A layman's question to Lix ( useless to put it to Menelaus)/
The exactly why are govts. so furiously printing money ?.
To fight off inflation ?
Doh.

I'll add more commonsense, layman viewpoint.
The general public has pretty much lost complete confidence in both the integrity of the financial system and in the ability of the govt. to manage the greed and venality of bankers and the like.
As a result currently they're not borrowing and they're not spending at the levels required to grow our economies ( inflate our economies).
That is deflationary in anybody's book.
People like Menelaus live not only in a theoretical cocoon but also in a spending one.
He talks about medical costs inflating when in fact they've always been too high for the average person, he talks about the cost of filling up his car ( in his case a top end porsche) when in fact most people are downsizing their cars, he talks about the cost of food when his wife continues to shop at Harrods food hall and most others are going to Aldi or whatever. He's out of touch with the real world.
In the real world, people are scared not of inflation but of deflation and recession or even depression. They fear losing their jobs, losing their homes. They would absolutely love to see the good old days of inflation to come back. Menelaus is right about just one thing. The only inflation is occurring at the sharp ( corrupt ) end where those who get first use of all the new money sloshing around are investing it short term in selfish, greedy stock mkt. speculation. There's no real investment happening in capital assets to generate long term sustainable growth. The world is contracting and the govts. are furiously trying to stop it from turning into a deflationary rout. IMHO only of course. But what do I know ?. I'm not moving and shaking in the ivory towers of academic finance like Menelaus.

bongo, I'd venture a guess he didn't mean anything buy it, he's just a halfwit living in blissful ignorance and hell bent on putting his massive stupidity on display on here every day. I wrote the post as simply as I could, intentionally avoiding technical jargon, but unfortunately if he is still posting sh1t like that, it clearly STILL went over his head. No surprise for me there.

As far as your comments go, I wasn't making an argument whether or not consumer price deflation is good or bad, I was simply explaining that when that post went up loudly and proudly proclaiming "What should follow is deflation", it was blatantly wrong. Steadfastly cheering it today, with the benefit of hindsight, when the actions of central bankers are there for all who care to see and price deflation is nowhere to be seen is beyond moronic.

In a money system, where unlimited money can be conjured out of thin air, deflation (money supply contraction) is a myth. As simple as it sounds however, it's pretty hard to understand when most people can't even define the terms inflation, deflation, disinflation and hyperinflation correctly.

It's also pretty hard for most people to wrap their head around this stuff when they don't really understand why central bankers are quantitative easing in the first place. It's not for price stability and it certainly is not for full employment. That's a banker and politician fabricated lie. It's to make sure the members of the money cartel have all the fiat money they need to avoid insolvency and it's for governments to continue spending money they don't have. The second reason is also done with the benefit of the bankers in mind. Put another way, without the government stepping in and borrowing and spending on behalf of consumers who can no longer afford to borrow and spend, the financial system implodes.

I have posted ad nauseum about this on here, the system needs infinite and exponential growth to pay the coupon. That's what money as debt does, that's what compounded interest does, that's how the system was designed. Most people unfortunately bought into the central banker fabricated lie that that with deflation there can be no growth. That's wrong and not supported by historical facts. We have seen tremendous growth and deflating consumer prices during the last two industrial (and technological) revolutions.

What the truth today is however, and remains largely untold, is that without cheap oil, there can be no exponential growth. It's scarcity in cheap oil, the world's alpha commodity, that's driving the "growth" bus today (or lack of it), not bankers conjuring fiat money out of thin air. It's not the constant creation and destruction of bubbles by the central banks that's proved their own undoing, it's not even governments borrowing money they can't pay back. It's something out of their control, something they can't print. It's geology, flow rates, depletion rates and EROEI. It's OIL.

The US spends two dollars for every dollar of revenue they bring in. They are currently borrowing at the rate of $1.5 trillion per year. That in itself is frightening but it doesn't even come close to telling the real story. The US has on its books $121.2 trillion (yes, that's with a T) of unfunded liabilities (social security/medicare/medicaid). Now their CBO is saying that even with a fiscal cliff deal, the best case scenario has those unfunded liabilities rising by $27.3 trillion in the next four years (supporting aging boomers can be a real b1tch). In case your calculator is not handy, that works to a liability of about $230,000 per US household to a total of $1,249,000........which will need to be borrowed or Bernanke will be forced to monetize. Their entire government funding will ultimately come only through direct monetization because the only way of managing their obscene debts is through currency debasement. In other words, they'll pay the creditors back but with dollars that are worth less or worthless. Take your choice.

Governments everywhere made promises they can't keep, and borrowed money that they can't pay back. The only way out is sentencing their currency to death. It's always happened this way, and this time will not be different.

Hyperinflation is how this ends.....just not tomorrow.

You're the chap "passing through" from the boxing forum, what part of a "knockout blow" don't you understand?



