Here comes the Inflation

[The Third Man]

Remember Weimar Germany? The Obama doctrine continues to hurt America.

Fed officials decided to go ahead with a much anticipated program, saying they will buy $600 billion of U.S. government debt over the next eight months.

http://online.wsj.com/article/SB10001424052748703506904575592471354774194.html?m od=WSJ_hp_LEADNewsCollection

[Takeda Shingen]

The Obama Doctrine is unchanged from the Bush Doctrine, and neither has anything to do with inflation. They are terms relating to foreign policy. You are refering to Obama's economic policies.

[The Third Man]

The Obama Doctrine is unchanged from the Bush Doctrine, and neither has anything to do with inflation. They are terms relating to foreign policy. You are refering to Obama's economic policies.

No I'm speaking of the Obama Doctrine. Economics is part of his doctrine. Look at the czars and see the doctrine, domestically. Bowing to foriegn despots, and ignoring historical allies, is his foreign policy.

But it is only the beginning of the Obama Doctrine which is to destroy the United States. Remember he said the people of the US are enemies.

[Takeda Shingen]

No I'm speaking of the Obama Doctrine. Economics is part of his docctrine. Look at the czars and see the doctrine, domestically. Bowing to foriegn despots, and ignoring historical allies, is his foreign policy.

But it is only the beginning of the Obama Doctrine which is to destroy the United States. Remember he said the people of the US are enimies.

All well and nice, but use the correct terms.

http://en.wikipedia.org/wiki/Bush_Doctrine

http://en.wikipedia.org/wiki/Obama_Doctrine

30 seconds worth of Googling can save a lot of embarrassment.

[The Third Man]

That is why I asked you what you thought Bush doctrine meant in the other thread. Wiki is but one , but not the only opinion. In my mind Doctrine is not only foriegn policy in nature.

[mookiemookie]

Just because you've changed the definition for yourself doesn't mean the definition has been changed.

[Takeda Shingen]

That is why I asked you what you thought Bush doctrine meant in the other thread. Wiki is but one , but not the only opinion. In my mind Doctrine is not only foriegn policy in nature.

Okay, and that is fine. Just know that *blank* Doctrine (Obama, Bush, Reagan, Nixon, Roosevelt, et al) is a foreign policy term used as such to compare and contrast with the Monroe Doctrine, which is exactly why the suffix 'doctrine' is attached. In short, doctrine = foreign policy in political lexicon.

[The Third Man]

Just because you've changed the definition for yourself doesn't mean the definition has been changed.

So the Bush doctrine doesn't apply to domestic policy? Is that what you are saying?

[Takeda Shingen]

So the Bush doctrine doesn't apply to domestic policy? Is that what you are saying?

I don't know if he is saying that. If he were, though, he would be correct.

[The Third Man]

Here comes the inflation! Is your wheel barrow ready to buy bread? Obama doctrine.

[mookiemookie]

Here comes the inflation! Is your wheel barrow ready to buy bread? Obama doctrine.

Repeat it until it's true?

Kind of hard to have inflation with a liquidity trap. Think Japan, not Germany.

[The Third Man]

Repeat it until it's true?

Kind of hard to have inflation with a liquidity trap. Think Japan, not Germany.

Repeat until back on topic is a better descriptor. Yep, because Japan hasn't been in an inflation induced duldrum for the last 20 years, and Weimar ended much earlier. But at what cost?

[Takeda Shingen]

I thought what I said was very topical. If any meaningful discussion is to occur, the correct terms must be used. Terms are static, not fluid, and they exist to provide common understanding.

I disagree with the Obama administrations continuation of the policies of big government and higher taxes. I do not think they will, however, result in six-digit bread prices.

[The Third Man]

I thought what I said was very topical. If any meaningful discussion is to occur, the correct terms must be used. Terms are static, not fluid, and they exist to provide common understanding.

Really? Fags used to be cigarettes. Did that change?

[Takeda Shingen]

Really? Fags used to be cigarettes. Did that change?

'Doctrine' used as terminology is not slang.

[The Third Man]

'Doctrine' used as terminology is not slang.

Nor is 'a well regulated militia' but it is argued.

[Ducimus]

http://www.subsim.com/radioroom/picture.php?albumid=132&pictureid=802

[Takeda Shingen]

Nor is 'a well regulated militia' but it is argued.
You've still got to use the correct terms when discussing the matter, and I still think that your wheelbarrow analogy is a gross exaggeration.

[The Third Man]

And the terms have to be agreed upon. In my mind Doctrine is all inclusive of a president's policy on all fronts.

Are you ready to compromise?

