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Inflation or Deflation?

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Inflation or Deflation? - Page 17 Empty Sooner than 2052

Post  Shelby on Mon Jul 26, 2010 12:16 pm

http://www.marketoracle.co.uk/Article21225.html#comment93055

Shelby wrote:The following Percentage of GDP chart in the Fallacies & Fear section:

http://www.marketoracle.co.uk/images/2010/Jul/welfare19-10.gif

Indicates that entitlements will consume 18.2% of GDP (equal to tax revenue) by 2052. I had actually read yesterday in a CFR presentation that the projection is 20% of GDP for both by 2040:

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-390.htm#3351

However, as I had explained earlier this year:

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-330.htm#2747

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-330.htm#2737

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-345.htm#2855

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-360.htm#2983

GDP and tax receipts will fall, and interest rates will rise. Thus the end of the ponzi scheme will come much sooner than 2040, more likely within this decade. The nature of a ponzi scheme is that those 2040-2052 projections are based on the continuing confidence and ability of the dollar system to continue massive quantitive easing to fund deficits. I explained that accelerated outsourcing and a shock to GDP (Great Depression) would toss the situation quickly to hyperinflation:

http://www.marketoracle.co.uk/Article21363.html#comment93032

Thank you.

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Inflation or Deflation? - Page 17 Empty Money supply lies

Post  Shelby on Tue Jul 27, 2010 6:34 am

http://www.marketoracle.co.uk/Article21396.html

Shelby wrote:TMS2 is actually demand deposits:

http://www.marketoracle.co.uk/Article21394.html

"First, we cannot be sure of this because the Federal Reserve is lying about the nation’s money supply. They have reclassified demand deposits (which are money) as time deposits (which are not money). The Fed is telling the individual owners of these deposits that they are demand, but it is telling the nation that they are time. They cannot be both."


I had also read about Fed distorted the sweep data. We have inflation, but the govts and central banks are trying to hide it, because negative real interest rates makes gold go up and could burst the fiat ponzi scheme into hyperinflation before the banksters are ready for it.

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Inflation or Deflation? - Page 17 Empty Inverted semantics

Post  Shelby on Tue Jul 27, 2010 6:54 am

http://www.marketoracle.co.uk/Article21199.html#comment93081

Shelby wrote:With all due respect, the theft from savers is only possible because the interest rates are lower than actual inflation. If interest rates were higher than inflation, then inflation would not be a problem for savers.

So the driving factor is not inflation mega-trend, but rather the manipulation of interest rates lower than reality, with $trillions in derivative swaps.

Actually inflation is a ponzi scheme, so it becomes necessary to lie about interest rates at some point in order to keep the ponzi scheme from popping.

This is why hyper-inflation is guaranteed at the end, because ponzi schemes can not be unwound, only reset.

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Inflation or Deflation? - Page 17 Empty Mish again...

Post  Shelby on Thu Jul 29, 2010 3:51 pm

http://www.marketoracle.co.uk/Article21485.html

Shelby wrote:What is deflating?

With deflation, the standard of living should be increasing faster than wages.

Can you find that in any place on earth? Even in China and India there are worker strikes.

When will you ever get it Mish? I have tried to explain this to you several times already.

Get away from meaningless abstract concepts and focus on what deflation should be doing to standard of living if we have it.

Credit is an abstract notion (as you admitted in your prior article that we are measuring everything in terms of a debt money). I don't care if credit is stagnant or declining. It is meaningless. I care about if my standard of living is increasing faster than my wages.

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Inflation or Deflation? - Page 17 Empty WARNING: Sooner than I said

Post  Shelby on Fri Jul 30, 2010 11:18 pm


http://www.marketoracle.co.uk/Article21225.html#comment93055

Shelby wrote:See my prior comment above "Sooner than 2052". My warning is coming true now:

http://market-ticker.org/archives/2540-Good-God-Revisions-To-Chart-Ponzi-Ponzi-Ponzi!.html

Essentially the real GDP is in a free-fall (dead-cat bounces won't stop it). Money printing and inflation will go bezerk soon. The system is spinning out-of-control as I explained in prior comment. No amount of fiscal "austerity" can stop it now. The private sector jobs are gone (and acceleratingly outsourced as companies have to cut costs in this crisis) and the public sector can't absorb this problem, and the debt servicing will skyrocket as % of GDP as interest rates rise (while tax revenues will plummet, especially as taxes are increased!).

Shelby wrote:Alternative CBO scenario

CBO warns similarly and has a chart for the alternate rapid chaos scenario:

http://market-ticker.org/archives/2530-CBO-Director-A-Somber-Warning.html

Sorry to post so many comments today.

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Inflation or Deflation? - Page 17 Empty Gold vs. Inflation

Post  Shelby on Tue Aug 03, 2010 6:21 pm

http://www.marketoracle.co.uk/Article20327.html#comment93345

Shelby wrote:Thanks for thought provoking comments from Nadeem and others.