Because if you think I'm going to continue to spend hours writing 10,000 word posts to deconstruct the psychotic rants and worthless sh1t you keep putting up here, you are thicker than I thought.

Yeah, yeah, now I get what you said, a day without sunshine is like, you know, night. Brilliant.


Now on the count of three, give me another "where's the tsunami" or "dance sucker dance". Your choice. Surprise me.

I was trying to work out what you reminded me of and it suddenly struck me. You are like one of those tin foil hat wearing global warming nutters who back in the 90's told us we would all be boiling in another 50 years. Apart from waving their hands around, obfuscation and shouting a lot they struggle when you ask them to explain why the high point of global warming came in about 97. You see they had boxed themselves in with their pronouncements and they couldn't and can't explain why with continuing development in massive population countries like India, China and others the trend wasn't and isn't ever upwards to boiling point.

Same with you. I don't need to ask you to dance. All I request is that you avoid 10000 word dissertations. Not for my benefit you understand but the more concise your answers the more clearly people will be able to see through your dissembling.

Now on to the point in question:

I'll let others be the judge on just how disingenuous you are being regarding the parameters of our debate. Most will know that you are throwing this deflation thing in as a red herring.

What I am interested in is you answering my question:

To be clear and to state my consistently stated position. I see inflation. I've seen inflation since the final cut of the link to the gold standard by Nixon. I don't currently see anything like the inflation rates we have seen for long periods of that time despite all this currency debasement. Why is that?

Can you answer this question for me?

Do you ever stay on topic, or have you taken enough beating on this one so we can now move to the next one?

You can shout "hey look over there" only so many times before even those who usually give you a pass on here start to catch on.

Out of curiosity, getting caught on the Oil price lie thing, did you lie intentionally, or do you really don't know how to read a chart?

And I have news for you, impartial others have ALREADY judged, it's just that you are not paying attention.

Yes mug, a knockout blow, someone already put it far better than I ever could.



Now on the count of three........

EO
A simple question from a simple man
What would happen if govts. stopped the printing presses overnight?
Would the world collapse into a deflationary spiral or into a hyper inflationary one ?
Which alternative is most on the minds of the politicians?
Clearly it's not that black or white, but generally where is the real risk of doing nothing to the money supply ?

Well, it looks like you're going to wait for a long time then. I've trained myself when someone shouts "hey, look over there" to look everywhere BUT.

This "debate" (I'm using the word extremely loosely here) was over before it even begun, it's just that you didn't realize it until now.

Next time you want to score some points try finding something that makes sense, something that you don't have to rely twisting and turning three year old posts, something where the definition of "is" actualy is "is, and on occasion use a little more then just the broad brush lines you memorized from reading sh1t. A number to support what you are saying, or at least reading a chart correctly would also help.

If however, you still want me to use you as toilet paper, then carry on, knock yourself out.




And it's bad manners not waiting until three to start spewing "sucker" again.

I think it might be to your best interest to let this thread die at this point or you can start just shouting "where's the tsunami" again. Your choice.

That may not be the case
US to become 'world's biggest oil producer'
http://www.bbc.co.uk/news/business-20304848

Btw in today's climate of low interest rates, surely it's logical to assume that as the cost of warehousing oil has gone down, there must a shortage ( and thus a large price increase ) due to lots of oil being deliberately withheld from the mktplace ?
That probably rexplains shortish term oil price movements.
On a long term basis, as Menelaus states its the basic geological facts that will determine the ever upward price of oil.
But does any of this have any real imppact on whether we are inevitably headed towards hyperinflation being caused by this energy source actually running out and not being replaced by some new ( perhaps not even yet invented) source of renewable energy ?
Isn't the jury still out on all this ?
Once again, I emphasise these are layman questions, not even opinions in fact.

My questions still stand to be answered by any of the normal, civilised posters on here.

Stow
Do you really question the premise that long term the price of oil will continue to rise, due to basic supply/demand factors.
After all the new sources of oil, such as shale, tar sands require quite expensive extraction processes don't they ?
Short term it's all controlled by the commodity traders/speculators, but long term ?

