[If mortgage lenders decide to raise rates because the 10 year bond vigilantees think there is going to be an interest rate hike then credit will contract.]
Nothing to do with deflation.
[Lenders will also stop lending if real estate prices contract. That is not caused by inflation, but rather by a restriction of credit and higher interest rates or by consumers without the ability to borrow.]
So you ought not fear debt.
[It is a vicious circle that can be caused by the bond market crashing which can be caused by the fear of inflation (not necessarily real inflation)or the fear of higher interest rates or perhaps the destruction of the FED legally or illegally.]
So which is it? You seem a bit confused. You should believe what I told you. There's only inflation possible and that's where trouble lies.
[Do I think any of this will happen? No. I don't believe deflation will occur.]
Then you don't believe credit will contract. Just stating what you've already said.
[<Please tell me which banks are "overextended".>
Mortgage lenders and those that buy mortgage backed securities will become overextended and fail if there is a real estate bust.]
I see, the ones that are extended are the ones that will become extended. According to you there won't be a bust becuause you said you didn't believe there will be deflation.
[I am not assuming there will be one, I don't know, this is a theoretical exercise.]
The thing to do is get all the facts down and let them take you where they will evebn if that means they override prejudice.
[<This is outright false. The reserve system is set up so that such discrimination is precluded.>
The FED is not bound by legal agreements.]
The Ny Fed will not and cannot do something in the St louis Fed's district. You're not understanding how democratic the fed system is.
[They convert gold held by the US treasury to IMF "credits" and threaten to loan or sell this gold to hold the gold price in line.]
This is blatantly false. If you said this to just about anyone in finance at even a left wing university, they'd laugh you out. You can't make these kind of wild assertions if you want to be objective about what's happening. Don't believe me? When was the last time Treasury sold gold?
[This is illegal. They also contract with JPM, Barrick and others to short gold for them by lending them gold under the control of the FED.]