Originally Posted by Tunapiano
I think you need to read up on what has happened over there.....you are wrong.
Oh I'm fully aware of what happened over there. That's not the prolblem. The problem is money is simply a derivative of gold and silver. We use a system called "fiat" money which is simply forcing everyone to use a certain money as legal tender laws. When they took the economy off the gold standard they had to open up the gold market to buyers and sellers. No country would trade without price discovery of an economy's currency which is why before 1970 all costume jewelry was silver. And the hunt brothers tried to use silver as currency as a way to get out of the rapidly inflating thieving that government was doing during the 70's. There's no way out this time. It's a good money for bad scam. You can use bad money to drive out good.
Bad money is a paper currency with a concept of debt and interest. Interest doesn't match underlying asset values so these fractional reserve currency systems have to always inflate. The problem is so many people are out of work you will have workers trying to inflate against out of work people trying to deflate the economy. The pressure will be too great this time. You can't run a good money for bad scam by simply jacking up interest rates this time because 40 percent of the goverments budget is "mythical" interest debt. If they jack interest rates to try to drive people out of gold and silver and into dollars it instantly makes the entire debt of the US government a laugh fest because the interest far surpasses the gdp. So it's just held together with counterfeited money that is made out of thin air based on lies or using bad assets as collateral like they weren't a total joke. Currently about 1/4 of our money is collateralized by freddie and fannie on a housing market that is full of dead beats who won't and can't pay thier loans. You can't get people to make new loans.
The auto companies have channel stuffed their dealers and can't sell anything even with huge discounts and in fact they are being subsidized by counterfeited money. 68 percent of all the states are technically broke. Nothing adds up because we use a money system makes people pay 250 grand for a house that sold for 120 grand and is worth 400 grand at the end of the mortgage because of all the counterfeiting. When the house relative to the time the mortgage was taken out is now worth 60 grand because it's structure lifetime is half used up. Accelerate that with a housing market that makes such junk it can't even stand the entire length of the mortgage and will fall in on itself from all the terrible wood and chinese drywall used in it's construction.
It's this simple. Silver is around 36 bucks an ounce and gold is around 1420 an ounce and there is so much oil in the market cushing oklahoma couldn't store a quart of motor oil. There's NO economic activity. The counterfeiting rises the input costs of raw materials which has to make it back into the market someway somehow. We've seen steady slow inflation to the tune of about 40 to 50 percent in the last year and half. But not everything inflates. Some things deflate to margin crushing from having no economic activity and people being artificially pinned to this debt you owe me fiat legal tender voodoo.
It's very simple. You could destroy the entire computer industry with fire, brimstone, earthquakes and plagues and computers would rise in cost. You could expand the computer industry to twice it's size and computers would rise in costs. Price increases were announced months ago before there was any japanese tsunami. Because it's very simple. The forces of margin compression profit destruction runs it course until things break.
Only this time things will go up massively because there is a 50 to 70 percent drop in manufactured goods since 2008. And it's not coming back. You are going to see a massive rapid chain reaction of price increases as it snaps. It will go through every industry and every item from food to clothing to shelter to energy even though there's a huge glut of energy. And it will cause shortages because of revolts and there will be shortages and gluts of everything both at the same time in the same places.
A 25 to 50 percent rise in motherboard costs was baked into the cake 6 months ago. And to recap. The tsunami is completely irrelevant to this and is simply an exercise in causation mind screwing. Blizzards the weather, tsunami's, unforseeable circumstances, unknown factors anything will do to hide and sweep the true causation away.Edited by Hephasteus - 4/1/11 at 6:36pm