[AVGWarhawk]

http://i133.photobucket.com/albums/q62/avgwarhawk/worfisfrustratedrh3.gif

[Takeda Shingen]

And the terms have to be agreed upon. In my mind Doctrine is all inclusive of a president's policy on all fronts.

Are you ready to compromise?

I never compromise fact to suit opinion. While it makes me a poor politican, I find it makes me an honest human being.

[Ducimus]

http://i76.photobucket.com/albums/j24/joebnfran/blog%20pics2/bubbleboy.jpg
edit: Not Takeda

[Oberon]

http://i3.photobucket.com/albums/y67/Strider_Kage/sisko_facepalm.gif

[mookiemookie]

http://i198.photobucket.com/albums/aa140/tesla_mw/picard-face-palm.gif

[The Third Man]

I never compromise fact to suit opinion. While it makes me a poor politican, I find it makes me an honest human being.

Well then you can allow me to say Obama's policies are his doctrine. Because you are unwilling or unable to show the tolerance or want of compromise you claim to hold as an independent or leftist individual.

[Takeda Shingen]

Well then you can allow me to say Obama's policies are his doctrine. Because you are unwilling or unable to show the tolerance or want of compromise you claim to hold as an independent or leftist individual.

You can say it, but expect to be corrected. I do understand that to you, as a Neo-Conservative, terms and fact are flexible when in defense of The Party, but it is not so in true conservatism. As such, I will continue to call you on it.

[The Third Man]

You can say it, but expect to be corrected. I do understand that to you, as a Neo-Conservative, terms and fact are flexible when in defense of The Party, but it is not so in true conservatism. As such, I will continue to call you on it.

And you wonder why compromise will never be possible between your leftist/communist leanings and my patriotic leanings.

[Takeda Shingen]

And you wonder why compromise will never be possible between your leftist/communist leanings and my patriotic leanings.

No, sir. Neo-Conservatism is an aberation; a corrupted form of true conservatism that willingly betrays it's principles in the name of maintaing power for The Party. Neo-Conservatism has destroyed The United States of America, the Republican Party and the name of conservatism. There can be no compromise with those of such a philosophy. America needs Pat Buchanans, but all Team R gives us are Newt Gingriches, of which this Boenher is yet another copy; a continuation of the politics of failure. The patriotism of the Neo-Conservatives is an illusion; they willingly throw the nation under the bus as convenience dictates.

Neo-Conservatives are no better than the Progressives they have replaced, and this country will not improve unless they are both relegated to the trash heap of history.

[The Third Man]

No, sir. Neo-Conservatism is an abberation; a corrupted form of true conservatism that willingly betrays it's principles in the name of maintaing power for The Party. Neo-Conservatism has destroyed The United States of America, the Republican Party and the name of conservatism. There can be no compromise with those of such a philosophy. America needs Pat Buchanans, but all Team R gives us are Newt Gingriches, of which this Boenher is yet another copy; a continuation of the politics of failure. The patriotism of the Neo-Conservatives is an illusion; they willingly throw the nation under the bus as convenience dictates.

Neo-Conservatives are no better than the Progressives they have replaced.

See. Patriotism means removing Barack Obama from office.

[Takeda Shingen]

See. Patriotism means removing Barack Obama from office.

No, patriotism means removing Obama and the progressives and the neo-conservatves. Fracture both parties. Create a coalition government. Destroy what is the failure of political dualism. It will not happen though. Too many people like you will see to it's continuance.

[The Third Man]

No, patriotism means removing Obama and the progressives and the neo-conservatves. Fracture both parties. Create a coalition government. Destroy what is the failure of political dualism. It will not happen though. Too many people like you will see to it's continuance.

What you ask for now is a parlimentary coalition ideal, on the Euro model. To have what you want would require a change in our constitution to implement.

PS Doctrine means what when it comes to Christainity? Is it only foreign policy?

[Takeda Shingen]

What you ask for now is a parlimentary coalition ideal, on the Euro model. To have what you want would require a change in our constitution to implement.

Yes it would. And it would force government to govern from the center, which is a good thing, as I believe that most of the American people are in favor of the following:

1. Bringing the troops home and ending the doctrine of intervention.

2. Less personal intrusion by government.

3. Lower taxes.

4. Enforcement of immigration laws.

5. An end of the support of economic globalism.

Sadly, the track records of both the Republicans and Democrats are out of step with those items. So long as we do not have other options, America's decline will only accelerate. But what do you care, so long as your party is in power? Nation be damned.

