deflation; where did the money go?



spend it.

Give me a single example in history where running the printing press wildly did not create inflation. There is a delay of a few months of course, this money will start to circulate at some point. But true that if I'm leveraging in the financial sector and need to cover a margin call after a catastroph I'll have to liquidate assets and convert into dollars if my debt was in USD, i.e. USD will climb temporarelly.
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Irrelevant, there is no one but Zimbabwe doing that currently.

It isnt the result of 'running the printing press wildly'

That isnt the reason for the current rise.
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On Sat, 06 Dec 2008 04:34:21 -0800, jean-francois wrote:

The problem is that you and a lot of other people have been brainwashed into thinking that inflation is evil. It is probably essential at this point.
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Oh, if I have tons of debts it's a good thing. If I'm a debitor it's a catastroph. The problem is that people have been brainwashed into thinking that deflation is evil. A deflation of 1 or 2% per year is not evil at all; it does not prevent people from spending on what they really need, the period 1870-1890 wasn't that bad in general since the purchasing power largelly raised in the USA. Salaries drop by about 1% per year and prices nearly by 3% but the US GDP did not drop.
Now regarding the present situation I admit that if the government does not print money there will be more than a 1 or 2% annual deflation. But anyway whatever the government does with the money supply it will not cure the problem.
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On Sun, 07 Dec 2008 02:14:33 -0800, jean-francois wrote:

You seem to not be aware of what those words mean.

It is.

Deflation creates a system in which the rich can remain totally idle and not invest in anything at all and remain rich. That is stagnation.

Rubbish. It matters what is done with the money.
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No, it will be a long, long time and maybe never, because those wheel-barrows available at Toys-R-Us are simply too small and it's much more practical to add more zeroes with a card.
But so long as those magic charms continue to be printed on the great American Dollar, there will always be enough Ivy Leaguers to act with statesmanship and protect the interests of America. Once some religious nut gets those pagan tokens removed, there will be no guarantee the Roman circus will take over before the great American Capitalist System has evolved to the stage when the inevitable Communist Paradise can be perfected, within limits, etc.

=============================================> > > Supposedly, we are now descending experiencing deflation,.

- Hide quoted text -

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Yes and no. What follows deflationary busts are periods of slow but steady growth and slow inflation. People generally eschew debt and save for what they want, having been burned in the bust.
The return to the sort of period we had in the bubble won't happen for a couple of generations. So shopping yes, spree, probably not.
FoFP
--
The three schools of thought on the credit bubble:
1) Monetarist : You can borrow your way out of debt.
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I could ignore the mention of zillions by Rich D., Esq., but your use of the words 'a couple of generations' which works out to be near the 23rd Century was quite hard to swallow.
My old crystal ball tells me that when a bushman becomes king of the hill, an anti-bush pied piper will come all the way from an anti-bush tribe in Sweden to advise him how to print notes on toilet paper. Sometime in the third year of his reign, Dow 32000 and gold $4000 will be reached. Sad to say, the king becomes lame and rolls down the hill at the end of the next year like a duck egg.

e
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By a "generation" I mean 30 years - the age difference between generations.
Search posts on uk.finance by "fofp" and "credit bubble" and you'll probably find a reasonable explanation for why I think the credit cycles repeat through the grandchildren. There will have been more than a few of them between 2000 and now.
Cheers
FoFP
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M Holmes wrote:

Does it take approximately 30 years to forget tough lessons learned ?
Han de Bruijn
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Nothing like it. My father left school and started working during the great depression and didnt have any problem with using credit when that was appropriate.
And the effects of the great depression where more severe for his country than were seen in the US.
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Nope. It takes sixty or more. Long story short, people get to "credit revulsion" in the debt-deflation and swear off debt for life. They raise their kds to do tye same. For the next set of kids though, they'll start borrowing just for mortgages or whatever. Later for them, or for their kids, the last bust will just be ancient history. They'll start taking debt for more things. Then eventually there'll be one particular asset which they think always rises in price, and we're off to the races again.
I have an article written for One magazine on this very subject. It's too long for the paper edition, so it may go on the website:
http://www.iamone.co.uk/
FoFP
--
The three schools of thought on the credit bubble:
1) Monetarist : You can borrow your way out of debt.
  Click to see the full signature.
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That doesnt happen that much. If it did, we wouldnt have seen the risk of credit cards in the 50s, much less than 60 years after the great depression.

That doesnt happen either.

Thats only been true last century. In the century before 1929, there was a MUCH higher number of busts, what they mostly called panics in those days.

It actually happened a lot quicker than you claim.

Plenty thought that about real estate much sooner than 60 years after the great depression.

The author(s) cant explain those basics above.

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Well, OK, there are always rich folks and even in the most extreme bubbles, not all of the population takes part. In the 50's were credit cards normal for the masses?

Panic of 1837, Panic of 1873 were both significant bubbles. Which others were you thinking of that were more or less national?

I'm listening. What other nationalk bubbles have we seen between the end of the 1929 bust and when this one got going in the early 1980's? I can think of quite a few in other countries, but the UK or US?

The asset is chosen before the bubble gets started, largely because it is seen during the inflation as being able to protect wealth from inflation.
The bubble though gets speculative during disinflation.
FoFP
--
The three schools of thought on the credit bubble: 1) Monetarist : You
can borrow your way out of debt. 2) Keynesian : The government can
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Yep. In spades in the 60s.

You said busts, not bubbles. http://en.wikipedia.org/wiki/List_of_recessions#Recessions_and_other_Economic_Crises

You said busts, not bubbles. http://en.wikipedia.org/wiki/List_of_recessions#Recessions_and_other_Economic_Crises

Thats not what most bubbles are about.

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wrote

You're quite a bit out for the UK. Barclaycard only launched 1966
http://news.bbc.co.uk/1/hi/business/5109662.stm
Numbers and more importantly perhaps usage took a long time to build up.
I can't really find figures going back that far, but look at Graph 11 on here, showing growth in credit card debt since 1994 only.
http://www.creditaction.org.uk/assets/PDF/whitepapers/squeezed-out.pdf
Neb
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That soggy little island is completely irrelevant.

Still nothing even remotely like his 60 years since the great depression.

Still nothing even remotely like his 60 years since the great depression.

Still nothing even remotely like his claim about behaviour taking 60 years since the great depression.
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Not to this newsgroup its not.
--
Mark Roberts

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wrote

You are posting in a UK group.

I wasn't referring to his 60 years - I was referring to your erroneous information about credit cards in the 50's.
snip>>>>>>>>>>>>>>>>>>>>>>>> >

So when was your depression then?
I show you a huge rise in credit card dept in the 90's and you are saying that isn't 60 years after the great depresssion?
Neb
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I am actually posting in a sci. group and someone included a crosspost to a uk group.

It isnt erroneous, its fact. And that fact blows a damned great hole in his claim about 60 years.
And credit card werent the only source of credit in that soggy little island in the 50s anyway.

Plenty of what he claimed didnt happen till after 60 years from the great depression has in fact happened well before that, even in that soggy little island.

Nope, I am saying that there was a hell of a lot of the use of credit long before the 90s even in that soggy little island of yours.
So his silly claims about 60 years have blown up in his face and covered him with black stuff, very comprehensively indeed.
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