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Genesis Posts: 71412 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1078-S....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 13:22:35
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Csgreen Posts: 201 Incept: 2008-02-25 
TX
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more evidence of coming hyperinflation.
2009-06-01 14:04:29
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Genesis Posts: 71412 Incept: 2007-06-26
KD^2
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No its not. Evidence or retraction; this isn't Yahoo. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 14:06:12
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Xqqme Posts: 76 Incept: 2009-01-09
Ohio
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http://blogs.wsj.com/economics/2009/06/0.... June 1, 2009, 5:00 AM ET IMF Bonds Are Coming Soon, but You Won’t Be Able to Buy Any By Bob Davis The International Monetary Fund is putting final touches on its plans to issue its first bonds. Russia has already said it would buy $10 billion of the bonds, which would be priced in the IMF’s quasi-currency, “special drawing rights.” SDRs are a basket of currencies consisting of the euro, yen, pound sterling and U.S. dollar. As of Friday, 1 SDR equals $1.55. China, Brazil and India also have said they are interested in buying IMF bonds, with China likely to purchase more than $20 billion of instrument. The IMF wants to issue bonds as a way to build up its lending war chest as the global economic nosedive continues. But don’t start lining up at the IMF to buy some yourselves. Only the IMF’s 185 member nations and some central banks will be eligible to purchase them and trade them — among themselves. Some at the World Bank worry that the IMF bonds might push up borrowing rates somewhat for the Bank, though IMF officials doubt the IMF bond issuance will be large enough to affect World Bank borrowing costs much And don’t expect to see a physical bond certificate or coupons. The IMF isn’t designing a paper bond with some fancy lettering or a picture of, say, the IMF headquarters or John Maynard Keynes. All the transactions will be handled electronically. ('Basket of currencies'. You knew that was coming.)
2009-06-01 14:06:38
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Koaj Posts: 951 Incept: 2009-02-03 
NJ Online
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awesome i cant wait for jimmy carter part deux...
2009-06-01 14:09:29
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Csgreen Posts: 201 Incept: 2008-02-25
TX
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It was a joke.....the hyperinflasionists are starting to bother me as much as the pumpers.
2009-06-01 14:15:14
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Schwantz Posts: 5077 Incept: 2007-11-12
Monkey Do
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Quote:As of Friday, 1 SDR equals $1.55. Anyone know any way to track this? ---------- Dives sum, si non reddo eis quibus debeo Smash the Keynesian idiocracy!
2009-06-01 14:17:19
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Jhonab Posts: 215 Incept: 2009-03-24
Denmark Online
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MRM - Monthly Resetting Mortgage - is about to become the foundation of funding for the US. In March China bought 30bn T's - half was 30Y, half was very short maturities - message to Ben: we'll support you (=we will support the dollar denominated T's and GSE bonds we already hold) BUT we don't trust you and your QE. Gonna be very interesting to see upcoming bond auctions - june 4th is the big day for ten year notes and 30 year bonds. Last modified:
2009-06-01 14:26:15 by jhonab
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Braindamage Posts: 76 Incept: 2008-11-08
ft bragg, nc
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There are a few things which support the inflation argument, but they go beyond the classical economic model of inflation. 1) Demand destruction during recessions negatively affects producer's marginal production. This causes prices to go up. 2) The destruction of the dollar drives up the prices of commodities and producer inputs. 3) The erosion of purchasing power won't come from higher prices at first, it'll come from higher equity requirements and shorter (more realistic) amortizations. How do you account for inflation during the 70s and the Weimar Republic. Both of those periods were horrible economically.
2009-06-01 14:20:24
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Xqqme Posts: 76 Incept: 2009-01-09
Ohio
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The Chinese students can do math and they're laughing at Geithner Chinese students laugh at Geithner's assurances (about Dollar) Reuters ^ | Glenn Somerville BEIJING -- U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency. A major goal of Geithner's maiden visit to China as Treasury chief is to allay concerns that Washington's bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds. China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China's total U.S. dollar-denominated investments could be twice as high. "Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s. His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home. The Beijing-based Global Times greeted Geithner by publishing a survey of Chinese economists who called big holdings of U.S. debt "risky."
2009-06-01 14:22:38
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Genesis Posts: 71412 Incept: 2007-06-26
KD^2
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Weimar had debt denominated in a foreign currency. So did we effectively in the 70s - remember that Nixon closed the Gold Window. That sort of dislocation along with wage and price controls caused a horrifyingly bad "reset event" just as did Weimar finding that it could not service its external-denominated debt. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 14:24:23
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Throxxofvron Posts: 2672 Incept: 2009-02-17
The Land of Bilk & Money
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Ack! Braindamage: read over the old Tickers as the answers to the questions of differences between Weimar & USA situations are clarified in them... Cannot have hyperinflation without wage inflation; -this is likely going to be a continuing ugly mix of high fuel and necessity prices coupled with falling wages. Asset de-leveraging continues. Ben's printing cannot offset the dollar destruction that is occurring due to debt; see this thread for Monetary Data which clearly shows this destruction at work and the dollar velocity dropping well below 1x : http://www.tickerforum.org/cgi-ticker/ak.... ---------- DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
2009-06-01 14:30:38
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Bozonian Posts: 14033 Incept: 2007-09-01
PFT - Pure F'n Tin
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I'm pretty sure most of you will agree we've several time when the bond market almost got away from Bernanke but by brute force, he "wrassled it down" by outbidding the market. When are these sticksaves going to end? Even though he has no theoretical limit on how much he can spend, there are practical limits. What are those? ---------- I'm so depressed about outsourcing I called the suicide hotline and got a call center in Pakistan. They got all excited and asked me if I could drive a truck. Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice. Last modified:
2009-06-01 14:32:55 by bozonian
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Genesis Posts: 71412 Incept: 2007-06-26
KD^2
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Boz, each such "sticksave" ends up with him owning more and more of the float of that issue, and thus the challenges get more violent as liquidity disappearsa. He is literally playing with a grenade that has a loose pin. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 14:32:39
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Asimov Posts: 26688 Incept: 2007-08-26
east tennessee Online
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Boz: My guess would be TARP + what banks can borrow from the lending facilities.