[The Third Man]

Yes it would. And it would force government to govern from the center, which is a good thing, as I believe that most of the American people are in favor of the following:

1. Bringing the troops home and ending the doctrine of intervention.

2. Less personal intrusion by government.

3. Lower taxes.

4. Enforcement of immigration laws.

5. An end of the support of economic globalism.

Sadly, the track records of both the Republicans and Democrats are out of step with those items. So long as we do not have other options, America's decline will only accelerate. But what do you care, so long as your party is in power? Nation be damned.


All good ideals. No argument there, but the devil is in the details and remember there could be greater geo-political functions in play. Which means lives, both quality of, and loss of.

[The Third Man]

doctrine of intervention.

This is your major issue with GWB? No? But RFD did the same thing after 07 DEc 41. Remember Clinton's intellagences forces, as well as Euro spy places identified Saddam and his government as bad actors and supporters of Al Queda.

[tater]

I call myself a "lower case" libertarian because I don't sign on to the isolationism the actual party likes (I'm also pragmatic enough to only vote for someone who can actually win, since letting the one farthest away from my goals win would be idiotic).

The US occupies a unique geopolitical position in the world. Without us, someone would need to invent us. Still, hard to find a similarly 2-oceaned replacement. Like it or not, the US needs to be prepared to fight wars when others won't—someone has to.

I should add that you need to look at what the geopolitical goal of the US actually is. It's not what many might think.

[Takeda Shingen]

All good ideals. No argument there, but the devil is in the details and remember there could be greater geo-political functions in play. Which means lives, both quality of, and loss of.

Well, globalism and intervention haven't contributed to the quality and protection of life either, as they have made us no safer than we were in 2001 and significantly less prosperous. One of the primary reasons that economic recovery remains elusive has nothing to do with the stimulus. The stimulus was a red herring; it masked a power-grab by the progressives with the economy as an excuse. There was no way that the stimulus was going to fix anything. It has not failed, as that is not what it was intended to do. In fact, the stimulus was very, very successful; brilliantly so.

The reason that the economy has failed to improve is that the backbone has been long removed from America's economy: Globalism has sent our heavy industry overseas. Americans don't have jobs because there are not any jobs to give them. And need I remind anyone that the road to globalism was not paved by the progressives. It was, rather, a betrayal of of the principles of conservatism by the members of the Republican Party.

[CaptainHaplo]

To use the correct terminology, you should say "agenda" or "policy" instead of "doctrine". Politically speaking, doctrine does infer a view or action in foreign affairs, while agenda or policy are associated with domestic issues.

But more importantly - is it worth spending 2 pages on arguing the semantics when you both know what you each meant by your comments? Lets instead debate the OT:

Putting 600 billion into the economy sounds good - but its not that they are "buying" it - they are printing the money first to inject into the economy through the "purchase" - which devalues the worth of the dollar further, as if it wasn't low enough.

[nikimcbee]

Did I miss any of the fun?

Just wait for the gas\petrol prices to go up, then the party starts:shifty:

[Takeda Shingen]

.

This is your major issue with GWB? No? But RFD did the same thing after 07 DEc 41. Remember Clinton's intellagences forces, as well as Euro spy places identified Saddam and his government as bad actors and supporters of Al Queda.

You're reading too much into it. Simply, it is my problem with the course of politics, particularly since the late 1960's. I also find it perplexing that you continue to hold up leftists as examples, as if they were my personal heroes. My point is not that progressives are good; I believe I have clearly stated to the contrary, and done so repeatedly. My point is that the Neo-Conservative Republican Party is no better, as evidenced by their track record, and that their return to power is nothing to be excited about.

[Takeda Shingen]

To use the correct terminology, you should say "agenda" or "policy" instead of "doctrine". Politically speaking, doctrine does infer a view or action in foreign affairs, while agenda or policy are associated with domestic issues.

Then we'll be sure to go back to the history books and rename it the Monroe Policy. Kidding aside, 'doctrine' is well-established as a term for foreign policy. Domestic issues tend to be covered by 'policy'. In terms of being important in the discussion, it is important to me, and as such I pursued the matter.

[Dowly]

.

This is your major issue with GWB? No? But RFD did the same thing after 07 DEc 41. Remember Clinton's intellagences forces, as well as Euro spy places identified Saddam and his government as bad actors and supporters of Al Queda.

RFD acted after US soil was attacked, same with Bush and Afghanistan. But Iraq, well, to this date there has been no valid reason for the "liberation". The alleged Hussein - Al Qaeda links were debunked almost immediately after the Coalition gave it as yet another excuse for the "liberation" (you know, after they didn't found WMD's and all that). :O:

[The Third Man]

There you go again. I was with you until you blamed it on conservative values. It wasn't conservatives who have stop businesses or water over a two inch long fish.