Nadeem I don't think the gain on gold is exceeding the loss of purchasing power parity if you measure it by the relative gains China is making in PPP, and I don't think the current measures of price inflation are in any way predictive of what is coming. There is an order-of-magnitude (10x) re-balancing of the global wages coming, and it will strike suddenly as a hyper-inflation or currency revaluation.

Gibson's paradox is the theory that gold rises to offset the rate of negative REAL interest rates, because gold pays no interest. So if actual inflation is 10% and 1 year Treasury bond is paying 2%, then gold would in theory rise 8% that year.

But the relationship of gold to real interest rates (interest rates and inflation) is more complex, because gold is also predicting future REAL interest rates. However gold can also be wrong, as it did in 1980, if the govt is able to raise REAL interest rates.

Also gold is global, so gold at +17% per annum is I think telling us that the investment opportunity cost in Asia is about 15% higher than the interest rates being paid on bonds in the west. Gold may be saying that to hold a western bond, we are losing about 15% in opportunity cost (net of risk adjusted), as compared to if we had deployed out investments in Asia.

Moreover, what I think gold is really predicting is that unlike the 1980s, the western nations will implode when interest rates rise to exceed inflation. Under positive REAL interest rates, there will be an implosion of employment and tax revenues, which (according to BIS data, see the CFR presentation I linked recently) will cause the interest payments on the treasury debt to exceed 100% of tax revenue. That is insolvency. The only way out of that is hyper-inflation or severe depression (usually a combination of both). Current projections do not show that risk (until decades out), because they are based on low nominal (negative REAL) interest rates and a bottoming in unemployment. Those projections are unrealistic. Negative REAL interest rates can not persist, they are making the problem worse. And most of the jobs in the west are not needed, as all real production has already been outsourced and accelerating as companies tighten their belts. It is purely a matter of survival, no company is going to be able to pay 10 times higher wages for the same work. The only thing holding up western civilization right now are the suppression of the gold and silver prices and the lies about the true dire situation. Once these realities become clear to the masses, there will be a massive stampede as people try to save themselves from starvation. The govt will be powerless.

This was all planned. This is the way we get to a new world order. The plan was to destroy the nations with their lust for debt. We are already there, we are just in the final years of maximizing the insolvency.

Agreed that punitive taxes on gold will force metal into hiding and cause a dark depression. This depression is necessary to bring the world to its knees and accept the lost of national sovereignty in favor of a new global system. But eventually the world will have no choice but to accept this new global system in order to get food back into their mouths, because once the stampede starts the shelves will be emptied. And without credit system, big farms don't produce. Westerners do not grow food locally any more.

The new global system will pay very high interest rates (initially) and thus suck the metal out of hiding (or deprive the owners of that metal of compounding, sending them to great losses as 1980s did to gold holders).

Why would the banksters do it any other way? Isn't it obvious they are going for it all now at this juncture?

Is the fiat capital gain on British gold coins tax free in UK? Cite a reference please.

Shelby wrote:http://www.marketoracle.co.uk/Article21225.html#comment93055

See the comments at link above, for data supporting my assertions in my prior comment on this page.

In particular, see the alternative chaotic spiral scenario chart from the CBO (USA Congressional Budget Office)

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Inflation or Deflation? - Page 17 Empty Deflation is not aggregate demand

Post  Shelby on Tue Aug 03, 2010 10:41 pm

http://www.marketoracle.co.uk/Article21593.html

Shelby wrote:I am so tired of people not understanding that deflation is purely a monetary phenomenon. Under deflation, then living standards must rise for savers:

http://www.marketoracle.co.uk/Article21485.html
(see my comment at bottom of above linked article)

It has nothing to do with aggregate demand and has everything to do with the monetary and fiscal situation of the legal tender. Implosion of the economy due to demographics is just going to exacerbate the fiscal crisis that leads savers to jump ship and is hyper-inflation.

http://www.marketoracle.co.uk/Article20327.html#comment93378

Thank you.

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Inflation or Deflation? - Page 17 Empty Hyperinflation soon

Post  Shelby on Wed Aug 04, 2010 10:51 pm

http://www.kitco.com/ind/Thomson/aug042010.html

...It’s important you all understand what is the most likely scenario coming in the gold market. We are likely very near the end of the gold bull, but it is likely to be ended with a restoration of the gold standard, a process that will LOCK gold at quasi-permanently high prices. The public will be stunned at the coming size of the move UP in gold...

I don't know his time frame. I assume he is expecting a parabolic rise over the next few years at most.

