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  • daviebri daviebri Aug 8, 2007 2:45 PM Flag

    The Truth About Inflation

    geez, your going to have to make me pull out my eco 101 books ) not arguing certain goods / services have gone up. My point was with 1% Fed Funds rate, and such a relaxed monetary policy, inflation could have really spun out of conrol...albeit we have had huge credit expansion, the underlying strength of the economy is not as robust as many would lead us to believe. Inflation has always been under the FED's watchful eye, but I think concerns are misplaced. Any tightening in the dollar was to keep it above the critical support level of 80 and keep economy's GDP in check. No one can tell us what the true economic damage will be due to both the housing bubble & mortgage defaults. I think we could work it out if it were only one of the two, but both going south at the same time will certainly have a snowball effect on each other...more sub-prime defaults = more foreclosures = tighter credit = no buyers = lower house values = additional selling (2nd homes, vacation homes, rentals etc). Most americans have equity built into their homes if they owned the home for any length of is the biggest ticket item for most homes across-the-board depreciate, equity will be sucked out. Credit expansion and equity loans which helped drive this economy will be at a stand-still. Goods will come down because many Americans will do a 180, going from extreme spending to extreme savings.

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    • The watchful eye of the FED means that they just print more and more money, backed by the IOU's that they give to foreign country's to support our outrageous spending that is supposed to be the backbone of our robust economy? So what if China starts selling those bonds back to us? Where does the money come from? Our robust economy is all built on credit, borrowing from equity in houses that no longer are worth what they were when those debts were incurred. That's not a robust economy, it's a shell game, an nobody knows which shell is hiding that bombshell that's going to explode.

      • 1 Reply to the_bullionaire
      • SLW 13.63 up .32 cents on 2.96 million shares. For all you candlestick fans, that's a shooting star on the daily. You know what that means, right? I hope it's not me and my luck putting the horns on it. Are we about to go back and test the 13.00 to 13.20 level again? Well, I did pop off and had to say I thought it might pull back again. Heck we were just watching prices beginning to start grinding away at that overhead resistance. I wish I could just keep my trap shut and stop causing this stuff. But how can any one person cause it? I'm not one of those multi-billionairs(YET)that move markets! Oh sure, I'm 'the bullionaire' okay, but that's just my moniker like everybody else dreams up for these silly talk-a-thons. This is mostly pretend stuff like when we were kids... right? Nobody's really serious around here are they? Mostly it doesn't seem like it. A couple are, but they like to over do it a little too. Right? Don't tell me. I like to believe it's just entertainment. It beats daytime TV by miles. :)

    • Inflation seems tame MOSTLY thanks to 3rd world countries who peg to USD - namely CHINA!!! Chinese currency went up 9% over the last 2 years and is WAY undervalued by some estimates up to 40%. Anything causing them to unpeg (I know they're not exactly pegged)from USD and dump their USD reserves you see USD crashed and tame inflation in USA going from tame with some concern from the fed to hyper inflation with fed raising rates by full percentage points. Min wage is going up as well which will add to the inflation argument.

      Deflation might follow inflationary (hopefully not hyper inflation) recession if not depression. For that to occur, it will take some time to bring back jobs back to US with people willing to work for minimum wage.

      China is the wild card which can allow USD to fall gradually and for the public not to feel major inflationary pressures. But the government wants Yuan to go open market so figure how that might affect everyday prices and if that wouldn't cause major inflation in the country. All you have to look at is items you buy on daily basis that are made in China and in USA then you can decide how inflation is kept tame at present.

      • 1 Reply to reticiiz
      • Hey reticiiz... not only that, but there's a few other things hanging over our head and keeping the pressure on what might upset the applecart. Al Kaeda comes to mind right away! They keep promising to get us, and I don't see how they can be stopped without an awful lot of luck. We have the ACLU, (American Criminal Liberty's Union) trying everything they can dream up to make this country as vulnerable to terrorists, child preditors and every other kind of crimes that are killing America. Al Kaeda can simply blow up a key oil facility in a foreign country and that could be enough to send oil to $100. How about Iran? I don't think I have to go any further to make my point. Gloom and doom... nobody wants to hear it. Between our security and our economy, all we need to do is just trust our leaders. They'll take care of it... after something else happens. Right now they're all too busy fighting with each other over who's going to be president. They're busy bilking money out of people looking for favors after they get them elected. Yeah, we're in good hands alright. The only ones that might be okay are those astronauts if they find a place to live out there in space, and take along enough supplies like booze to last till things get straightened out here. :)

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