[The Third Man]

RFD acted after US soil was attacked, same with Bush and Afghanistan. But Iraq, well, to this date there has been no valid reason for the "liberation". The alleged Hussein - Al Qaeda links were debunked almost immediately after the Coalition gave it as yet another excuse for the "liberation" (you know, after they didn't found WMD's and all that). :O:

But WMD's were found. Only classified. Look at wikileaks.

[Ducimus]

The reason that the economy has failed to improve is that the backbone has been long removed from America's economy: Globalism has sent our heavy industry overseas. Americans don't have jobs because there are not any jobs to give them. And need I remind anyone that the road to globalism was not paved by the progressives. It was, rather, a betrayal of of the principles of conservatism by the members of the Republican Party.

And of course, nothing will be done about it. All the politicians want, is to further their personal careers, power, and wealth. I haven't heard of anyone making a serious effort to address this. By the time this becomes forefront to the public concious, at a level where the politicans will have no choice but to address it - it will be too late.

The republicans will continue to do what they've always done, the democrates will as well, and neither will allow anything to pass so long as the other exists. Furthermore, anyone who thinks either party will save the country is a fool. Our slide into the ditch's is a foregone conclusion, the real question that remains, is how long do we have before everything officially goes to s**t?

[Takeda Shingen]

There you go again. I was with you until you blamed it on conservative values. It wasn't conservatives who have stop businesses or water over a two inch long fish.

No, but they (so-called 'conservatives') brought us NAFTA (devised and cerimonially signed under GHW Bush) and globalism. They are just as responsible.

EDIT: Dowly's point is that it is a war that should never have been fought, and one that has had disasterous consequences for America. He is correct in that assertion.

[The Third Man]

No, but they brought us NAFTA (devised and cerimonially signed under GHW Bush) and globalism. They are just as responsible.


Ahhh, NAFTA was a Clinton measure. The agreement came into force on January 1, 1994.

[Gorduz]

Isnt inflating your debt away the only option for america on the long term?

[Takeda Shingen]

Ahhh, NAFTA was a Clinton measure. The agreement came into force on January 1, 1994.

Agreed to by the US, Canada and Mexico on 17 December, 1992, as overseen by lame duck President George H. W. Bush. Thought it was a great idea too. It was his baby. Sorry, you can't pass that one off on the left.

[The Third Man]

Isnt inflating your debt away the only option for america on the long term?

That is the issue. Some say it is not others say it is. That is the point of this video.

http://www.youtube.com/watch?v=OTSQozWP-rM&feature=player_embedded

[The Third Man]

Agreed to by the US, Canada and Mexico on 17 December, 1992, as overseen by lame duck President George H. W. Bush. Thought it was a great idea too. It was his baby. Sorry, you can't pass that one off on the left.

But treaties can only be ratified by the Senate. You know the rest.

[tater]

NAFTA? Yawn.

[Takeda Shingen]

But treaties can only be ratified by the Senate. You know the rest.

You're right, the left was certainly going to be in favor of such an act, but I would never expect it from the so-called right. You can't ratify something that hasn't been proposed, and the negotiations for NAFTA date back to 1986. Who was the president then? :hmmm:

[The Third Man]

Agreed to by the US, Canada and Mexico on 17 December, 1992, as overseen by lame duck President George H. W. Bush. Thought it was a great idea too. It was his baby. Sorry, you can't pass that one off on the left.

But isn't it so that treaties are ratified by the senate? Who controlled the senate in the 1992-1994 time frame?

[Ducimus]

Avoidance, and denial is fun to watch. :har:

[Takeda Shingen]

NAFTA? Yawn.

I agree that it is dull as hell. Just trying to illustrate the damage done in the name of Neo-Conservatism. Still, point taken; I won't go on too much longer as I do have things to do this evening.

[The Third Man]

I agree that it is dull as hell. Just trying to illustrate the damage done in the name of Neo-Conservatism. Still, point taken; I won't go on too much longer as I do have things to do this evening.

So we are back to much blame to go around. Ready to compromise yet?

[Takeda Shingen]

So we are back to much blame to go around. Ready to compromise yet?

Compromise with what? I've refuted you at every turn of this discussion. Are you ready to cry uncle yet?

[The Third Man]

Compromise with what? I've refuted you at every turn of this discussion. Are you ready to cry uncle yet?

And you wonder why PA went Republican in such a major way. Allentown excluded. hahaha

[Takeda Shingen]

And you wonder why PA went Republican in such a major way. Allentown excluded. hahaha

And that's all you've got left. Good time for me to bow out. Enjoy your evening.

[The Third Man]

And that's all you've got left. Good time for me to bow out. Enjoy your evening.

No compromise from the left expect none from the right.