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Inflation or Deflation? - Page 17 Empty Hyperinflation evidence

Post  Shelby on Fri Aug 06, 2010 3:39 am

http://www.marketoracle.co.uk/Article20327.html

Shelby wrote:Refer to our prior discussion "Gold vs. Inflation" in comments above. And also to the discussion we had in the comments here:

http://www.marketoracle.co.uk/Article21547.html#comment93344

Now the confirmation from John Williams of ShadowStats.com

http://www.marketoracle.co.uk/Article21676.html

"Using GAAP accounting principles, the annual deficit is running in the range of $4 trillion to $5 trillion. That's beyond containment. The government can't cover it with taxes. They'd still be in deficit if they took 100% of personal income and corporate profits."

I had been aware that he originally wrote that some weeks or months ago and had quoted him at my blog (goldwetrust.forumotion.com)

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Inflation or Deflation? - Page 17 Empty Fiscal wags monetary policy

Post  Shelby on Sat Aug 07, 2010 12:59 am

http://www.marketoracle.co.uk/Article21695.html

Shelby wrote:"In a purely fiat regime, the question of a general (monetary) deflation and inflation is a policy decision"

Hyper-inflation (and thus policy actions) can not be avoided due to fiscal reality. Policy is not wagging the fiscal, but vice versa.

"Things are in bull markets, or bear markets, until they are not. The undeniable trend break is the best indication of change in momentum"

That won't help you with hyper-inflation, it will be too late.

Educate yourself about inflation versus deflation:

http://www.marketoracle.co.uk/Article20327.html#comment93486

www.marketoracle.co.uk+Shelby+Moore" target="_blank" rel="nofollow">http://www.google.com/search?q=+site:www.marketoracle.co.uk+Shelby+Moore

Cheers.

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Inflation or Deflation? - Page 17 Empty Why hyper-inflation is certain

Post  Shelby on Sat Aug 07, 2010 10:15 pm

http://www.marketoracle.co.uk/Article21693.html#comment93545

Shelby wrote:Patience

Fred commented:

"Hyperinflation? Wrong."

It will happen suddenly, due to the fiscal abyss in front of us.

The only way we get deflation is if gold is returned as the legal tender, which is of course politically impossible until after the entitlements and debt has been inflated away. Now can you inflate that away without causing a stampede into hyper-inflation? I say no way, because once the cracks in the damn break on the fiscal insolvency, it will very fast, with Greece as an example. Who will bailout the USA in that case?

Shelby wrote:Perhaps this may be my final comment on inflation vs. deflation, as I am starting a new company and will be busy.

Fred,

Regarding your link arguing against hyper-inflation by Stathis, I had already refuted him about gold, see my comments at bottom of the following article:

http://www.marketoracle.co.uk/Article19888.html

Also specific comment:

http://www.marketoracle.co.uk/Article20327.html#comment93378

Let me expound on that. In addition to the points I had already refuted at link above, Stathis is also arguing at your link, that since the banks are hoarding the QE as reserves, we can't get the monetary velocity of hyper-inflation. Mish and other deflationalists provide this reason as well.

They don't seem to understand that hyper-inflation is caused by the public running away from the legal tender, so it does not matter what the banks do, it matters only when the public decides to stampede. At that point the government only has 3 choices, a) back the currency with gold to stop the stampede or allow the stampede to gold to run naturally, b) print currency like mad and drop it from helicopters. Both of those are hyper-inflation.

As to what is guaranteed to cause the public to stampede, it is the fiscal insolvency that they do not yet realize, but the fiscal situation must break at some point:

http://www.marketoracle.co.uk/Article20327.html#comment93486
http://www.marketoracle.co.uk/Article21695.html#comment93525

And it can't mathematically break towards deflation, without BOTH higher interest rates and gold currency (which is precisely hyper-inflation relative to fiat). The reason is political. The promises made with the current fiat system are insolvent. I don't know why it is so difficult for people to admit and accept shocking truths, maybe the public wants to deny that we are all thieves (can't accept responsibility and guilt and self-adjust their lives back to not stealing):

http://www.marketoracle.co.uk/Article21650.html

But once the truth becomes too painful to ignore, there will be hyper-inflation. The longer the denial can go on, the worse the insolvency is going to be.

Please realize that yes we do have general price deflation and it is relative to gold, as only gold can retire bad debt. And that is inflation if holding fiat. And this will soon turn to hyper-deflation for those holding gold and hyper-inflation for those holding fiat. Note we do also have deflation relative to both fiat and gold, in certain credit bubble assets, but this is just the fork in the cooked turkey (the big mis-allocation of capital that is going to cause under-supply/rationing/price inflation of necessary things). Look at the bigger picture of the fiscal situation and the assets (commodities) that the entire word consumes daily to survive.

Remember deflation is an increase in purchasing power, and inflation is the opposite. Those who waste their time on abstract concepts such as the money supply (an arbitrary concept that even Alan Greenspan admitted can never be defined or measured), are missing the truth of the matter.

Also you can be sure that banksters position themselves to profit off the hyper-inflation, and you can see they have been doing all the necessary steps:

http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html

Hope you all realize before it is too late. I can not keep posting comments here to refute all the mis-information.

