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m2, money, inflation, etc

Scorpio

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#1
You have heard in the past few years where we here brought it up regarding more and more inputs needed to achieve same x output,

Goes back to discussions over the years where more and more fiat gets injected into the system, but without the comparative output,

The output per unit of fiat then becomes illusory only, represented thru the financialization side of the economy, rising stocks, rising monetary digits existing in various areas, rising land prices and so on.

As you can see from the following charts, M2 changed course back in the Reagan admin, and that was the crash of 87. Throughout the klinton years, M2 was on a different trajectory, then came bush and the housing collapse, and we took off on a new course again with yet more being injected year over year. Then recently, we have this huge anomaly associated with the plandemic. Massive growth in fiat, plunging gdp. Yet that isn't really fair, as they turned off the switch to one side of the equation.

The anomaly doesn't even equate or compute. In prior recessions, draw backs, whatever you want to call them, they barely register on the chart. But this one is a big deal in both time and amount of decline vs fiat input.

I have attached a couple of charts so you can compare the rising m2 into the system vs the output of gdp. You can clearly see the 3 and now 4 glide slopes of the inputs vs the only 2 and now 3 of the gdp.

Perfectly illustrating what we have stated, greater and greater inputs to achieve less and less output.

m2.jpg





GDP.jpg
 

Scorpio

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#2
now with housing prices over time, the pace held pretty consistent for years, then with the massive injections keeping the dream alive from 00 to 07 or so, you can see a bubble top formed, then a return,

yet prices never did return to the jump point in 00, they corrected off those bubble highs, and now are on a higher trajectory, matching the fiat expansion over this recent period. And that is why we have house prices where they currently are at.

They of course make all manner of explanations for it, mills coming out of their hidey holes, demand up, supply down, land prices up, whatever

The reality is, housing follows overall fiat injection relatively closely. As it is one component of the economy that takes into account many many facets of that economy. From the plumber to the electrical wire to the land to the developer to the cities and towns. All of those get factored into 1 house price. So it really is a pretty good view of the monetary situation.

Then too, over that period, we must allow that to keep this illusion alive, interest rates have been declining. The avg person having housing affordability issues, due to lack of wage growth, has been allowed to keep participating using those low interest rates. Without the overall collapse in interest rates over time, this thing would have collapsed long ago.

Begging the question for 21 and beyond, with rates already around the zero band, where does it go from here, and how does it impact housing, the economy, and fiat?

There really are just a couple of inputs the persons trying to buy can use to effect affordability. Lower rates help them if making the same wages, as it keeps them in the game on a monthly basis carrying amount. Yet that does not account for increasing taxes and utilities over time. Regardless, the other is to make more in wages if interest rates remain the same while housing prices continue to move up.

We have stated here that the illusion eventually collapses if the workers do not get wage increases. You have heard me speak of this many times. This should become all too clear at this point. This follows also with a consumptive economy overall. The prices of suv's and furniture all have to be accommodated at the same time home prices are rising.

At some point, that fiat injection has to make it to the working class, or the system collapses. There is no other answer. The current paradigm of money/fiat coalescing to the corps and the stocks and the upper crust, will cause a collapse. It is but a question of when, not if there is a way out. Again, there is no other answer.

You have heard me rail on the corps for the longest time now, and the system as currently constructed with the illusory rising stock prices, etc.
When I get on people for buying from joozon or others like it, I do it because this is what I see. By encouraging them to do what they do, takes us further and further from a reasonable solution.

Now you may get a appraisal on your home and go 'I'll be darned, look at that honey', but in effect, then you have to turn around and buy a replacement. All else equal, that monetary value you see on that appraisal report isn't really worth much to you as you will need it to replace that which you are selling. Then of course, they are using that inflated value to assess their ransom value to the property. Your house market price is increasing, and so are your taxes with the requisite carrying costs also, such as utilities.




hse.jpg
 
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Casey Jones

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#3
This is a very-simple cause-and-effect situation, that the Central Banksters and those who cover for them in media and academia, try to fog with complexity.

Money had value because of its scarcity. Because, for it to work, it has a fixed supply, and to get it, you have to trade something of value. Something that represents WEALTH - either that you own or you made/grew/harvested.

When you hold money, in such a situation, it is proof that you once had wealth in another form, or provided productive labor...and thus, you have claim to other goods in trade. Money is proof of your contribution.

