Deflation is Setting In

[Master slacker]

...and the money supply will shrink even more.

The gov't will then decide to take / spend more of your money.

 

[wilheldp_PE]

Okay, here’s a deal. Anybody who thinks we’re headed into another Great Depression – 1.Define that for me.

2.Tell me when it’s going to happen.

Then, when that time comes, if it doesn’t occur these people can admit once and for all they know no more about economics than anybody else. If you can't do this, you're just blowing smoke.

I’m not saying I know it won’t ever happen. I’ve just been hearing this for 35 years and I’m wondering if somebody could just put up or shut up about this prediction. Frankly, I’m still not worried about it. I’m actually more concerned about inflation myself.

That prediction cannot be made by anybody because nobody knows what the government is going to do next to try to fix the economy (thereby accelerating the decline). And there will likely never be another Great Depression, at least not one exactly like the first one. The first one was caused by (with parallels to situations today in parenthesis):

1. Cyclical bust cycle in the economy (Check)

2. Over-indebtedness caused by the roaring 20's spending mentality (Check; the tech and housing bubbles, with negative savings rates)

3. The great stock market crash (No outright crash, but the housing bubble put a hurting on the Dow)

4. The dust bowl (Nope; We aren't an agricultural superpower any more, so this wouldn't hurt as bad now anyway).

5. Terrible monetary policy (Huge Check; ridiculous levels of deficit spending; tariffs on foreign goods)

6. Deflation (This is why I'm worried...this was basically the last thing that started happening before the GD hit it's worst levels).

The GD started as a really bad recession in 1930 started by the stock market crash in 1929. It wasn't the full-blown Great Depression until 1933. During that time, we got up to 23+% unemployment and bank failures started happening left and right. We are close to double digit unemployment already, and accelerating right now, and bank failures are picking up too.

We may well avoid a protracted depression, and I really hope we do, but all of the indicators from the last one are there, and the government seems bound and determined to make the same mistakes as last time.

 

[benbo]

We may well avoid a protracted depression, and I really hope we do, but all of the indicators from the last one are there, and the government seems bound and determined to make the same mistakes as last time.

In other words you don't know, you can make any dire hyperbolic predictions you want, and nobody can find out if you were correct.

 

[wilheldp_PE]

In other words you don't know, you can make any dire hyperbolic predictions you want, and nobody can find out if you were correct.

In other words, you didn't read any of my post, and just want to try to disprove my predictions without doing any research of your own.

 

[testee]

I've always considered deflation a good thing.

 

[dastuff]

I've always considered deflation a good thing.

Not for everyone paying off student loans

 

[Dleg]

....This is the first step from the Great Recession to the Great Depression II.

 

[wilheldp_PE]

Roadwreck beat you to it.

 

[roadwreck]

Roadwreck beat you to it.

yea, but it's such a great smiley you really can never have enough of them in one thread.

 

[wilheldp_PE]

yea, but it's such a great smiley you really can never have enough of them in one thread.

I like that when I quoted 2 of them, they weren't synchronized...it looks like one is chasing the other.

 

[benbo]

I will say this - for the first time recently I have heard about the US dollar being replaced as the worldwide reserve currency. If that actually happens then I think there may actually be something to this and something to be concerned about.

I still wouldn't panic though.

 

[wilheldp_PE]

Iraq and Iran have both been talking about switching from the Petrodollar to the Petroeuro for about a decade now. The big news this morning is that Saudi Arabia is talking about it now.

 

[csb]

And they've been wiping their ***** with the constitution!

Wait, wrong debate? Sorry.

 

[RIP - VTEnviro]

I've always considered deflation a good thing.

Well you need to get a pump and get that thing inflated again!

 

[Dleg]

Why wipe your ass with the Constitution, when the Declaration of Independence is printed on such nice, soft, septic-tank safe paper?

 

[FLBuff PE]

While you are at the National Archives, why not also wipe your ass with the Magna Carta?

 

[Dleg]

Last time I did that, I got a splinter.

 

[Capt Worley PE]

Interesting history of recessions and depressions.

http://en.wikipedia.org/wiki/List_of_reces...e_United_States

 

[csb]

Seems like the 19th Amendment would be printed on something soft and delicate

 

[Capt Worley PE]

I consider the 18th to be worthy of TP duty.