Dude, Wall Street just dropped another 700 points

Ask the guy how deflation is possible if these fuckers are injecting $700 billion of fiat money into the shit! I just do not get it!

Now, on a serious note. I hope nothing happens to Sarah Silverman. She's the only one I worry about-

 

Why is deflation bad?

 

Because $700 billion isn't nearly enough money to save things, even temporarily.

 

Because it sends the markets into a freefall.

 

I just got done reading about deflation spirals and such. SHould look it up before I ask.

I was thinking it was a lowering of prices.

 

nothing wrong with living off of cheeseburgers

 

he doesnt have a search on his blog.. there are several links in this blurb from september 5th.hes held to his claim since and since he has been dead on this far i see no reason to doubt him.

Deflation Sets In

Many are in denial still, but deflation is right here right now. The case was made in The Future Is Frugality. Here are the key bullet points:

Deflation is Not Coming, Deflation is Here.

• Credit is contracting by any reasonable measure. It would be contracting at a stunning rate if marked to market. And from a practical standpoint marked to market is how it must be considered, even if there is no direct measure (which I might add is on purpose). Instead it is still hidden in marked to fantasy level 3 assets and in SIVs and other off balance sheet vehicles. See Not Practical To Tell The Truth for this line of reasoning. M3 is simply not a reasonable measure of credit, nor is MZM. Inquiring minds will want read Bank Credit Is Contracting for more details.
• Trillions of dollars of housing wealth has been wiped out, yet laughably some still talk of hyperinflation. There has never been a hyperinflation in history where land prices have fallen like they are now. In fact, there has never been hyperinflation where land prices have declined at all, barring some obscure war zone perhaps.
• Bank writeoffs have hit $500 billion and $2 Trillion is coming. "Yes, That's $2 Trillion of Debt-Related Losses", says Nouriel Roubini.

The only question now is how long deflation lasts, not whether it gets here. For more on deflation, please see Deflation In A Fiat Regime?

Deflation Models

I had several models for how deflation might play out. Here they are.

1. Everything but treasuries sink
2. Everything but treasuries and gold sink
3. Gold sells off initially then rallies with treasuries

Yes, this treasury bull is extremely long in the tooth. And yes there will be a time to short treasuries. But there has not been a bull market in history, in anything, that ended with that asset class being nearly universally despised.

And make no mistake about it, treasuries are despised. Foreign central banks do not count because they are not buying treasuries to make a profit, and they are relatively unconcerned about losses.

All things considered there is genuine pent up demand for treasuries right here in the US should foreign buying subside. The reason is simple. It is far better to make 3% in treasuries than to lose 30% in equities, commodities, or corporate bonds.

Potential For Deflationary Crash

At this juncture the markets are definitely in a potential deflationary crash mode. And as stated above, I believe the Fed is essentially powerless to do anything about it. The Fed cannot possibly bail out every bank, brokerage, airline, and automotive company that is in dire straits. They cannot force sovereign wealth funds to do so either.

There is little doubt the Fed will try all sorts of schemes, but all those who were 100% sure Bernanke could do something better be asking what if he doesn't? Those who thought gold, silver, or energy was a one way bet better be asking the exact same thing.

In the meantime, the much despised treasury bull is alive and doing fine.

 

I love watching this shit..

It droped so fast the last hour it was crazy.. lol

Why do we need to work 50 hours a week for 50 years to buy a home?

Because of this bullshit game that is falling apart right now.

Let the casino burn..

 

I thought you were only 31!

 

hahahaha.. ok.

 

we are on the brink of the end of our times. i think things are really going to go into the shitter. everyone is paniced and fearful. that is what they want. keep us afraid and meek.

 

end of times

nah, beginning of times is a better sound bite

 

Oh yeah this is the beginning of great stuff, we are just watching a bunch of corrupt garbage die..

 

If you find a good one let me know, brother stalk.

LoOL

 

My family came from Stalinist Russia and potato famine Ireland

I think its kind of funny that some slightly hard times come to America, and its the "end times"

 

Yep.

 

Well whatever happens happens. If people are ready they are, if not then they are not. Prep for what you think you need to prep for or dont.

 

Oh, it’s end of times alright :toetap05:

This year my christmas bonus will be cut by 10%


Hotwater

 

I think for some being raised a cushy life style it would be. I mean take a kid raised by a family with a $100K a year income and then all at once the parents have to work at a fast food joint. To that kid the world did end.

I am lucky enough that my father came from a poor family. He made god money when I was growing up but he always pounded into our minds that times can change at the drop of a hat. Hell his father used to walk 5 miles to town everyday just to see if he had work. Dirt poor Dakota man but they always lived by the thought of "there is enough for one more" (meaning if a person needed a roof or food) No idea how they made it all work but the did.

I wish I was half the man my grandfather was.

 

You seem pretty tough to me, who knows how you could transform if truly hard times hit

My grandpa actually said he enjoyed the depression, even though his family was hit very hard.

He did odd jobs here and there and him and his friends would piece together one working car from all of the abandoned ones, pool money for gas and drive around.

He said it created a lot of community spirit

my dad did make decent money, but I have always had the feeling that things could change at the drop of a hat too, and no matter how much money I have made since I have been on my own, I still live pretty simply