Why do you expact hyperinflation and not deeper deflation

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sosMsos's picture
sosMsos
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Joined: Nov 18 2010
Posts: 42
Why do you expact hyperinflation and not deeper deflation

Lets take Japan, they have a public debt to GDP ratio of about 200%. An d a rate of change in anual debts of +2%

The US have officially a debt to GDP ratio of about 80% with an annual increase of about 20%.

http://www.economist.com/content/global_debt_clock

 

In Japan we have deflation like over 15 years even though the public debts are skyrocketing.

what makes the US and other countries like the EU with equal public debt to GDP ratios so vulnerable to hyperinflation and not deeper deflation?

 

I dont get this,  any country is issuing money as debts - thus its more likely to get deeper in deflation than into hyperinflatio?

+ we have historical evidence of Japan that proves this correlation

+ we have these hughe silver shortages from big banks, implying a hedge vs deflation , that they expect another haircut on debt/ money supply very soon.

this all is a hint to me that we go deeper into deflation. The current inflation is no indicator for hyperinflation.

(We had a drastical deflationary  (debt/ money destruction) move in 2008 and all interventions to guarantee the destructed capital with new debts, will just cause another debt crises a much bigger deflationary move than 2008.)

Poet's picture
Poet
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Joined: Jan 21 2009
Posts: 1892
Re: Why do you expact hyperinflation and not deeper ...

 

Japan's debt is mostly owed to its own citizens, especially the national pension fund. We see deflation there because people feel less economically secure, fewer are earning good salaries, unemployment and under-employment are major issues, etc.

Sure, we could continue to see Japan sink deeper into deflation. Especially when interest rates start rising because people don't want to invest in Japanese bonds anymore, but instead need to spend their life savings on living expenses. The average age is in the mid-40s. The Bank of Japan could print money like it has, but will it get into people's hands and will they spend it if they are reaching middle age and beyond?

Japan's story is not yet played out. So I don't know yet what will happen.

In fact, who are you talking to?!?

Poet

 

sosMsos's picture
sosMsos
Status: Bronze Member (Offline)
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Posts: 42
Re: Why do you expact hyperinflation and not deeper ...

"In fact, who are you talking to?!?"

THis site seems all about hyperinflation, thus i am talking to those who promote it!

Poet's picture
Poet
Status: Diamond Member (Offline)
Joined: Jan 21 2009
Posts: 1892
Re: Why do you expact hyperinflation and not deeper ...
sosMsos wrote:

"In fact, who are you talking to?!?"

THis site seems all about hyperinflation, thus i am talking to those who promote it!

As far as I know, Dr. Martenson is leaning towards hyperinflation, but still hedges his bet because there are powerful arguments on both sides.

Personally, I think it'll be a mixture of both - a biflation, if you will, based on supply, demand, power, scarcity, etc. The cost of labor will remain low and never catch up with even "official" inflation. This will be a good time for employers and porn producers. The cost of health care will continue to rise faster than "official" inflation. This will remain a good time for health insurance companies (but not necessarily doctors or hospitals). This kind of disparity will lead to economic uncertainty and continued malaise.

Poet

sevenmmm's picture
sevenmmm
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Joined: Jan 19 2011
Posts: 108
Re: Why do you expact hyperinflation and not deeper ...

 

The economic engineers have teamed up with the marketing economists and no doubt all reports will come out as the economy is doing fine. 

I think there will be deflation in goods and services that are wanted, and inflation in goods and services that are needed. Richard Heinberg has been saying energy prices will cycle from higher prices - slowing the economy - leading to lower energy prices - that will increase activity. This whipsawing of pricing will negatively effect larger business that relies on stability, and will be a positive to traders (on the right side of the trade). 

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