[CaptainHaplo]

Article II. Section 2 of the Constitution gives the power to NEGOTIATE treaties to the President - which in 1986 was Reagan.

The Congress of 1986 was split - the Senate was controlled by Republicans by a 53/47 margin. The House was controlled by Democrats with a 253/182 majority. However, it was not ratified by this Congress.

It was signed in 1992 by George Bush, however the signing was cermonial, as negotiations were completed after Bill Clinton came to power.

So the real question is - who is RESPONSIBLE for the ratification?

NAFTA was ratified by the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. It was later signed into law by President Clinton.

NAFTA is one of the biggest mistakes of the Reagan era - and the responsibility for it lays squarely on the Republican party. If you disagree, please use FACTS on how it came into existence to demonstrate how it is the fault of another group.

[The Third Man]

Article II. Section 2 of the Constitution gives the power to NEGOTIATE treaties to the President - which in 1986 was Reagan.

The Congress of 1986 was split - the Senate was controlled by Republicans by a 53/47 margin. The House was controlled by Democrats with a 253/182 majority. However, it was not ratified by this Congress.

It was signed in 1992 by George Bush, however the signing was cermonial, as negotiations were completed after Bill Clinton came to power.

So the real question is - who is RESPONSIBLE for the ratification?

NAFTA was ratified by the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. It was later signed into law by President Clinton.

NAFTA is one of the biggest mistakes of the Reagan era - and the responsibility for it lays squarely on the Republican party. If you disagree, please use FACTS on how it came into existence to demonstrate how it is the fault of another group.

If we all agree it was a bad idea, I don't see any reason not to repeal NAFTA. Do you?

Add it to list of things for the new congress to accomplish. Unless it will be called racist.

[The Third Man]

Back on topic....inflation is on it's way. Like the Carter Administration, Obama doesn't know how to bring back an ailing economy which he wants to 'share the wealth' without hurting his country.

[CaptainHaplo]

TTM - unfortunately not everyone agrees that it was a bad idea. Repealing it isn't as simple as repealing a US law, because it is now an international treaty. Abrogating it is alot more difficult, sad as it is.

What should be done is a restructuring of it, but there is no political will to do so.

[The Third Man]

TTM - unfortunately not everyone agrees that it was a bad idea. Repealing it isn't as simple as repealing a US law, because it is now an international treaty. Abrogating it is alot more difficult, sad as it is.

What should be done is a restructuring of it, but there is no political will to do so.

That is if you agree that national sovereignty has no value. Repeal NAFTA and see how it goes. 200 years without NAFTA wasn't harmful as I read the history. And it could bring jobs back.

[tater]

I agree that it is dull as hell. Just trying to illustrate the damage done in the name of Neo-Conservatism. Still, point taken; I won't go on too much longer as I do have things to do this evening.

What damage?

I don't get all worked up about protective tariffs that exist pretty much just to make unions look more cost-effective.

[CaptainHaplo]

Nafta and Cafta were / will be devestating to the American economy. I have a problem with the idea of "neo-conservatism" - its a false term. It should be called "faux-conservatism". Still, the term is accepted today.

[mookiemookie]

Back on topic....inflation is on it's way. Like the Carter Administration, Obama doesn't know how to bring back an ailing economy which he wants to 'share the wealth' without hurting his country.

How then is inflation on it's way? Can you explain to me the mechanism by which it's going to happen?

In order to have inflation, you have to have velocity (average rate at which $1 is spent). Where's the velocity? Are debt strapped consumers going to start spending? How could they when wages and credit are depressed? Are companies running at half capacity that are already sitting on gobs of cash going to start spending and hiring like crazy? Corporate R&D spending has declined for the first time in over 10 years. Are banks, again sitting on gobs of cash, going to start lending more? How can they when consumers FICO scores are in the toilet and 25% of homeowners are upside down? Are they going to lend to businesses? What business needs to expand when capacity utilization is just coming off 50 year lows?

I don't think you've thought this through.

[CaptainHaplo]

Mookie - inflation is when an individual currency is devalued. Printing more money without anything additional to back it - means each individual dollar that is in circulation is worth fractionally less. You know this.

[Takeda Shingen]

I don't think you've thought this through.

That is much of the reason for my pressing of the point. When forced to defend his opinion, one gets the clear impression that it is something that the OP formed about 15 minutes before posting it. Half-baked ideas are an annoyance for the 'opposition', and a menace for those in agreement.

[mookiemookie]

Mookie - inflation is when an individual currency is devalued. Printing more money without anything additional to back it - means each individual dollar that is in circulation is worth fractionally less. You know this.