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Inflation or Deflation? - Page 17 Empty Hyper-inflation alarm

Post  Shelby on Sun Aug 08, 2010 7:18 pm

http://www.marketoracle.co.uk/Article21693.html#comment93559

Shelby wrote:Banksters preparing for hyper-inflation, we are just 1 step from hyper-inflation:

http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html

"Once the bulk of assets of transferred, write them down to leverage the public financial backstop."

http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/

"An August Surprise from Obama?...

...Suppose someone owes $500K mortgage on a house now worth $300K. In a refinance, the original mortgage is paid in full and a new one issued. Fannie would forgive $200K and issue a new $300K mortgage.

Let’s follow the money. Where would the $500K that Fannie (we the taxpayers) pays to terminate the original mortgage end up?...

...Our tax money would bail out the fat cats, pay them in full."

So the banks get relieved of the mortgages (and get the cash before hyper-inflation starts) and the mortgages are transferred to the federal govt GSEs (Fannie and Freddie), because during hyperinflation, the value of the mortgage declines towards 0 from the lender's perspective.

The bankers can use the cash to jump-start the hyper-inflation by completing the last step:

"Buy up as many remaining assets on the cheap as possible. Hide this action."

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Inflation or Deflation? - Page 17 Empty Why hyper-inflation

Post  Shelby on Mon Aug 09, 2010 2:58 pm

http://www.marketoracle.co.uk/Article21738.html

Shelby wrote:"Von Mises pointed out that, once a money expansion starts, it tends to accelerate to the upside. This is because the paper aristocracy is in control, and they need to crank the printing presses faster and faster to maintain their profits."

That isn't the entire cause of hyper-inflation. Rather it is caused by the public realizing that the currency is (or destined to be) losing value at a very fast pace, and the public dumps the currency for hard assets. I explained this in more detail:

http://www.marketoracle.co.uk/Article21693.html#comment93559

Once the public realizes that the government is unable to service the interest payments on the federal debt (greater than 100% of tax revenue) and by that time the government spending is most of the economy, then the public knows it is impossible for the economy to sustain without government printing money to pay its obligations. And it is impossible for the government to reduce (austerity) its expenditures, because nearly the entire economy is the government at that point. By delaying the onset of the hyper-inflation, the stimulost programs have been increasing the government as percentage of the economy:

http://grandfather-economic-report.com/spend-regulation.gif
http://market-ticker.org/archives/2530-CBO-Director-A-Somber-Warning.html
http://www.marketoracle.co.uk/Article18890.html
http://www.marketoracle.co.uk/Article20327.html#comment93486

So on realizing the death spiral is unavoidable, the public dumps the currency and the government must print currency at faster rates in order to incentivize people to take the money and keep the economy functioning. As Katz explained for the Zimbabwe example, this fails over time, as people eventually refuse to accept the currency for anything at any price and all work stops and the people die of starvation and disease.

But to the extent that the public is able to conduct transactions in hard assets (silver is best, next gold, next barter assets), then the economy is able to function minimally and some people are able to work. But the government will usually try to prevent this, in order to force the legal tender currency to be accepted as a monopoly. The government is economically forced to become fascist.

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Inflation or Deflation? - Page 17 Empty Deflation in which currency?

Post  Shelby on Wed Aug 11, 2010 3:00 am

http://www.marketoracle.co.uk/Article21777.html

Shelby wrote:I have commented extensively on inflation vs. deflation:

http://www.google.com/search?q=site%3Amarketoracle.co.uk+Shelby+Moore

This article is correct up to the point where it states that deflation is ultimate result of the mis-allocation of capital from the prior inflation. We have never had deflation on a fiat currency in history of the world. The 1930s deflation was relative to gold, up until the gold was confiscated. We've had nothing but inflation ever since (except as measured relative to gold since 2001), and ditto for every other fiat currency in history of world.

Instead prices will rise in those sectors that received under investment during the inflation, for as long as it takes for renewed investment to generate the lost production from the former mis-allocation.

Worst yet, when the mis-allocation causes a sovereign default (i.e. govt owes more in annual interest than it can collect in taxes, even more than the annual GDP) due to unemployment and former mis-allocation of inflation, the default can only decrease the value of the sovereign currency, whether it be by actual default or by QE (govt printing money to buying its own debt). A decrease in the value of the currency is inflation, and a sovereign default is hyper-inflation:

http://www.marketoracle.co.uk/Article21738.html#comment93613

So deflation is not the ultimate outcome of inflation, but rather hyper-inflation, as all fiat currencies in history eventually return to their intrinsic value of 0. The reason that that all fiat currencies fail is because they are mechanisms for enabling mass theft:

http://www.marketoracle.co.uk/Article21764.html#comment93641

The final deflation is relative to gold and is occurring simultaneous to the hyper-inflation in the defaulted (insolvent) fiat currency.