EO
Thanks for your considered response.
I have to be honest and say that I'm not familiar with any of the dialectics of any of the famous economists, past or present.
Whilst I take your point that no politician can be trusted to act totally in the interests of the common people, I'm not so cynical that I unconditionally accept the view ( being essentially expressed on here by Menelaus) that they are totally acting in the interests of what he calls the " banking cartel".
The bankers created this mess, and the politicians are trying to clear it up. Too simplistic ?
I do believe that it was a basic error ( or moral hazard as they say ) to bail out the big players who were seriously over exposed to sub prime mortgage derivatives, but it has been done and we have to accept it. I can't say that I believe the bail out was done for dishonest reasons, as opposed to morally incorrect ones. I would love to see a few more people in jail for thie actions, and I would love to see all the ill gotten bonuses being reclaimed from the many, many unworthy recipients. But it ain't gonna happen.
I feel the mood of the world is deflalionary. I sense in the people I mix with, a resignedness that we have to pay a serious and painful price for the credit binge that took place.
Already most people I know feel a hell of a lot less financially comfortable now than they have ever before felt, and are cutting back on a lot of needless personal expenditure. We all bought too many goods and products we neither needed nor particularly wanted, apart from keeping up with the Jones'.
So in my rather simplistic, non technical analysis,I don't see all this leading to a hyper inflation scenario, but rather the opposite.
And you know what, it's the actions of the normal people in all this that will ultimately decide what happens. Not what the economists or the politicains say or do.
I expect countries like China and India and Brazil to come out of all this stronger and more powerful. The hegemony of the USA is certainly going to be destroyed both morally and financially.

Fine As

You could be right. Leaving aside the motives of the big players which we cannot say for sure and which to some extent are an irrelevance I agree and disagree with elements of your above post.

I agree that the mood of the world is deflationary as it should be in a depressionary environment but then you have to throw into that mix the actions of the central banks and politicians which is inflationary through quantitative easing. I agree that there are a lot of people cutting back to make ends meet either voluntarily or by necessity. I don't agree that this constitutes deflation. What I think it may be is essentially a personal version of what happened in the 70's which would be personal stagflation. By that I mean that peoples discretionary spending may be stagnating into a mildy to moderately inflationary environment whose compound effects after nearly 5 years is beginning to mount. This is an unusual phenomena to us because we are used to constant standard of living increases but as you say with issues around oil extraction we may have to get used to this unless there is another energy revolution.

Wow, what do you know, a private discussion on a public forum. Impressive how you keep raising delusion to a whole new level.

Or, is it because you are afraid I'm about rip apart that abortion in a wedding dress you put up?

First, let me start with paying you a compliment. You write well. You have an interesting and catchy turn of phrase. But that's precisely what makes the rubbish you put up on here dangerous. The uninitiated may come to the conclusion that someone that can expresses themselves so eloquently, with such poetic prose and colorful syntax must know what they are doing about. They couldn't be more wrong.

First a few general comments about you, all key for readers to understand who you really are, and starting with the most important.

You suffer from chronic psychosis. You have serious psychological issues. I'm not saying that to be hurtful, and I'm not making that stuff up.  I have experience in this area, and your psychological profile was very easy to create with your personality openly pasted, in your own words, all over these forums. Thousands of posts to choose from.  All the "dance sucker dance", "I will destroy you", "I will slay you" and "I wish you dead" comments don't fall out of the sky, they are the product of a very disturbed mind. Bringing into the forum alter egos (a charade that you continue to this very day) and mentioning a handicapped wife (with several other ailments) who doesn't exist only help cement my conclusions.  But there's more. While I've consistently wiped my a$$ with you at every turn on here, you still continue to stick your intellectual two inch p3ck3r into the same meat grinder expecting a different result. That is profoundly insane. Putting up thousands of posts on here while continuing to claim that you are passing through, with the overwhelming majority having me as the subject matter displays a  decidedly abnormal and unhealthy (for you) level of obsession. Perhaps more important to the forum, however, is that as desperately as you have been trying to hide it, your knowledge of finance and economics and of the true meaning of current economic events is skin deep.

Your posts only intend to deceive. All the way from having a conversation with yourself by posting under different forum names, to constant attempts at feigning knowledge, to blatantly repeating lie after lie in your posts, as if by repeating them it will make them true. You posted more lies on here than I care to remember. I called you on it. You changed the subject. A case in point is on this very same thread I'm posting on now. You repeated the "the price of oil is lower now" lie again and again and again, trying to deceive those who readers were willing to listen without checking. I called you on it. You changed the subject.

Your posts are totally devoid of numbers. Totally devoid of mathematical analysis. Now that would be fine this what the "Young Poets & Novelists" forum. It isn't however, it's a financials forum. So although you are quite adept at posting broad brush, 30,000 foot level, touchie feelie kind of stuff you picked up by reading various magazines, this isn't the poetry of Byron we are discussing, it's economics. Economics and finance where the irrefutable power of mathematical analysis is king. Without math you can't understand economics, when in reality economics is a branch of mathematics. You can't understand complex theoretical models, you can't understand basic economic indicators, you can't do simple valuations and risk assessment that are key to investing. Do you know what the biggest enemy of "all fluff and no substance" is? Numbers.

But enough of that, this after all is not the psychology forum, it's the financials forum. Let me deal with the latest turd you dropped on the forum. Because although you poured an entire bottle of perfume on it, it's still a turd. The underlying stench in undeniable.