When the money supply is increased, NOT from wealth-holders from elsewhere coming into your sphere, but simply by printing up fiat (first red flag, money is no longer limited and now not scarce, at least to some) it debases the value of all other units of money out there. This isn't complex - it's a mathematical function and it's ECON101.

That is called "inflation." The money supply is inflated. It happens with the printing of fiat; but forgotten, is, it can also happen when suddenly a Treasury or Central Bank beholds huge new stores of gold. As did Spain, as it plundered the Aztecs for their gold...even though their money was based on precious metals, suddenly there was an increase in the supply, destabilizing the whole economy.

Okay. Inflation...simple. What's fuzzed and confusing is the Keynesians and others, trying to REWRITE MEANINGS. To confuse what's happening. They redefine inflation as price increases; and they somehow fear "deflation" (falling prices, due to lack of demand due to chaos in the economy) as a bad thing.

So they babble on about inflation<->deflation while money-printer go brrrr...and the currency amout out there increases exponentially, and the effect in the market is delayed, since the crony banksters are far removed from Walmart markets.

This is an abuse of terms and of the language, and like other abuses, is intended to HIDE what they're doing, and CONFUSE the public.

Do not allow yourselves to be so confused.
 

EO 11110

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#4
irks my last nerve that the people that get it right - by being in cash when liquidity dries up and all of the casino players are begging for cash to cover their action....

instead of having to pay grandma for borrowing her cash at a nice fat rate -- frbny comes in and destroys grandma by handing out free cash and suppressing grandma's interest rate at her bank

she was right -- and got the shaft. the gamblers were dead wrong -- and got made whole on their errors/losing bets (at least)
 

Buck

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#5
But this one is a big deal in both time and amount of decline vs fiat input.
"But This Time It's Different"..."It's Worse, Much Worse..."

:summer:
 

Uglytruth

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#6
The GDP shows where the end of the 20teens where things were getting better, jobs, wages, interest rates........

How much "consumption" is stopped when interest rates are zero? Once your home is paid for the money goes into investments and interest / dividends / returns makes one feel good so they consume. Cars, remodels, travel, presents for family, etc..... Seems the boomers either don't have a pot to piss in or can't consume because they have no safe "income from their investments".

The other side of that is young that have shit jobs and school debt can't consume.
 

Silver

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#7
Thanks for the original content. Enjoyed reading it.
 

Brio

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#8
This is an old one but a good one

Copyright © 2007 A. E. Fekete
All rights reserved

CAN WE HAVE INFLATION AND DEFLATION ALL AT THE SAME TIME?
(snipped)
Decoupling tectonic plates Side-by-side of deflation of hand-to-hand money there will be hyperinflation as the stock of electronic money will keep exploding along with the price of assets. You will be in the same boat with the Chinese (and the son of Zeus: Tantalus). You will be put through the tantalising water torture trillions of dollars floating by, all yours, but which you are not allowed to spend. The two tectonic plates will disconnect: the plate carrying electronic dollars and the plate carrying FR notes, with lots of earthquakes along the fault line. No Herculean effort on the part of the government and the Federal Reserve will be able to reunite them. At first, electronic dollars can be exchanged for FR notes but only against payment of a premium, and then, not at all.

https://professorfekete.com/articles/AEFCanWeHaveInflationAndDeflation.pdf

Perhaps he was correct, that digital dollars will be the next Wiemar currency, and I'm wondering cryptos fit in.
 

AurumAg

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#9
I think the solution is another $7 Trillion FRN bailout.
 

Buck

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#11
what, that $600 wasn't enough?

come on man...main street ain't made of what all those tax dolllars were made of, now is it? or is it? it's gone and we're still paying for it, like that 7 year car loan, or that reverse mortgage deal your grandparents got 'cause youre too fkn lazy to go mow their lawn 'cause you hate 'em 'now go ahead and die you old boomers'..."


sorry, there's a joke in there somewhere...we're 'Mericans, where the hells are we going with this?
 

Casey Jones

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#12
what, that $600 wasn't enough?

come on man...main street ain't made of what all those tax dolllars were made of, now is it? or is it? it's gone and we're still paying for it, like that 7 year car loan, or that reverse mortgage deal your grandparents got 'cause youre too fkn lazy to go mow their lawn 'cause you hate 'em 'now go ahead and die you old boomers'..."


sorry, there's a joke in there somewhere...we're 'Mericans, where the hells are we going with this?
Going into collapse, tyranny, abandonment of learning.