Inflation is a sustained increase in the general level of prices. Your definition ignores velocity, which is an integral part of the quantity theory of money (MV=PY), which has become one of the most basic and unifying formulas in all of economics. "Inflation = increase in money supply" is an outdated and defunct definition and surely doesn't explain Third Man's assertion that we're going to need wheelbarrows of cash to purchase bread.

[CaptainHaplo]

Mookie:

"In monetary economics, the quantity theory of money is the theory that money supply has a direct, proportional relationship with the price level."

http://en.wikipedia.org/wiki/Quantity_theory_of_money

"The quantity theory of money states that there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold"
"Another way to understand this theory is to recognize that money is like any other commodity: increases in its supply decrease marginal value (the buying capacity of one unit of currency). So an increase in money supply causes prices to rise (inflation) as they compensate for the decrease in money’s marginal value."

http://www.investopedia.com/articles/05/010705.asp

Printing money to "buy" something - in this case injecting it into the stock market where it will change hands rapidly - aka your velocity argument (as investments, gains and losses will continually happen with it), will end up with a final result of 600 Billion more dollars with no backing being in circulation - thus lessening the real or percieved value of the dollar as it stands today. Lessen the worth of the dollar, and prices rise to compensate and equate to the old value of the goods. Thus, prices rise. Which equals inflation.

However, this amount alone would not trigger inflation or hyperinflation (which would be required to need wheelbarrows to by bread), but with the existent economic conditions as they are, it may be enough to trigger a round of inflation that was not expected.

Though exagerrating, I suspect this was the point the OP was attempting to make.

[mookiemookie]

Mookie:

"In monetary economics, the quantity theory of money is the theory that money supply has a direct, proportional relationship with the price level."

http://en.wikipedia.org/wiki/Quantity_theory_of_money

"The quantity theory of money states that there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold"
"Another way to understand this theory is to recognize that money is like any other commodity: increases in its supply decrease marginal value (the buying capacity of one unit of currency). So an increase in money supply causes prices to rise (inflation) as they compensate for the decrease in money’s marginal value."

http://www.investopedia.com/articles/05/010705.asp Exactly my point. Money supply size has a bearing on inflation, but it is not in and of itself inflation. You cannot have higher sustained levels of prices (inflation) without velocity. An increase in the money supply alone is not inflation. If they printed up a million tons of $100 bills and locked it away in a vault 100 miles underground, would you argue there was inflation? Would the very existence of that million tons of money have any bearing on the money in your wallet? Or the price of bread at the store? No, of course not. It's as if it doesn't exist. Or, think of it this way. Would the existence of gold on a planet a billion light years from Earth affect the price of gold here today? Without velocity, there cannot be inflation. Without access to money, there cannot be velocity. Without wage inflation or banks willing to loosen credit standards, there cannot be increased access to money.

Printing money to "buy" something - in this case injecting it into the stock market where it will change hands rapidly - aka your velocity argument (as investments, gains and losses will continually happen with it), will end up with a final result of 600 Billion more dollars with no backing being in circulation - thus lessening the real or percieved value of the dollar as it stands today. Lessen the worth of the dollar, and prices rise to compensate and equate to the old value of the goods. Thus, prices rise. Which equals inflation. Whoa, whoa, whoa, back the truck up. You misunderstand exactly what's happening here. The money is not being injected into the stock market. The Fed is buying Treasury securities from banks. That has the effect of injecting money into the banking system, not the stock market. The idea is that with more money, banks will be more willing to lend, as the credit system is how money is effectively "created". My question is how are banks going to get this money into the hands of consumers, when they're unwilling to lend and credit is in low demand or inaccessible? This is what's known as a liquidity trap. A liquidity trap occurs when there's a breakdown in the effectiveness of monetary policy. Adding more money to the system or lowering rates has no effectiveness on economic activity. This is what happened with the Bank of Japan in the 90's, and I think is what the danger is for our system today.

However, this amount alone would not trigger inflation or hyperinflation (which would be required to need wheelbarrows to by bread), but with the existent economic conditions as they are, it may be enough to trigger a round of inflation that was not expected. The Fed is indeed trying to trigger inflation. See Bernanke's rationale here:
Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling. In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which can contribute to long periods of economic stagnation.

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html

[bookworm_020]

There is little to no tariff protection left here in Australia. We let out Dollar float freely (up and down, it can be a wild ride!), there is free trade agreements with other countries (including the US and maybe in the future China).

We are having surpluses (helps when you have a lot of minerals in the ground that everyone wants), interest rates (4.75% Australian reserve bank [7.5 real world] and rising:-?) and an Aussie dollar that is worth more than the U.S.!

We know how it feels in the U.S., U.K and elsewhere (we've been there, done that and have the scars to prove it). I do hope that you can get yourselves out of the mess your in soon. It will take some time, some pain and both sides working together to get through.

