Could the Weimar Hyperinflation Happen Again in America?

This is a discussion on Could the Weimar Hyperinflation Happen Again in America? within the Economic & Fundamental Analysis forums, part of the Methods category; Originally Posted by Paca Hi Atilla, I am not sure I have clouded debt-inflation. What I am saying is that ...

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Old Sep 19, 2009, 10:15pm   #261
 
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Originally Posted by Paca View Post
Hi Atilla,

I am not sure I have clouded debt-inflation.
What I am saying is that because of any foreseen growth in demand, the result in disinflation term should hopefully offset (at least part of) the debt-inflation pressures.

And the FED can also ask banks to increase the level of reserve to officially deal with risks. I think first somebody has to ask the Fed to ask the banks. As the Fed is a law onto it self there is more chance of finding life on Mars...

I totally agree to say that having a growing debt is not good. Who could be silly enough to be against ? Bush and his Republican cronies asking for tax breaks especially for oil companies...

Where I disagree is on the consequences of the actual US debt.
I do not know what will happen. But I can"t stand whith any of the apocalyptic vision shared by many of us. Tear downs usually 1/3 of build up. US empire built over the last 150 years thus I give the US 50 years before it is on par with the 2nd & maybe 3rd world. That is ofcourse if it doesn't change its ways and stop relying on its military strength and concentrate on becoming an economic power again.

For info. : My statement saying that foreign demand for US debt is still strong is coming from the last TIC results where it was stated that long term debt demand is increasing while security assets demand is declining. I'm not sure what this TIC report or results is about but without interest rates rising in the US or UK no body will be buying government bonds at these price/rates with hyperinflation around the corner.

If anyone chooses to believe otherwise I would like to challenge you and state you are delusional. That is my very strong honest opinion.


The US economy is not in good shape. But the situation has improved after the possibility of a total collapse as thought after the Lehman story.
The panic can be acccounted for a big part of the following drop seen on the Markets.

Some analysts think Stock Markets are allowed to be that high just because if you remove the panic effect from the Stock Market, then you ve got the crisis trough in october (instead of march) and at 840 for the S&P500 (instead of 666). Then the Market recovery is not that big.

Ok that is speculation, but it works even with an average PER (S&P500) of about 19.3

But globally we are thinking the same : Money supply have to be watched out very carefully (and addressed as soon as a real recovery will take place)

Forgive my cheeky points but such are my views.
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Old Sep 19, 2009, 11:05pm   #262
 
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Atilla,

No problem. You can obviously think what you want...even if there was a serious lack of tangible elements in your last post
May I keep my own thoughts or do you think I am obliged to share your views ?
RGDS
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Old Sep 19, 2009, 11:16pm   #263
 
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Poborsky,

I got it initially right...we are also talking about the US in this thread.
Technically the thread was about the US, but a lot of what goes for the US goes also for the UK. In fact, the UK is probably in a lot worse shape than the US. The UK does not have the USA's residual manufacturing base, experience of commercially successful innovation (we are good at white elephants like hovercraft and Concorde), vast R&D resources, and vast natural resources to help it out of recovery. Through neglect and in some cases deliberate destruction we have lost what we had beyond hope of recovery. We are fighting unpopular unwinnable wars that we cannot afford, maintaining nuclear weapons that we could not afford in the first place and certainly cannot afford to renew, weapons that we will never use. None of the 3 main political parties here has a clue how to get us out of this mess and the next election will be about as relevant to recovery as the Eurovision Song Contest and a lot less fun.
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Old Sep 19, 2009, 11:50pm   #264
 
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Thanks, Montmorency

I am just interested with the US. I can't make any comparison with the UK, as I am a French trader (nobody's perfect ), dealing with US futures from the French Riviera .

Your view of the UK situation (and hopes for the future) looks very pessimistic.
Is that your own perception or is it shared by a vast majority ?

I 've got a very big respect for British people as I think you have one of the powerfull quality to deal with difficult situations : adaptability.

Take care
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Old Sep 20, 2009, 12:40am   #265
 
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Quote:
Originally Posted by Paca View Post
Atilla,

No problem. You can obviously think what you want...even if there was a serious lack of tangible elements in your last post
May I keep my own thoughts or do you think I am obliged to share your views ?
RGDS
That is a rhetorical question I need not answer. You can surely decide for your self...


Regarding the serious lack of tangible elements...

1. The Fed is a law onto it self there is more chance of finding life on Mars...
2. Bush and his Republican cronies gave and continued asking for tax breaks especially for oil companies...
3. Tear downs usually 1/3 of build up.
4. US empire built over the last 150 years. (The prediction for the wind down in 50 years for the empire is subject to it continuing with the printing presses and fighting wars to defend its empire with military might)
5. Without interest rates rising in the US or UK no body will be buying government bonds at these price/rates with hyperinflation around the corner.