Shelby wrote:"Inflation over the last 12 months has been a scant 1.1 percent"

Wrong, it has been between 5 and 10%:

http://www.shadowstats.com/alternate_data/inflation-charts

How could you not know this?

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Inflation or Deflation? - Page 17 Empty Escalation? (Iran attack could usher in hyper-inflation due to rush into gold)

Post  Shelby on Thu Aug 12, 2010 4:50 pm

http://www.marketoracle.co.uk/Article21554.html#comment93701

Shelby wrote:What counter measure can be done against a torpedo rocket skimming across the surface of the water at 2000 miles per hour? We couldn't even stop every SCUD missles in the air, and much more difficult for something much smaller skimming along the surface of water. Surely technology has improved, but heat seeking probably won't help you with you all the interference of the rocket interacting with the surface of the water. Ditto laser. The only counter measure I can think of is to surround the tankers with armada of sacrificial lamb ships. That might be plausible, assuming you have enough of them to replenish after each one is sunk.

The USA military wouldn't be able to win another Vietnam in the jungle, and for the similar reasons you can't compare this to wiping out the Republican Guard in Iraq where they were sitting ducks in trench lines (buried alive by the 1000s with bulldozers). Instead you would be trying to find needles in haystacks in the desert coastline. And don't think the needles can't dig holes in the sand to hide themselves. You would have to put foot soldiers on the ground at sufficient density, and I doubt 100,000 would be enough. As Casey says, the militaries fight the last battles, not the navy or the air force, because the final battles are fought tooth and nail, inch by inch. Unless of course you can just nuke the whole planet, as Nadeem pointed out. There is no way to use nuclear as an effective deterrent unless you use it sufficiently to kill every last person, because these middle east fanatics (aka patriots) are not going to stop if you just take out one city, this will likely just turn more of them into suicide attackers and turn it into a religious war (Islam vs. infidels). And if you use nuclear to that degree, you will have escalation, especially given that it will send the western nations directly into poverty (they are teetering that direction any way), due to the mad global rush into gold that will follow any use of nuclear. At that point, China will have very little reason to continue propping up the west, and will have riots at home, escalating political pressure which must be diffused by blaming someone and usually with a war to direct the blame. And Russia would love war, as it would drive the demand for its natural resource to the moon.

The USA hasn't won the war in Iraq and if we stay there long enough we will bury our military there. If we add more such battles, it will only hasten the fall of the west.

The fuse for WW3 is dangling and ready to be lit by the current financial tsunami developing. So I will disagree with Nadeem, and say the nations do not have control over themselves any more. And have incentive for such an escalation. You will see chaos and everything is going to spin out-of-control eventually.

The wildcards include technology:

http://www.caseyresearch.com/displayCwc.php?id=68
(I think I know the answer and am working on it)

Got gold yet?

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Inflation or Deflation? - Page 17 Empty Nuclear chess

Post  Shelby on Fri Aug 13, 2010 1:35 am

http://www.marketoracle.co.uk/Article21554.html#comment93732

Shelby wrote:Nadeem I am surprised you would advocate a "solution" that involves the UN. So seems you are a closet socialist and new world order slippery slope (big govt, loss of local sovereignty) proponent?

It is precisely the chaos of the coming financial implosion of the west (hyper-inflation in fiat, deflation in gold, poverty for westerners) and the world war 3 it will induce (govts need to direct the anger of poverty), that will induce the world to accept a supra-national governing order.

All the nations are just chess pieces for the banking elite who are committed to their world govt plan. It is simply a matter of positioning the nations in economic situations which force them to accept war. Nuclear proliferation will be pretty easy, as all they have to do is set off one rogue, and that will spiral out-of-control, especially with the financial implosion it will induce as investors race to be liquid (which means buy gold, because as the race accelerates, the fiats will be imploding towards their intrinsic value of 0).

The only solution is one that stops the mass theft system AND brings prosperity and control to the hands of those who are intelligient enough to not steal and to create prosperity for mankind, and such solution is a technological one that totally changes the intellectual property control of the world. I have written extensively about this, and now am programming it. I doubt I will succeed in time, and confident that a chaos lies in front of us of unimaginable horror.

Shelby wrote:Disperse non-theft power

TPTB know exactly when they will start the hyper-inflation...

They will let the hyper-inflation run once they have sold all the debt to the govt, and they have used that money to buy up assets that will go up in price in the hyper-inflation.

They can trigger the hyper-inflation with numerous chess moves, including a war in Iran. They have proved that they even control the oceans with BP saga.

Gold and silver will not protect you. TPTB have plans to tax you and defeat you.

The only wildcard TPTB do not control sufficiently, are any spontaneous revolutionary technology paradigm shifts. For example, the invention of the cotton gin or the steam engine.

We need an internet paradigm shift that renders the control of TPTB impotent.

Other than that, live humbly and pray.

We've probably entered a severe Tribulation, but probably not the final one. It is put up or shut up time for me, and others who have any plans for interferring with this big push to NWO.

