Inflation/Deflation

Don’t get too worked up over interest on the national debt or what will happen when interest rates rise because, by then, we’ll likely be talking about ways to cool down the economy. [Why?] Because interest rates on US government debt are really a function of economic growth. If the economy is weak the Fed will pin short rates to stimulate the economy and if rates rise it’s going to be a function of better days ahead. Words: 525

Busy? No problem. Don't bother taking the time to surf the internet in search of videos on the dire state of the U.S. economy. This post contains descriptions and links to 57 of the best.

We believe that we are in the “competitive devaluation” stage presently [see graph below] as country after country is printing money in order to lower rates and doing whatever possible to devalue their currency - to have the fastest currency in the...race to the bottom - in order to export their goods and services. [The next stage will be protectionism and tariffs. This article gives an update on the race to debase.]

[We read over and over again that] because of the massive amounts of money the Feds are injecting into the USA economy through quantitative easing, inflation is going to spike any day now, and the dollar is going to crash and, with that, gold will go to the moon - but it is not happening. It must be frustrating for gold investors. It is likely also puzzling to them. In this article I will try to explain why the U.S. dollar is not likely to crash anytime soon, and hopes of a gold spike in dollar-denominated terms are just that, hopes. Words: 730

Anybody who thinks the U.S. is in a so-called recovery isn’t listening to economist John Williams. He expects a negative reaction to the U.S. dollar in the next 3 or 4 months leading up to the mid-May deadline for Congress to get the budget and debt ceiling under control. If they do not get their financial house in order by then he believes "it will be the end of the road....as they are not going to have another opportunity".

Higher interest rates [are eventually coming and]... will substantially increase the annual interest costs, the deficit, and the required borrowing/printing. More deficits, more borrowing, more printing, and higher interest rates will cause a larger deficit and more borrowing and the cycle will repeat. [You have a choice as to what you do to protect your current and future standard of living and this article sts it all out.] Words: 595

The current move up over the past 4 years is being driven by the Fed's loose monetary policies (just as other global markets have been driven by their Central Banks). Most bulls believe the loose polices will stimulate enough consumer demand to lead to a significant U.S. economic recovery. We, however, continue to believe the debt - laden consumer, along with the still other unresolved debt burdens, will be a major drag on the U.S. economy, (we are convinced that the market will turn down and make a triple top at levels below the peaks made in 2000 and 2007 while we resume the secular bear market that started in 2000) and that will have negative affects on the global economy.

We know that state-run central banks ALWAYS try to inflate their way out of debt [because, quite] simply, it's the easiest way to make debt go away....Ben Bernanke and Tim Geithner might call their inflationary measures by a different name - like quantitative easing - but the effect is the same [and,] make no mistake [about it,] these policies will destroy lives [on one hand, and make those in the know a small fortune on the other. This article explains the options].

Whenever the BLS posts their monthly CPI there's always the same response from critics that the index is flawed. That's fine. I think a healthy dose of skepticism regarding government data is perfectly good. So let's take a look at some independent gauges to see where prices are.

A look at the trend in prices of the Big Mac clearly shows that investors are being penalized with higher inflation, lower income from bonds and certificates of deposit and being led to believe that the economy is growing better than it really is. [Let me explain.] Words: 1012; Charts: 2