Good Luck!

[The Third Man]

How then is inflation on it's way? Can you explain to me the mechanism by which it's going to happen?



The Fed is monetizing the debt. In lay terms it means printing more greenbacks without the increased economic output. Which means each dollar is worth less. Inflation. Weimar. Look at the effect of raising M2 in any economy without an equal economic output.

[XabbaRus]

Well the bank of England has been printing money for about 2 years now and it hasn't had that much of an effect in inflation and interst rates are still at 0.5%

[joegrundman]

there is however a lag time between increase of money supply and inflation equalising it out that governments hope to benefit from in the short term. It can work too.

a) this is a commonplace occurrence with modern economies in difficult financial positions
b) it's highly unlikely to turn into a Weimar situation despite the hyperventilating nonsense from certain people

[XabbaRus]

What we need is a good old fashioned war. Noen of these litle theatre conflicts

Something big, state on state...

It's about time.

[Fish]

But it is only the beginning of the Obama Doctrine which is to destroy the United States. Remember he said the people of the US are enemies.


Right, he wil not stop before de US is a commie moslim state.
Where's my tinfoil hat. :shucks:

[Oberon]

What we need is a good old fashioned war. Noen of these litle theatre conflicts

Something big, state on state...

It's about time.

We'd need something to fight it with first! :haha:

[HunterICX]

We'd need something to fight it with first! :haha:

As long Britain has trees to carve Hurricanes from, then you do not have to worry :D

HunterICX

[Gerald]

:har:

[mookiemookie]

The Fed is monetizing the debt. In lay terms it means printing more greenbacks without the increased economic output. Which means each dollar is worth less. Inflation. Weimar. Look at the effect of raising M2 in any economy without an equal economic output.

No inflation without velocity.

The number of Americans on food stamps is up more than 58 percent since August 2007. http://blogs.wsj.com/economics/2010/11/04/some-14-of-us-uses-food-stamps/
Where the pricing power for food and restaurants? How can they inflate their prices if no one is there to spend money?

The "official" unemployment rate in the United States has been at 9.5 percent or above for 14 consecutive months. Wheres the money come from if there's no wage inflation pressure?

One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government. http://www.usatoday.com/news/washington/2010-08-30-1Asafetynet30_ST_N.htm
How can you have higher prices if no one has money to spend?

The American Bankruptcy Institute says that there will be about 1.6 million consumer bankruptcies in 2010. http://www.abiworld.org/AM/Template.cfm?Section=Home&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=62333
How do you spend money in bankruptcy?

Again, you haven't thought this through.

[tater]

What was the velocity like in the early 1920s in Germany?

I know little about the theory of this, I imagine there are probably 2 models where economics want to kill each other over which campo they are in (as is true in most academic disciplines).

[Dimitrius07]

Remember Weimar Germany? The Obama doctrine continues to hurt America.



Well.:DL Everything Hitler done in the moment he came to power this idiot is doing right now. In addition he want to start a racial war against Whites, Blacks and so on.... People like Obama (judging by his behaviour) never faced the word "no" in his life. So that mean, sooner or later he will close the internet. The only place were he get the true meaning of the "NO" in the face. I want to see how this maniak is going to drag us away from Jerusalem. Over my dead body he will do it :yep:.

[mookiemookie]

What was the velocity like in the early 1920s in Germany?

I know little about the theory of this, I imagine there are probably 2 models where economics want to kill each other over which campo they are in (as is true in most academic disciplines).

Unemployment in Weimar Germany was very very low - less than 3%. Everyone had a job, everyone had money to spend. Naturally, that lead to higher velocity.

[Tchocky]

Well.:DL Everything Hitler done in the moment he came to power this idiot is doing right now. In addition he want to start a racial war against Whites, Blacks and so on.... People like Obama (judging by his behaviour) never faced the word "no" in his life. So that mean, sooner or later he will close the internet. The only place were he get the true meaning of the "NO" in the face. I want to see how this maniak is going to drag us away from Jerusalem. Over my dead body he will do it :yep:.


That's.......

[Buddahaid]

That's.......

Trolling.

[Dimitrius07]

That's.......

What? Speak! What are you don`t understand, the healthcare system? :cool:

[tater]

Unemployment in Weimar Germany was very very low - less than 3%. Everyone had a job, everyone had money to spend. Naturally, that lead to higher velocity.

Makes sense, with so many of the employment age men dead.

That was part of the solution of WW2 to FDR's depression, actually. Not hyper-spending on the part of the government for the war, but the war employing millions, and killing hundreds of thousands.