It is probable that TPTB are not "one brain" and do not act with any identifiable consciousness, but rather just a natural phenomenon in action. In this case, rephrase my statement, "TPTB system will naturally transistion to hyper-inflation when all of its ducks are in a row". And that system involves control over the nations and even the oceans.

For example, if we could get a completely frank interview with David Rockefeller, I suspect he would tell us about situations he is in that compel him to make certain decisions, and find that he has literally no control whatsoever. I suspect the system and situations are in control of him.

Thus any solution that involves more centralized power (e.g. Nadeem's idea of compelling the UN to attack with nukes), is not a solution (people offer non-solutions, i.e. laws and centralized futility, when they can't see the fundamental nature of the problem that has to be solved). The only solution or fix, is the one that disperse power back to those masses who do not steal:

http://www.marketoracle.co.uk/Article21650.html

Such dispersion of power will destroy the mass theft situations which are leading us into this mess.

War is fundamentally driven by economic situations, not vice versa.

Punishment will come to all of us thieves who refuse to stop. I would prefer a paradigm shift that avoids nuclear war.

Shelby
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Inflation or Deflation? - Page 17 Empty Decentralization is the only way out of the mess

Post  Shelby on Sat Aug 14, 2010 12:42 am

Decentralization = end the theft system = end socialism

Unfortunately (or fortunately because the world will be cleansed) most people can not understand math or the 2nd law of thermodynamics, and so they are destined to stay in the theft system until they kill each other:

https://goldwetrust.forumotion.com/knowledge-f9/book-ultimate-truth-chapter-4-borrowing-is-stealing-t152-15.htm#3431

SilverEye, the bible tells us that TPTB will gain power until they have all the gold and then they are defeated by the Anti-Christ. And mathematically this is understood to be true, see link above. However, they are not in control of their power, the power (theft system) is in control of them (everyone in theft system, including TPTB are on a hamster wheel).

Steve, the theft system naturally allows TPTB to avoid taxes and transfer wealth from the masses to them. We will be destroyed even with our gold and silver, because we gained it in the theft system. None of us would be as wealthy as we are, if we had been born in the 3rd world (well I might be an exception, because I gained most of my wealth working from a Nipa Hut in squalor and with weekly dysentry). The only people that will escape with more talents will be TPTB and those who are succeeding in exponentially growing the decentralization seed. Then the final battle looms and of course the thieves will all perish. It is not about gold and silver (they are just minor tools in this), it is about paradigms.

Steve, it is economic failure to be self-sufficient:

http://jasonhommelforum.com/forums/showthread.php?p=54674#post54674
http://jasonhommelforum.com/forums/showthread.php?p=54685#post54685
https://goldwetrust.forumotion.com/health-f5/preparing-for-coming-crisis-t41-45.htm#3402

The maximum division-of-labor and economy-of-scale will obliterate any "jack of all trades" (uniform distribution of diversification), but it is wise to have a Bell Curve distribution to your diversification to maximize survivability from extreme events.

Steve you have bet the farm on peak energy and decline of civilization back into the 1800s. You will lose that bet (eventually, but you may win for a while), because nature NEVER goes backwards, rather there are some rhymes but in total new directions overall. This is what the 1856 law of thermodynamics says. And it is has always been the case in history. Yes there are set backs (e.g. the Dark Ages), but even during the Dark Ages, there were new seeds of division-of-labor and economy-of-scale that were growing exponentially, which eventually lead to the Renaissance (once those paradigms had gained mass involvement). Specifically nuclear energy with breeder reactors will give us thousands if not millions more energy than we have now. You will be correct only for as long as the theft (socialism) system is still peaking. We will go through a dark period (possibly ending in a complete implosion and extinction level event), but we will eventually come out of it with more than we have now.

Steve you have also bet on decentralization, so in that respect you are on the correct trend, but you are overfocused on a future with no energy (nature going backwards into more order, and not forwards into more disorder, in violation of the 1856 law of thermo). Remember energy is the process of transforming matter from order (chunks, few independent actors) into disorder (dispersed, decentralized, more chunks, more independent actors):

http://www.coolpage.com/commentary/economic/shelby/Mass-Entropy_Equivalence.html

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Inflation or Deflation? - Page 17 Empty Fallacy of socialism

Post  Shelby on Sat Aug 14, 2010 5:03 am

http://www.marketoracle.co.uk/Article21693.html#comment93743

Shelby wrote:"If I was in control of the fed I would start buying up the worlds gold supply. I think it is something possibly the only thing that can fix the economy"

You are mathematically advocating hyper-inflation.

That is why you will never work at the fed. This would implode the value of the paper everyone is holding, i.e. hyper-inflation.