Which one of these facts do you disagree with?
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Old Sep 20, 2009, 12:47am   #266
 
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Thanks, Montmorency

I am just interested with the US. I can't make any comparison with the UK, as I am a French trader (nobody's perfect ), dealing with US futures from the French Riviera .
Yes, we think we are important, but don't seem to realise that most of the world just ignores us :-)
Quote:
Your view of the UK situation (and hopes for the future) looks very pessimistic.
Is that your own perception or is it shared by a vast majority ?
I don't know for sure of course, but from the media, etc, I think the mood is pretty grim at the moment. My son is sick of the place and just wants to get out.
Quote:
I 've got a very big respect for British people as I think you have one of the powerfull quality to deal with difficult situations : adaptability.
Thanks :-) And this is true actually. We "muddle through". We've had plenty of practice (thanks to not preparing properly in the first place :-) ).
My point about innovation, for example....I was a bit overdoing the black picture there. We can be innovative, but we are not very good at making commercial successes. Take the original mini car. Great little car (for its day). Never made a penny for BMC (and look what happened to BMC later). We used to have a successful motorcycle industry, but we allowed the Japanese to run rings around us. We have wasted our natural gas and oil reserves and now depend for supplies on a former enemy (Russia). We have let our energy companies fall in to the hands of competitor nations. Our supposed remaining asset was the world of banking and finance centred around London, and we all know what's been happening there.

Yes, there are still some successful engineering and manufacturing firms around who have found niches and are surviving somehow, but hardly enough to help kickstart a recovery. Governments (of either party) over the last 20 years or so seemed to take no interest in technology and manufacturing industry. It seemed as though the future lay in the service "industries" especially finance.
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Take care
Merci. Au revoir!
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Old Sep 20, 2009, 1:25am   #267
 
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Atilla,

Ok, you surely like to play with others. I do not want to enter that sort of lose/lose game. Because it is a waste of time.

I will just give my sentiment for the first 2 points. Don't take it personally, please, as I am joking.

1) You put together two totally different ideas.
The first one is related to the power of the FEd and its relationship with other Govt bodies and lobbies...but you do not give any detail explaining what the FED wil or will not do to deal with the situation. I am sure you are a great FED insider, and I delect myself in advance to what I will learn from you. For sure, it could be named "In bed with Bernanke".
The second is related to life on Mars. Ok, if we find martian, we will ask them if there is one who has slept with Bernanke.

2) Have you noticed that Bush has been replaced by a guy named... ?
Bush has been elected with the help of the defense industry (and Obama with that of the finance)
Then, what relevance has your sentence with the actual situation ?

...

RGDS
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Old Sep 20, 2009, 1:39am   #268
 
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Originally Posted by Paca View Post
Atilla,

Ok, you surely like to play with others. I do not want to enter that sort of lose/lose game. Because it is a waste of time.

I will just give my sentiment for the first 2 points. Don't take it personally, please, as I am joking.

1) You put together two totally different ideas.
The first one is related to the power of the FEd and its relationship with other Govt bodies and lobbies...but you do not give any detail explaining what the FED wil or will not do to deal with the situation. I am sure you are a great FED insider, and I delect myself in advance to what I will learn from you. For sure, it could be named "In bed with Bernanke".
The second is related to life on Mars. Ok, if we find martian, we will ask them if there is one who has slept with Bernanke.

2) Have you noticed that Bush has been replaced by a guy named... ?
Bush has been elected with the help of the defense industry (and Obama with that of the finance)
Then, what relevance has your sentence with the actual situation ?

...

RGDS
No offence taken and none intended.

The Fed is not accountable to anyone. Not the Senate, the president or any other force or government body. In fact I don't know to be honest. What I do find strange is that the worlds super power can pass $800bn with no accountabiilty as to how that money is spent is my point.

Basically, Fed will not tell banks to increase their reserve rates. The Senate can not tell the Fed what to do.

I think it was more of a neo-con thing with Bush and Dick Chaney was running the show - big pal of Bush senior the ex-CIA man. I mean Haliburton made most money from the war in Iraq and no doubt still continues to.

After the grissly mess left behind by the republicans what better man to give it to but one who carries the names Husseyin and Obama and happens to be coloured who's daddy was a muslim too I think. If one wrote a novel of fiction this would be a daring plot to contrive. However, I'm not sure he was selected by the finance industry. No doubt the fact that he nodded to the $800bn stimulus package would have helped.

At an acedemic level of interest I'm in a profound way honoured to be living these most interesting of times.

I'll be interested in the outcomes in the next 10-20 years when I'm sure we'll all be considerably wiser than we are today.

Man lives in hope...
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2. 80% of what happens to you can be attributed to 20% of your behaviour

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Old Sep 20, 2009, 2:06am   #269
 
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Atilla,

You will get more information on how the 787M$ stimulus wil be spent through years at this address :
Recovery.gov

In its mandate (money supply role), the Fed has (actually) the power to raise reserve that banks hold in the federal reserve.

But there is also the political reality.
The Fed is normally independent. But it has to testify on its politics to the congress and senate.

On the govt side, we all know the influence of Goldman Sachs.
Obama knows it himself. This is why he is trying to give the FED a new authority toward future control of systemic risks (ie : controlling the too big to fail banks)...which is much more important than controlling bonuses.
The congress is preferring to give that authority to a kind of economic council (to be created).
Certainly, the huge lobbyist power has something to do with that decision.

Anyway, if the FED, is invested with that authority (depending on Obama's ability to convince the congress), it will be easier to deal with money supply.

I totally agree with you, I am also very happy to live these events.
But what I have learnt from past history is that companies have always found ways to bypass regulations put in place after crisis. Profit is driving companies, not common sense.

Then I am not sure we will be wiser in 10-20 years.

But you are right, we can hope for.

Last edited by Paca; Sep 20, 2009 at 2:23am. Reason: mispellings
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Old Sep 20, 2009, 9:05am   #270
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