were told that the war would be paid for by the sell of Iraqi oil.


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I may be wrong. I was just quoting what Obama said in his campaign.. over, and over, and over, and over again.

No one told the Iraqis that they had to pay for our services. (They also didn't ask for them, but that's another story). Normally in wars that the US has fought, we are the ones who rebuild the beaten nation at our taxpayer expense.
 

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I would say to do everything you can to get out of debt and buy tools, seeds, books, farm animals, etc. Then worry about what to do with the rest of your money if you have any left to worry about.
 

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I like having money... lot better than not having any...

however, in these times, I feel that having real goods on hand (that I'll need at sometime or other in the future, or for trade goods) are worth more than cash... cash can disappear in value thru inflation... I'm doubling up on everything I have now, in the way of tools, and when I buy, I'm going for the best quality possible, and putting them away in the barn, for ten years from now, when the hardware stores are just a longing memory, or possibly a fairy tale, told around the fireplace late at night... I'll be able to pull out that brand new shovel and say See!

Deflation is just as dangerous, if not more so... If the golden horde's lifestyles are restrained, and they suddenly can't pay for their bills, the system might crash in toto, and then what?

These are the good ol days!
 
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