Hyper inflation in 4… 3… 2…
[Apparently we are waiting on Senator Brown (D-OH) to get back into D.C. and vote].
..and PASSED.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
ProShares UltraSHort Treasuries in 4…3…2…
Going, going, gone…
EP – I love your style, but please don’t become another one of those Gold Standard Paultard nuts forecasting hyperinflation. You’re smart enough to know that no one really knows whether we’re going to get hyperinflation or a deflationary death spiral or something in between.
Suddenly this gay American married to a Canadian (and living in Vancouver, BC) feels thankful for smart immigration policies that allowed me to immigrate North. Suddenly Canada doesn’t feel so socialist anymore. And we have the healthiest banking system in the world. But please come to our Olympics next year, b/c we’ll still thank you for your money (as devalued as it will be).
@3
well played sir. time to short silver, the retail bugs have gone inflation crazy way too early
SIRI…bridge loan extended…anyone?
Short term deflation, long term ultrahyperinflation. At some point in a year or so, many will decide it’s time to stop saving and start spending. Too many dollars chasing not enough goods.
@5
Way too late.
I love Canada but only when it’s 1.6 CAN = 1.0 USD
Sen. Brown from OH is flying back from his home state after attending services for his deceased mother. The vote is held open on his behalf. He will be the last vote needed to pass. Apparently no GOP senator agreed to vote yes out of respect for Sen. Brown’s difficult situation. It could have saved him the trip back while his family is in mourning.
And for EP’s idiotic hyperinflation comment, what else can you expect from EP? The markets don’t see it yet. In fact, welcome to Japan!
The idiotic banks are going to be requiring another trillion $ from the US Treasury, so yes, we might see some inflation down the road. But if nothing more is done to stimulate demand and get credit markets restarted, it may not even matter. Praise the Lord, and pass the ammunition!
Next Friday’s CPI announcement will show negative inflation year over year. And Toyota just cut wages 10% across the board, while Vikram is making $1 this year. Oh the humanity!
I am the CEO of a soup kitchen.
What is a wealth redistribution?
A lot of very learned economists are furiously writing articles saying hyper inflation so EP isn’t so far off base as you think.
EP, I LOVE A FIESTY WOMAN! Nice rebuttal to my post under the “Obama is going to pay your mortgage” thread.
Any plans for tomorrow? Would love to take you out and shower you with roses.
Cheers honeypie,
Tanned Banker
Now is a great time to write hyperinflation articles. In 2011, you get to say, “hey, I wrote a hyperinflation article back in Feb 2009, pay attention to me!” If you are wrong, big deal, you were wrong.
“”Congress, heh – OK, I’m a diplomat and an elder statesman and gentleman farmer in the mold of Thomas Jefferson, with a little Frank Lesser mixed in, and all I say is these guys and dolls – they are just plain clueless.”
By way of example, Cramer cited the tax credit the stimulus package would give new home buyers.
“So hey, how does Congress respond to the foreclosure crisis in its stimulus package?” Cramer asked. “With a solution that’s about as efficacious as an invisible garment. It adds $500 to a tax credit for first time homebuyers. Five-hundred dollars – I got that in my pocket for heaven’s sake. Yeah, I’m sure that’ll do a world of good.”
“Everyone in the press is pretending this package is wonderful, but in reality it’s just as substantial as the emperor’s new clothes,” he added.”
http://tinyurl.com/c8l23u
Wait…so I just read in the Times:
“The Senate vote was marked by high personal and political drama, as the White House arranged for a plane to fly Senator Sherrod Brown, Democrat of Ohio, back to Washington from his home state, where he had gone because of the death of his mother.”
He’s not flying commercial? Or driving American? Or taking Amtrak?
I’m not sure I understand the rules. Senators casting votes for the WH can take a private plane at taxpayer expense but we disallow executives from auto and finance companies from taking corporate jets?
Somehow in all this Wall Street has been marginalized. Not everyone on wall street is wrong but that is what the world has been lead to believe.
Wall St bonuses in the future = $0.0.
“Under the bill, bonuses could be paid only in restricted stock, which recipients couldn’t cash in until the Treasury is repaid.”
Haha, yeah right, a deflationary spiral. Have you looked at the amount of excess reserves banks are holding? They can’t sit on those forever. The banks are paying depositors more in interest than the Fed is paying the banks. They’re gonna have to lend the money to stop the bleeding. Then the multiplier kicks in and it’s off to Zimbabwe we go.
@18 – this applies only to TARP-taking banks.
So only the party is over only for US-owned banks. The Germans, French, Swiss, Japanese and Canadians will get all of the talent and 3 years from now we’ll have Congressional hearings trying to figure out why US banks are so disadvantaged.