We're going where the Romans went, when they went from fat, comfortable, idle citizens enjoying their bread and circuses, to the dirty, diseased, illiterate peasants with no knowledge of what went on four generations before them. Where life was nasty, crude, brutal and short, and all at the pleasure of the liege lord or duke or potentate.

This is called "Fall of Civilization." Stay tuned...because this is your life.

FWIW, I don't think it's at all an accident or isolated incidents, even by regions, that these old people are being put in proximity to the Beer Cooties carriers. The kids weren't joking when they first called it Boomer Remover - that's what they absolutely WANT.

And government, too. They made it impossible for a person to save for his own retirement; and then begrudge an old person's use of Ponzi Security and Medipain. Nope...gotta save the planet, save antiSocial inSecurity...AND...cut spending on Medicare to make things "fair."
 

Fatrat

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#14
While the cost of sign blanks have gone up, scrap aluminum cans remains steady...somethings fishy here.
 

EO 11110

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#16
is 96 billion dollars of free food enough? more than half of americans adults pay negative or zero income tax - the rest of us are the suckers at the table

1609734434416.png
 
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Casey Jones

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#17
96 billion dollars of free food enough? more than half of americans pay negative or zero income tax - the rest of us are the suckers at the table
Bread and Circuses.

You're watching America come apart...literally cannibalize itself. And there is not a damn thing you, or I, can do to stop it.

We tried. We tried discussion; public education (local Tea Parties) and voting and campaigning. And it's all come to naught; and now the Elites have rendered elections and public opinion meaningless.

Nothing to do but enjoy the decline, as writer Aaron Clarey titled one of his books.

Or, as I say...yabbut, the coffee's good.
 

Treasure Searcher

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#21

vichris

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#22
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vichris

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#23
Its just the start. Time to stock up by buying items now. This country is going to find out the hard way, that Socialism is expensive.
"NOW"......This has been on the agenda for over a decade. But your right. I still have a couple of loose ends to tie up.
 

Casey Jones

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#27

Casey Jones

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#31
Obviously Drugman has forgotten how much FUN the double-digit inflation of the 1970s was. And what a drag it was to the entire economy - when no one dared lock himself into any large purchase, because he didn't know his budget for the next year, whether he'd get a raise to compensate - or a pink slip.

Let them learn. We have a lot of misery ahead of us...does Drugman remember THAT? The Misery Index.
 

TomD

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#34

nowon

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#35
I'm in that business too and have lost count of the number of those notices I've seen in the past couple of years.

The wife and I have several cats around the house. Was at Wallymart the other day looking at bagged cat food going WTF!?? There has been a 30%+ increase in most of it over the past year.
At some point one starts looking at food like an investment, with a guaranteed return equal to at least the inflation....
 

BarnacleBob

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#36
At some point one starts looking at food like an investment, with a guaranteed return equal to at least the inflation....
It was said during the great depression that one or two .22lr rounds would buy lunch at the local restaurant... looks like the same condition is manifesting again... instead of .22lr, it will be .38, 9mm, .45, 5.56, 7.62's etc...
 

EO 11110

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#37
frbny buying 120 billion in bonds every month - but not buying from treasury direct, buying from secondary market

dc vipers spending money like madmen - treasury dept bond printers on fire

frbny buying the dc bonds and forcing interest rate down to 1ish percent on the bonds with the massive buying binge

working together, they are putting unprecedented spending power in the hands of the dc politicians. something past pols could only fantasize about

https://www.cnbc.com/2020/12/16/fed...the-economy-gets-back-to-full-employment.html

  • Following its two-day meeting, the Federal Reserve committed to continue buying bonds until the economy reaches full employment and inflation stays at 2%

  • The Fed also voted, as expected, to hold short-term borrowing rates near zero.

  • While the pace of at least $120 billion a month in purchases will continue, the Fed did not, as some investors were expecting, extend the duration of the bonds.
=====================================================

https://www.newyorkfed.org/markets/...ities/treasury-securities-operational-details

Treasury Securities Operational Details

The New York Fed purchases Treasury securities as directed by the Federal Open Market Committee (FOMC). These purchases are conducted in the secondary market for Treasury securities.