Jubilee Prosperity

Thus our most important message is that if we somehow became confused by monopoly media mesmerism that more inflation or even hyperinflation may paper our way out of this financial mess, please be advised that was yesterday’s song and dance.

Repaying debts by inflating the currency only raises the cost of living beyond what people can afford. It brings US closer to a mythical Mayan Nostradamus Armagedden of 2012, which does not even make credible movies. The last century is littered with compelling false prognostications from the Millerites to budget surpluses.

Beware widely held misconceptions. They may be lethal. Inflation is not in front of US, but behind US.

We had an 86% devaluation of the dollar relative to gold from 2001 to March of 2008.

Hell did not freeze over and the world did not end. Instead, despiute a few exceptions to prove the rule, many people still did not learn the lesson of producing and saving to invest for a better day.

The shibboleth is Big Brother will just continue to borrow, spend and tax as usual, while Helicopter Ben Bernanke will just continue to print more dollars backed by more Treasury Debts. More, more, more.

Less, less, less. The reality is the broad M-3 money supply slowed down since 2008 before the market crash. Creative debt and economic destruction and defaults happened much faster than the Fed and Treasury could paper the game over with funny money.

http://www.shadowstats.com/alternate_data

Who wants to borrow when the real cost of borrowing is greater than real returns on the latest manipulated bubble?

A -13% contracting GDP makes zero nominal rate costs a very real and implosive deflationary +13%. Furthermore, Treasury Note and Bond rates rise to reflect the risk of default, as the USA is on defacto credit watch by surplus nations.

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This entry was posted on Sunday, December 20th, 2009 at 11:27 am and is filed under Market Psychology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.