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Two Letters Re: Are Simultaneous Inflation and Deflation Possible?
Jim,
We are clearly experiencing deflation, as bad debt and derivatives unwind.
At the same time there appears to be massive inflation by the Fed, or else where
did the three Trillion for Iraq come from?
The only "X factor" now is the money multiplier. Reserve requirements are
now [effectively] zero. A
good video (Flash required). But now eliminate the reserve component, [and
its] Zimbabwe dollars ahoy.
Here is some scary
stuff, directly
from the Fed.
And here is an
explanation similar to what I had wanted to write about the "Its the Economy
Stupid" with Clinton and Greenspan - David in Israel
Dear Jim:
Your piece "Are Simultaneous Inflation and Deflation Possible?" was a great
posting on the economic/financial storm brewing. As the "perfect storm" is
just getting rolling, this is a good time for those who have not read much Austrian
economics to get an understanding of what is likely to hit and why. I feel sorry
for folks who have not been given the opportunity to get up to speed on Austrian
economics - they are flying blind into the storm (and will get hurt, badly).
1. Robert
Ringer has a simplified and easy to read introduction as to what money really
is and how
it got so corrupted - a great place to start,
2. A super one page distillation
of the current problems.
3. After being a paid subscriber to to Gary
North for many years, reading him is mandatory, in my opinion. He was very
wrong on Y2K, but since then has called the top of the stock market mania (to
the
month!), begged subscribers to buy gold at $300, and gave years of advance
warning of
the housing bubble.
Get
a fee subscription his Reality Check newsletter. I hope that will convince
you to sign on for the full web site subscription. OBTW, I have no $ interest
here - just a paid subscriber with a meager hope that if a critical mass of
folks
get exposed to more moral and economic sense it
might
help to turn this country around after the crash.
Gary North is a long term bull on gold and also wise enough
to look at contrary information. For example, "Helicopter Ben" Bernanke
has actually kept a lid on M1 monetary inflation, (even as he lowers interest
rates). So
just possibly,
we'll see a tight money recession and lower gold prices in the short run, before
the (almost) inevitable long term inflation.3. For a real comprehensive education,
see the Mises Institute. Here
is a sample reading list. Regards, - OSOM