@20
A better scenario would be hedge funds taking role of broker dealers and poaching the best people on the street (sales/execution/research side). Citadel is already one of the biggest market makers in options.
“slideshows” one more fascinating than the next. The Real Estate one has magnificent homes: http://www.businessinsider.com/slideshows
Keep in mind the inflation hawk has been whispering sweet nothings in the ear of our messiah for the last year or so [in hopes of proving he's the real 400 pound gorilla and not Alan the phony?] In November I said double digit unemployment and inflation. Let me revise that to double digit unemployment and treasuries. All you bitches saying “hell no” tells me you are twenty something and ten years ago you were playing with Transformers and beating your meat to some Amazon bush bitch you saw in National Geographic.
As you cried out, “Get out of here mom! I’m reading National Geographic.”
As your mom asked, “Richard, who’s your favorite little rascal?”
Maybe we should call Volcker the messiah whisperer. After all, policies that worked so well[?] nearly 30 years ago will dovetail with uncanny accuracy in our new global economy. But you must believe that it will blend. Believe!
Mahnahmahnah bitches
http://www.youtube.com/watch?v=XaFB_sUo6VU
“One bullet. The deer has to be taken with one shot. I try to tell people that, they don’t listen.”
Tangerine Man
@19…0 it will be!!!
@11 Hilarious
EP, have you seen this? http://tinyurl.com/c6mqwm
The folks who are screaming “hyperinflation” have no fucking idea what they are talking about.
It’s the cry-du-jour among the self-impressed but woefully uninformed.
Well #27 what are the arguments against hyper inflation?
28 – The fact that most people now have about a quarter of the access to capital they had before, between assets being destroyed and credit being cut off.
Credit destruction and wealth destruction are severely deflationary.
@ 27
M x V = P X T
You comment that the V currently is low. Agree, Joe Doe is in serious trouble. But let’s look ahead a bit.
Today, US money supply M is ballooning (look up the charts, it is quite something) and will get further upped once the FED starts buying treasuries back — that’s something I’d like to be able to do too: printing money.
So it is a matter of waiting until consumers start spending again before inflation P will skyrocket.
The Japanese are savers, and this is what they kept doing in the 1990s, so V never took off. Saving quotas in the US are up in recent months, suggesting that the US at least for now is leaving conspicuous consumption for what it was, and putting money in the bank. So the V is not picking up yet.
Will it in the future? Let’s look at Japan again.
Japan is an export economy with plenty of cash. The risk averse Japanese who now took to saving also didn’t invest anymore in stocks and the Nikkei never managed to get even to 50% of the early 1990s heights of approximately 40,000. Too much capital chasing a risk free return led to deflation. I guess government reluctance played a big roll — they didn’t deal with the mess (clean out the banks) for 10 years and in the interim, everybody prepared for the worst and hung on to their savings.
The US folks aren’t like the Japanese. If the bail out works and the banks are fixed / nationalized, so that John Doe’s finances are no longer keeping him up at night, the US consumers will return to consume like they always have done. The V will go up and inflation, then, will rise as well.
At the first signs of this upturn and mandatory inflation, America’s creditors will exit their treasuries and interest rates will go sky high. Not because the FED wants to battle inflation, but because the world will loose all faith in the value of the USD in anticipation of the inflation wave (unless someone would raise taxes….to pay back the bail-out…but not sure that will happen).
We are going to see something truly spectacular, and I wish we wouldn’t. The irony is that it’s my faith in the US consumers that will cause the hurt. Buying Farmland is the only investment you won’t regret.
Love to hear other views / ideas.
Cheers, arie
1) With regards to the the matter of where to put your money (gold, silver, treasuries, etc?) — keep it in cash at JPMC or BAC and roll it over in 3-6 month CDs. If inflation blows out, CD rates will blow out as well, and while your money may not earn a real return, it at least will be protected.
2) Buying farmland is not the solution — unless of course you are an experienced farmer with knowledge of soil grades, crops, and the revenue & cost you would expect to generate/incur per acre.
Either you a) think the world is ending so you’re going to grab your gun and move to the boonies and hunt or b) think that the value of your land will inflate in excess of headline inflation.
Both of which I find absurd.
@30
You said:
“The US folks aren’t like the Japanese. If the bail out works and the banks are fixed / nationalized, so that John Doe’s finances are no longer keeping him up at night, the US consumers will return to consume like they always have done. The V will go up and inflation, then, will rise as well.”