The Fed couldn't just magically buy gold at current price without pushing the price up as they gained enough gold to back the current value of the total fiat at the market gold price. For one thing, all gold ever mined is only $6 trillion, and that 160,000+ tonnes. The fed couldn't buy 1000 tonnes without being detected (mines only produce 2000 tonnes per year). Thus the price of gold would rise and the value of what ever gold held by the fed would amply back the fiat in existence, but with the holders of the fiat much impoverished.

Any way, the price of gold (hyper-inflation for those holding fiat) is going to happen, even though the fed is obligated by law to try to stop the hyper-inflation from happening. Which is why the fed is can not do what you suggested.

It is sad that you don't understand socialism. If a centralized force obtains the gold, then there is a huge theft of human capital (you can't just take gold and give it to the population, that is STEALING!). Suggested reading:

https://goldwetrust.forumotion.com/knowledge-f9/book-ultimate-truth-chapter-4-borrowing-is-stealing-t152-15.htm#3431

https://goldwetrust.forumotion.com/economics-f4/inflation-or-deflation-t9-405.htm#3432

It is really sad how stupid the people are these days. Most everyone is fully indoctrinated into socialism, so much so they don't even realize they are socialists.

And socialism ends horrifically. And people wouldn't have a clue how to avoid the outcome, because they don't even know they are socialists, because they don't even understand anything about what human capital is and how to most efficiently organize it in a free market (certainly not by doing any centralized action).

Sad. Truely sad, is the only way I can describe my experiences commenting on this site. I do appreciate the opportunity to learn and document for myself the pitiful state of the sheeple in our world. At least I won't feel there was any other possible outcome. Revelation in the Bible is mathematically correct. Failure peaks before it implodes. These interactions are proof of how failure peaks as the sheeple emulate each other.

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Inflation or Deflation? - Page 17 Empty Re: Inflation or Deflation?

Post  Shelby on Mon Aug 16, 2010 2:11 pm

I put the odds reasonably high too of a sudden revaluation by decree (possibly done via China revaluing the Yuan and pegging it to gold and SDRs with gold backing) rather than a market driven parabolic frenzy. And Steve has an awesome point. Most of our money is not in cash form, so there won't be time to rush out and buy gold if the govt devalues.

I have a theory that the way the SDR will get gold backing is the gold already backing it (see recent transfer from Portugal to BIS) will be revalued up relative to the currencies in the basket, and the Yuan will get revalued up in the basket suddenly.

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Inflation or Deflation? - Page 17 Empty How to bring jobs back?

Post  Shelby on Tue Aug 17, 2010 7:15 am

http://www.marketoracle.co.uk/Article21925.html#comment93844

Shelby wrote:Rick wrote:
"bring the jobs back"

I am growing tired of explaining this over and over again.

How do you expect the get the jobs back? You will enact some decree or erect borders? Coase's theorem insures that you can't succeed, because nature always routes around any extra costs.

The only way to bring the jobs back, is let gold price rise so that the dollar lie is destroyed:

http://www.marketoracle.co.uk/Article20263.html

and thus the wages in the west will be drastically reduced and competitive with those in developing countries. This is of course going to happen and it is called hyper-inflation (aka devaluation).

If you try to avoid it by erecting artificial barriers which keep wages high, then the market will simply stop trading with your country, and then your country will implode because I can tell you that USA can not support its current inflated dollar illusion with internal production. You have to reset and start building from a very low level all over again, because of the decades of mis-allocation due to the westerners feasting on an orgy of debt:

http://www.marketoracle.co.uk/Article21650.html

The damage has already been done, it is way too late to stop the hyper-inflation and implosion of real wages. We are only trying to delay it, and that will just make it worse.

But you will never learn, so why do I bother telling you?

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Inflation or Deflation? - Page 17 Empty Interest rates will go to 0?

Post  Shelby on Tue Aug 17, 2010 12:32 pm

http://financialsense.com/contributors/barry-ferguson/why-us-treasuries-will-eventually-yield-nothing

Reason #1: In 2008, the US had $12 trillion in debt and in $2009, $13 trillion in debt. Again, I’m rounding by hundreds of billions. In 2008, the Treasury reported that the average interest coupon was 3.4%. In 2009, the average interest coupon was 3.1%. Do the math. The interest owed in 2008 was $408 billion and the interest owed in 2009 was $403 billion. The result is, even though the debt increased by a trillion, the interest owed went down $5 billion. To illustrate the impact of falling interest rates, a $20 billion dollar debt financed at 2% would yield just $400 billion in interest. According to the Congressional Budget Office, the US took in $2.5 trillion in revenue in 2008 and spent 8% of that in interest payments. 2.5 trillion times 8 percent equals $200 billion. Now take $20 trillion in debt (most pundits see us there in less than 10 years) and finance it at 1%. The interest payments would equal $200 billion. If tax receipts stay at least steady, the US can continue to pile up debt as long as interest rates fall. Do you feel me?

I believe interest rates = 0 eventually cause hyper-inflation (or devaluation by decree), because the it is huge mis-allocation of capital that will be causing unimaginable pain on the people in terms of either lower real wages, jobs, and/or higher prices.