Again, I'm a physics geek, not an economist, but presumably that explains the deflationary aspect (at least partially) of the 30s in the US? High unemployment, tight monetary policy?

[Buddahaid]

Makes sense, with so many of the employment age men dead.

That was part of the solution of WW2 to FDR's depression, actually. Not hyper-spending on the part of the government for the war, but the war employing millions, and killing hundreds of thousands.

Again, I'm a physics geek, not an economist, but presumably that explains the deflationary aspect (at least partially) of the 30s in the US? High unemployment, tight monetary policy?

You're saying the president was counting on the deaths to fix the economy?

[Oberon]

As long Britain has trees to carve Hurricanes from, then you do not have to worry :D

HunterICX

:har::up:

Although I don't know if we could afford Hurricanes...it might come down to:

http://www.airforce.gov.au/raafmuseum/exhibitions/interactive/images/Pup-02.jpg

[tater]

You're saying the president was counting on the deaths to fix the economy?

Why would you even suggest that?

I'm saying that the deaths DID help stop the Depression be reducing the % unemployed.

[Buddahaid]

Why would you even suggest that?

I'm saying that the deaths DID help stop the Depression be reducing the % unemployed.

Just read your post that way and had to ask.

[Tribesman]

I'm saying that the deaths DID help stop the Depression be reducing the % unemployed.
But wouldn't the reduction in unemployed by death be more than counterbalanced by the maimed and insane who were unable to work but entitled and deserving of government welfare support plus of course all the widows and orphans the government gets left supporting.
So your reduce the unemployment idea of having some potential workers removed from life involves a scheme which puts more potential workers and many more women and kids on government handouts for what in efect is a minimal reduction in workforce coupled with huge government expenditure followed by outrageous government expenditure.

[tater]

WW2 put literally everyone to work.

The great Depression was deflationary, and incredibly uncertain, and have very very high unemployment (20%+).

WW2 instantly employed everyone. They were either in the military, or working in war industry. So many were employed that even women had to work.

Throwing money at the problem, and even civilian work programs didn't cut it since they simply could not hire the huge volume that WAR demanded.

So we have millions instantly employed who were not, then when the war was over, not all those millions came home. As it was, there were some problems post-war WRT jobs, but it was better than had there been an extra 400,000 looking for work. hence the deaths helped employment a little (the biggest factor was certainly all the "hiring" by the military).

[Tribesman]

WW2 put literally everyone to work.


So it was a huge government workfare scheme?
Does your countries national debt growths match these workfare schemes?

[tater]

Nah, it was just dumb luck on FDR's part that Hitler found a good petri dish to start his form of slime mold in :)

(I'm sure there are "FDR knew about PH before hand" whack-jobs here, but I'm not one of them)

[Tribesman]

Surely under your economic vision germany in the 20s and 30s with its population losses in WWI should have been immune from unemployment and economic collapse.

Unless of course your approach makes very little sense at all especially given the national cost of conflicts and the huge long running government outlays which follow its end.

[tater]

Immediately after ww1, Germany went into a period of inflation as we discussed above—partly because they had low unemployment (plenty of money to spend, part of "velocity" in mookie's terminology). The unemployment in the US helped drive deflationary pressure (little or no spending).

What are you arguing, that employment has nothing to do with inflation or deflation? That's an argument you can get into with mookie I suppose. Presumably there is a camp that maintains that inflation is entirely on the monetary supply side, vs one that uses human factors (confidence, spending etc).

I'm suggesting that the massive change in the US from 20-something % unemployment to 0% unemployment (with job growth on top of that) was a major factor in ending the US Depression. Economics, of course, is not even a science, so there are plenty of other factors to go around. But almost everyone going to work, literally overnight, was a damn good start.

[Tribesman]

What are you arguing, that employment has nothing to do with inflation or deflation?
No I am arguing that your views make little sense if any
Look again at what you wrote especially about deaths in WW2 fixing 1930s unemployment.


Though it could in a sense be said that your view is that the only way for a downward spiral to be stopped is by the government throwing huge amounts of money away and building a massive perpetual cycle of debt that can never be repaid

[tater]

Unemployment in the US was at al all time high in the 1930s.

WW2 employed virtually everyone, then upon war's end, when all those "instantly" employed soldiers returned home, the impact of their return on post-war unemployment was mitigated by the fact that fewer of these workers returned than left by several hundred thousand.

Did the "hiring" by the military help end the cycle of FDR's Depression? Without question. Did the fact that fewer returned than left have any measurable impact on post-war employment statistics? Yes, it did.

[Tribesman]

So what your current president should do to fix the mess is put almost all the population into government employment and cull a proportion of them, then later allow those not culled to work to pay a government debt that can never be repaid