BF2S Forums Won't the $700 billion bailout cause inflation?

youre dumb



rather have inflation than soup lines

Yes.

The Fed. always causes inflation, almost always... except when they contracted the money-supply during the great depression. Expanding the money supply is inflation itself.

And no you wont end up in a bread line if this bullshit hard-sell nonsense isn't passed. But it will be passed.

Last edited by topal63 (2008-09-28 07:44:25)

I meant Id rather have inflation than soup lines.  Or inflated soup lines.

topal63 wrote:

Hurricane2k9 wrote:

topal63 wrote:

Yes.

The Fed. always causes inflation, almost always... except when they contracted the money-supply during the great depression. Expanding the money supply is inflation itself.

And no you wont end up in a bread line if this bullshit hard-sell nonsense isn't passed. But it will be passed.

I guess I meant to say major inflation. As in major devaluation of the dollar or whatever. Isn't that what's happening in Zimbabwe?

No it wont cause rapid inflation. Home prices are also overvalued they need to deflate. The target toxic paper (bad paper debt) is what will be purchased from the private sector. Some specific deflation in value is occurring on very large ticket items (homes).

got it

san4 wrote:

topal63 wrote:

And no you wont end up in a bread line if this bullshit hard-sell nonsense isn't passed.

Unless he works for Goldman Sachs.

LOL, but no... that's when they sell the $5-10 million home in the burbs for a loss and buy a $1-2 million dollar home someplace else. And, have to settle living off a mere million per year rather than 5-30 million (or more) per year.
_________

Hurricane2k9 wrote:

topal63 wrote:

Hurricane2k9 wrote:

I guess I meant to say major inflation. As in major devaluation of the dollar or whatever. Isn't that what's happening in Zimbabwe?

No it wont cause rapid inflation. Home prices are also overvalued they need to deflate. The target toxic paper (bad paper debt) is what will be purchased from the private sector. Some specific deflation in value is occurring on very large ticket items (homes).

got it

You know this is just the most direct form of trickle-down (pee-on you) economics in the history of this Milton Friedman idea. Throw money at the top and just hope some somewhere gets spent and ends up in your pocket. Also, there are no guarantees that this will solve anything. Their claim is it is going to stop a collapse. Well that cannot be tested whether it is fundamentally true or not (because the bailout is going to happen!). We worked ourselves out of a great depression + the Fed.s monetary policy was adjusted to accommodate that. To solve our fundamental systemic economic problems are we going to get back to basics and work to create more wealth or throw paper at the top which is just more of the same and in the fastest possible manner?

Last edited by topal63 (2008-09-28 08:24:52)

topal63 wrote:

san4 wrote:

topal63 wrote:

And no you wont end up in a bread line if this bullshit hard-sell nonsense isn't passed.

Unless he works for Goldman Sachs.

LOL, but no... that's when they sell the $5-10 million home in the burbs for a loss and buy a $1-2 million dollar home someplace else. And, have to settle living off a mere million per year rather than 5-30 million (or more) per year.
_________

Hurricane2k9 wrote:

topal63 wrote:

No it wont cause rapid inflation. Home prices are also overvalued they need to deflate. The target toxic paper (bad paper debt) is what will be purchased from the private sector. Some specific deflation in value is occurring on very large ticket items (homes).

got it

You know this is just the most direct form of trickle-down (pee-on you) economics in the history of this Milton Friedman idea. Throw money at the top and just hope some somewhere gets spent and ends up in your pocket. Also, there are no guarantees that this will solve anything. Their claim is it is going to stop a collapse. Well that cannot be tested whether it is fundamentally true or not (because the bailout is going to happen!). We worked ourselves out of a great depression + the Fed.s monetary policy was adjusted to accommodate that. To solve our fundamental systemic economic problems are we going to get back to basics and work to create more wealth or throw paper at the top which is just more of the same and in the fastest possible manner?

Ronald Reagen saved the world though

God Save the Queen wrote:

Ronald Reagen saved the world though

The PC revolution and the technology that sprung up around it - is what made the economic gains of the 80's possible (HP, Apple, Microsoft, 3COM, Intel, Cyrix, AMD, Oracle... and the revitalizing of the paper-securities market with newcomer NASDAQ inception 1971; took off in the 80's though).

That was akin to a second industrial revolution - it was a historical creation of wealth and opportunity in a brand new arena: technology for the masses.

As far as him bringing down that Soviet Union thingy.... laughable nonsense. He only made the hard-liners in Moscow more attractive - so that change was delayed - not accelerated.

Last edited by topal63 (2008-09-28 08:49:54)

Bertster7 wrote:

topal63 wrote:

Expanding the money supply is inflation itself.

Only if the increase in supply outstrips the increase in demand.

True, but that rarely happens at least here in America.

Here inflation is basic Fed. policy - they mean to cause it.

Last edited by topal63 (2008-09-28 09:06:54)

God Save the Queen wrote:

when is there ever a low demand for money?

Demand is not just a human desire. It can simply be a relationship; a ratio; like the relationship of say GDP to dollars created on a printing press (low GDP + massive money supply creation would mean it really wasn't in demand).

Last edited by topal63 (2008-09-28 09:05:36)

God Save the Queen wrote:

when is there ever a low demand for money?

The demand for Us-dollars, for example, got lower, when parts of the OPEC decided to trade oil in Euros. Countrys didn't have to buy Dollars to get oil anymore.

Last edited by mr.hrundi (2008-09-28 09:35:29)

If the bail out goes through we will see a lot of inflation. But this is not all bad IF

1. you have very little savings because get eaten by inflation AND
2. you have a secure job

If you meet those two criteria then any debt you now hold you should try to get it into some sort of fixed interest rate
If you can do that then inflation is your friend because you have borrowed money at todays price and you will get to pay it back with tomorrows inflated dollars... in effect you will get inflated out of your debt. But stay away from credit cards because they will adjust up to 25%, 30% who knows

inflation is really bad for fixed income and pensioners.... baby boomers are screwed, no retirement at 55 for them now.

Its really bad for the US debt because Bush has borrowed so heavily for the Iraq war from foreign sources and if payment is to be made in a foreign currency then you can't inflate yourself out of your debt, be cause the currency exchange will reflect the relative change in the vlaue of the currencies. Bush has screwed us royally on this one.

So if you are really secure and can get a fixed interest rate, then now is the time to rack up the debt a buy real estate or other inflationary proof items, or put the money into improving you home.

duh