---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-06-01 14:32:53
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Bozonian Posts: 14033 Incept: 2007-09-01
PFT - Pure F'n Tin
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Why would TARP be a limiting factor. If the money is REALLY needed, Congress will roll over again just like it did the last time. I'm not being recalcitrant on purpose, I just want to make sure I don't jump into a bear trap when it looks like the bond market is fighting back.
---------- I'm so depressed about outsourcing I called the suicide hotline and got a call center in Pakistan. They got all excited and asked me if I could drive a truck. Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice.
2009-06-01 14:34:24
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Asimov Posts: 26688 Incept: 2007-08-26
east tennessee Online
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Boz: Like I said + the lending facilities -- which are pretty much unlimited, particularly on an overnight basis. Even if congress does roll over, it's not going to make a bit of difference. The BEST it can do is slow down the T collapse, more likely it will ACCELERATE it. Bond holders aren't stupid, they are scared of T's becuase of the risk. More spending == more risk. That's a feedback loop that none of us want to see... but may see anyway. ---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-06-01 14:38:13
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Braindamage Posts: 76 Incept: 2008-11-08
ft bragg, nc
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I understand the differences between Weimar, 70s, and now, and the concept of money/credit destruction. But what about the other factors? Isn't it possible that QE may be doing enough damage to the dollar to artificially inflate input costs, hence inflation? What about the scaling down of economies of scale which increase the cost of production?
2009-06-01 14:49:19
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Genesis Posts: 71412 Incept: 2007-06-26
KD^2
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For inflation to result in the classical wage-price spiral you have to be able to couple it back to wages. If you can't it just destroys demand instead and impoverishes huge parts of the population. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 14:51:12
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Otiswild Posts: 1341 Incept: 2009-03-09
Teegeeack
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I love how the headline changed from "Chinese students laugh at Geithner's assurances (about Dollar)" to "Geithner tells China its dollar assets are safe"... http://www.reuters.com/article/companyNe.... ---------- It appears that the yard wolves has grown up. Are we finally finished with the colds dead winters?
2009-06-01 14:53:44
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Braindamage Posts: 76 Incept: 2008-11-08
ft bragg, nc
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Right, Gen, and that's what I fear. As youve explained, I dont see how this could go on at the expense of the bond market, which would burn down the whole damn house. It may very well happen, though.
2009-06-01 14:56:36
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Myself I'm in the depressionary deflation followed by massive inflation camp. All the borrowing and future printing tells me inflation is inevitable. Thanks for the QE guys. But with real time incomes falling I see nothing but deflation for the next 18 to 24 months. You guys can call me crazy if you want. But thats the way I see it.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-06-01 15:08:29
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Jhonab Posts: 215 Incept: 2009-03-24
Denmark Online
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Gen - I agree with you there can be no hyperinflation without rising prices offsetting rising wages. Globalization means that this mechanism is off - that is to say: higher oil and fuel prices cannot be transmitted into higher wages. Higher prices on US imports will simply mean a decline in demand. So this is the trap: inflation in SOME essential prices will occur - energy in particular - but this will only lead to lower living standards in the net energy importing countries. I think that QE - apart from being the only possible solution from the oligarch point of view, government, FED, Wall Street - is a way to lower the living standards of the US citizens (and the British, the Europeans) without any politician having to actually say: on my watch, we had to accept lower living standards. Rather they can say: this is all due to international economics, currency crosses etc., we did our best, but sorry guys, you just have to work harder. Hyperinflation without wages rising as a consequence of higher prices - never. But inflation leading to an overall decline in living standards and a particular hard hit to the unemployed and the poor - yes. By leaving the **** to FED (and the Treasury), politicians in general can deny any guilt in this mess. That is what it is all about. Last modified:
2009-06-01 15:22:00 by jhonab
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Ssg263 Posts: 100 Incept: 2009-01-07
NY
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The question is begged- will Obama mandate wage increases if speculators eventually use all this bailout money to take oil to $175 and above?
2009-06-01 15:22:08
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Genesis Posts: 71412 Incept: 2007-06-26
KD^2
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I love the circular reasoning. First, develop an outcome, then figure out how you can get there through the most tortured means possible. I'm done with that part of the debate - we've had it a dozen times here, and I find it TIRING, especially for those who won't bother to use SEARCH and read the DOZENS of previous threads on this. Those who exhibit laziness in this sort of manner will get exactly ONE post in any ticker thread where they show it. Those who are guilty need to do some work and editing before their timer (or my patience) expires. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-06-01 15:24:01
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