For which I reply that the bailout just approved is too small and also diluted by unnecessary tax cuts. For example, putting the “yearly fix” for the ATM in this package cost ten of billions of dollars and could have been done later. Second, Obama’s been brainwashed by Summers and Geithner against nationalization, so those banks are going to continue bleeding the taxpayers for a long time.
So we are going to see insufficient job creation, consumers continuing to save and possibly a deflationary spiral. The hope is that more stimulus of real substance will be provided.
Welcome to the beginning of trickle up poverty. The new fashionable economic policy.
The more I read/think about this, the more I think partial (at first) nationalization of the US banking system is the only way out of this. Thoughts?
What happened to free market capitalism? How come banks can’t fail like other businesses? How come we now have “too big to fail” companies? Think maybe we are going to have stagflation. Also think that the stock market model as we know it may have to change. Think about the companies that decide not to go public. A lot of them are doing fine. Saw an interview this morning of an appliance chain which has never gone public and has not fired a single person. The guy said “you have good years and bad years, when you have good years you prepare for when you have bad years”.
How come all these bankers complain about government intervention, yet offer none of their own solutions to the crisis?
Stagflation is on its way.
I think we would need about 10 to 20 stimulus-type bills to get hyperinflation. In fact, this “new” spending will probably just manage to replace the “old” Iraq war spending (which was probably more stimulative since most engineering jobs involving national security cannot be outsourced).
Stagflation,inflation,hyperinflation (that’s with extra cheese)deflation (0% fat) are all new menus in Charlie Gasbagarumor’s bistro called the Barack’s
@36
Self-preservation, perhaps?
When shit hits the fan, everyone puts up their armor and retreats to a defensive position.
Very few have the cajones to accept the truth (whatever that may be), make the hard decisions (whatever they, too, may be), and still fewer actually have the incentives to do so
GM considering Chapter 11 filing
http://www.reuters.com/article/wtMostRead/idUSTRE51D1Q120090214
Anyone know who might provide DIP financing? Key word, superpriority.
I know what you’re saying bitches, “is there a silver bullet for these pension liabilities? Will it blend? For the love of god is this situation fluid?” Yes, yes, and yes! Don’t worry bitches we will pay for this as well. Pension Benefit Guarantee Corporation, your tax dollars hard at work. Dog shit legislation that does not require companies to fully fund their pensions and once again the taxpayer is the backstop.
http://www.pbs.org/wgbh/pages/frontline/video/flv/generic.html?s=frol02s4baq79&continuous=1
Enron spent around 700 million [that's a guess] in bankruptcy fees. I’m guessing 1.5 for GM. $1,200 an hour for a bankruptcy attorney, now that’s making bank. And who said walls street was run by crooks?
Gangsters and thugs
Criminals and hoods
Some of my friends sell records, some of my friends sell drugs
http://www.youtube.com/watch?v=4ZZ0Ogo2WLo
Up your giggy
Down my spine
Won’t you be
My motherfuck’n Valentine
SPODE
This is who you should be spending your bailout money on:
http://www.cnn.com/2009/US/02/12/octuplets.mom/index.html
Heck, she may may be the messiah for millions of copy cats. Wouldn’t that make you [w|b]ankers happy!
@42- Good god! That one kid, bottom left, looks like death warmed over.
It would be inflationary if this were the pre-globalization 1970′s.
Since we now have a global financial meltdown, the amount of money in an American-exclusive stimulus package will amount to, approximately, a hill of beans.
Gotta fill in the balance sheet holes – business and consumer – before it’s inflationary. Gold is acting like money because that’s what it does in the early stages of deflation.
parasites must take a break so that they can eat more of the host later
@11 Classic
yes we’re creating gobs of dollars to put the cork in the recessionary bucket but so are the Europeans.. Pounds Euros and CHF are being created too.. and canadian/australian/kiwi dollars as well. Only the Japanese (who have been thruough this for 20 years) and the Chinese (who have reserves of all the aforementioned) aren’t “Stimulating” their economies. Ahh the great irony. There will be monetary-driven inflation but in the US and Eurozone, UK and Oceania.
The middle east will continue to be sitting in the crap until their friend inflation brings oil back above their fiscal “break-even” (around $75/bbl).
So we are going to see a great shift in REAL wealth from the western world to the East. An interesting irony. Even if the Chinese consumer isn’t a beast yet it will become one to buy up all those beanie babies and flat screen TVs sitting in Chinese warehouses cuz they can no longer export to the cash and credit poor west!
———–>
B1tches
SPODE
I love EP :-)
Cheers B1tches,
Tanned Banker
http://tinyurl.com/aobskf
Yes, We ARE Drowning In Debt
I vote for the free coinage of silver. free silver in ’12