First off, you sound completely confused. Overwhelmed by the complexity of events that are neither contradictory nor in need of consensus. They are in need of a genuine understanding of what's really taking place and what it all means. Something which you totally lack unless someone else writes an article that you can read and memorize first. Your post first takes us on a ride in obfuscation, hedging, ambiguity, confusion, providing more questions than answers and culminating with the usual motherhood statement "I live in hope and prepare for the worse". Yes, I like apple pie too.

You admit you have no idea what's going on, what's even worse, you haven't the faintest what's coming next or when. So you say you're hedged. Nice safe cover your a$$ statement. But when I asked you to explain how precisely you are hedged, all I heard were crickets chirping. Everyone knows the buzz words, they've gone main stream now, but very few understand the real substance. And that's your undoing.

You try very hard to impress. Seriously, I mean how many people are familiar with Hegelian dialectic. I'm surprised you didn't mention Plato in your post, that would have totally convinced the readers that you are an intellectual. But once you peel back the veneer of pseudo intellectualism all you have left is an empty shell. Thomas Sargent didn't use Hegelian dialectic in his cause and effect in the macroeconomy thesis, he used mathematical models. Thomas Schelling didn't use Hegelian dialectic in his brilliant work on game theory, he used the irrefutable power of numbers. Even Gary Becker, whose work revolves around behavioral economics, didn't use Hegelian dialectic in his non-market behavior papers, he used the undeniable logic of mathematics. So instead of wasting your time trying to impress, you'd be far better served to acquaint yourself with basic math, this way what's unfolding now, a system collapsing under it's own weight, wouldn't be as confusing to you.

Let me leave you with something, and I'm not not going to disguise what I'm saying behind double talk and the nonsense you post when you're caught offside. Like "I said deflation SHOULD follow, not necessarily that it WOULD follow", very reminiscent of the famous Bill Clinton line "it depends what the meaning of "is" is".  I'm will say this with conviction because it's based of in-depth knowledge, facts and numbers, not the motherhood fluff that you hide behind.

Since the US unilaterally abrogated the gold convertibility agreement in 1971, there has been a banking crisis (and I know this number will stun you) in 120 nations around the planet, including here in the UK. Mostly same story as always, too much leverage, too much high risk, too many bad loans until one day it all blows apart. Bank balance sheets imploding destroying money and credit with it. In other words, a contraction in the supply or deflation. YET, DESPITE ALL THESE INCIDENTS THERE HASN'T BEEN A SINGLE CASE OF RECORDED DEFLATION, OR A DEFLATIONARY COLLAPSE IN ANY OF THESE ECONOMIES. In fact, quite the contrary, in most cases these incidents were followed with raging inflation and in some incidents even hyperinflation which killed the currency out of existence. Why the feck do you think that is halfwit?

So while you are sitting there confused, overwhelmed with the complexity of economics and finance, and spewing bullsh1t like "deflation should come next", others know EXACTLY how this will play out because THIS TIME IS NO DIFFERENT.

In the real business world, I've taken to school men that were intellectual giants compared to you, with a real understanding of economics not the anecdotal sh1t you keep regurgitating on here, and with the strength of character to send chills down your spine with one piercing look………not an ignorant sick POS like you hiding behind a keyboard. You may slay MYTHICAL dragons in your fantasies, but I skewer REAL stupidity whenever I see it.

I wonder why then that Menelas sounds more like the complete psycho on here and not EO.
I think the very last para in Menelaus' last post might just sum up the Walter Mitty aspect of his character.
EO at the very least qualifies everything he says with the normal humility of man, by admitting that he doesn't really know all the answers. He merely knows what he doesn't know and freely admits it.
On the other hand, Menelaus seems to be the first economist ever in history to be claiming that he has developed an economic theory based entirely on irrefutable mathematics. A theory that can seemingly with absolute certainty forecast future events . And it's so secret that apparently nobody in the world's academic or socio/political research insitutions has picked up up on this extremely amazing theory and has thrust it into the forefront of the world's mind. No poiticians or party of politicians are piggybacking on it to establish never ending power at the ballot boxes.
How all very credible is that ?.

Hell I'm not even saying that Menelaus is wrong in what he is forecasting ( and neither in fact is EO saying that).
I am merely exercising my perfect right not to agree with his points of view unreservedly.
I don't have to justify that in any manner at all, as I am not asking any others to join me in this position.
Menelaus finds that unbearable for some reason .
He takes it as a personal insult to his towering intellect, and in fact it isn't that at all.
It simply just one person who, for good or bad, has decided that he has not stumbled fortuitously upon the font of all economic wisdom ( that is Menelaus) and has decided to cover his bets by following ( in part at least) contrary advice he is getting from a few other, well wqualified, well credentialled sources ( and no I don't have to name them either on what is after all a gambling website).

He doesn't seem a well man. Stress can unhinge even the most grounded of individuals.