Any way, once hyper-inflation or devaluation occurs, interest rates will skyrocket, and then that $20 trillion deficit, will cost $4 - $6 trillion per year in interest payments. So obviously that is what happened to Germany after WW1, and led to Hilter's rise into WW2, because the Germans were suffering so much.

I can't tell you exactly how it is going to play out, I just know there is going to a lot chaos and misery.

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Inflation or Deflation? - Page 17 Empty Gold became a reserve currency as of Nov 2009?

Post  Shelby on Wed Aug 18, 2010 2:32 pm


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Inflation or Deflation? - Page 17 Empty Real wages must decline faster, or hyper-inflation is inevitable

Post  Shelby on Thu Aug 19, 2010 7:49 pm

Nadeem your concise summary is spot on. Keeping the wages artificially elevated will simply insure it ends in hyper-inflation instead of inflation. Lowering taxes can help lower that rate of inflation and maybe ease the transition by preventing hyper-inflation (but I doubt it as the fiscal time-bomb is already intractable). Rick's comments (and others) seem to indicate that the westerners can't tolerate the inflation (and worse the hyper-inflation they will get in the end if they keep resisting the real wage adjustment).

Rick, actually I used to think like you do back in 2006, when I used to comment on Stein Report. I was against immigration, against NATFA (even volunteered for Ross Perot in 1992 in Newbury Park, CA office), H1-B visas, etc..

Then around 2007 it hit me. I became a Libertarian. I realized mathematically that I was wrong, and that all the barriers I wanted to erect would actually cause more misery.

It is not that I don't feel your pain, heck I lived in a squatter area, had to borrow $1 to eat, and had dysentery every third day living in a 3rd world country back in mid-1990s. So it is difficult for me to weep about westerners who think nature owes them a "living wage". Yes nature will give you that, but not if ALL OF YOU HAVE BEEN STEALING FROM EACH OTHER:

http://www.marketoracle.co.uk/Article21650.html

The part you forgot Rick is in that link above. Every single American person (and every westerner) has been stealing via their use of the usury system. It was fun while you were stealing, and now comes nature to make you pay it back. You don't realize it Rick, but mathematically the fiat system was used to rape the developing world of natural resources and feed it to the Westerners as debt. And we gorged on it. And now there is nothing mathematically possible to stop the pay back.

It is not a lack of empathy on my part. I am a very empathetic person, but not to thieves, and even if I could, I couldn't stop what is coming. It is mathematically assured. Are you prepared? That is the only thing that matters. Take care of yourself.

P.S. The corporate and govt fraud was caused by the Westerners gorging on debt, which was caused by the Fed manipulating interest rates and suppressing gold:

http://www.marketoracle.co.uk/Article20263.html

Until we stop using usury money system, then we will not stop these kind of horrific booms and busts. But we can't stop using usury money systems for as long as human beings want to borrow and save and insure at compound interest rates. Mathematical fact.

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Inflation or Deflation? - Page 17 Empty 2012 or 2013 hyper-inflation starts

Post  Shelby on Sat Aug 21, 2010 11:14 pm

Looks like 2012 for the big hyper-inflation or devaluation event (i.e. Obama "New Deal"):

http://www.marketoracle.co.uk/Article22086.html

Inflation or Deflation? - Page 17 07-30-10-Global_Money_Growth-3

Inflation or Deflation? - Page 17 Tectonic_Shfts-2010-2013

Inflation or Deflation? - Page 17 Cartoon-Pelosi

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Inflation or Deflation? - Page 17 Empty 0% interest

Post  Shelby on Wed Aug 25, 2010 1:38 pm

http://www.marketoracle.co.uk/Article22161.html

Shelby wrote:Bravo!!! BRAVO!!!!

I have been watching you develop this article and glad you finally perfected it and published it here.

I have also been explaining in my articles and comments that interest rates will go much lower perhaps to 0%, before they go to double-digits:

http://www.google.com/search?q=site:marketoracle.co.uk+Shelby+Moore
http://www.marketoracle.co.uk/UserInfo-Shelby_H_Moore.html

But one reason you failed to mention. The higher interest rate debt is being transfered to the public sector, while the fed banks are allowed to recycle the bad debt to public sector and the make new loans where they borrow at lower interest rates. And this kills the non-fed banks which can't get these special deals, so they are closed down and then sold to bigger banks which are eventually closed down and sold to fed member banks:

http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html

Of course this is all super inflationary, but in terms of declining REAL wages, not necessarily in prices:

http://www.marketoracle.co.uk/UserInfo-Shelby_H_Moore.html
(Read "How Deflation is Inflation")

What will happen at the end game, is that people will run from bonds to gold and silver and that will be hyper-inflation (or it will be done by decree).
Inflation or Deflation? - Page 17 Economic-stimulus

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