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; so anyway, all new money is created from the fractoinal reserve system yeh? we agree on that? so its created ...

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Old Feb 23, 2010, 12:34am   #473
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

so anyway, all new money is created from the fractoinal reserve system yeh? we agree on that? so its created as loans yes? but you all money isnt debt? well im afraid it is...and you will just have to live with it!
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Old Feb 23, 2010, 12:35am   #474
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Quote:
Originally Posted by Atilla View Post
We'll have to agre to mutually disagree. Good evening with what's left of it...
agree to mutualy disagree than your contradicting yourself with in a few posts and then asking me to show you were you said it? LOL classic...

i do beleive thats 2-0 to me...want to go again?
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Bullsh!t, Bearsh!t all smells the same to me!

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Old Feb 23, 2010, 12:38am   #475
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

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Originally Posted by N Rothschild View Post
i suggest you all read this. http://upload.wikimedia.org/wikipedi..._Mechanics.pdf so you know how money really works.

When you consider that all money is debt, the interest to be paid on this debt does not actually exist. The amount of money in the money supply will always be less than the total debt+interest. The only way this interest can be paid, is the by constant creation of new debt(credit) in order to service the already existing debt. (like someone withdrawing cash from there credit card in order to pay the same credit card). The other way is through bankruptcy.

When the money supply and amount of debt gets to much, the system crashes (credit crunch) and causes a recession. When the system crashes, it means no new debt is being taken on by the economy in order to service the existing debt. Hence contraction in GDP and consumer credit as money is leached from the money supply in order to service the interest on all the debt in the system (remember there is not enough money without the creation of more debt to pay this interest)

When the system crashes like this, the fed steps in and lowers the federal funds rate meaning money is cheap to borrow in order to stimulate the process of creating new credit to prop up the system. the system NEEDS this money so it doesn't completely implode. The level of money being pumped into the economy which many refer to as printing the money etc (which is a joke as all debt in the system is created out of thin air which you will know if you have any clue about the fractional reserve banking system, see the link) by the fed is a TINY amount of money compared to the levels of money created normally within the system. This is quantitative easing, the attempt to stop the system from exploding..proving emergency funds to keep the cycle going. The idea that the fed's efforts could cause hyperinflation is laughable as its entire purpose is to try (and fail) at stopping a massive bone crushing deflationary cycle. Which is actually unavoidable in the banking system UNLESS the cycle of credit creation continues.

How ever this cycle is not continuing. This recession wasn't just the housing market bubble bursting. it was the fiat currency cycle bubble bursting. (see many of George soros books) It was the end of the super cycle. Banks are not lending, people are not borrowing..this is indisputable. Banks are hording cash and not lending all the toxic **** derivatives they are hiding on there books. People are no longer borrowing, they borrowed to much..and have perhaps learnt there lesson (for now, will be soon forgotten) the record contraction in consumer credit shows this nicely.

"Consumer credit decreased at an annual rate of 4-3/4 percent in the fourth quarter of 2009. Revolving credit decreased at an annual rate
of 13 percent, and nonrevolving credit was unchanged on net." Fed

http://www.federalreserve.gov/releases/g19/Current/ (pretty easy to see for yourself what has happend in consumer credit since the recession) And dont remember a huge part of the economy is the consumer..but the consumer has no money as it isnt borrowing any? hmm interesting.

So banks arnt lending, people arnt borrowing it anyway. So what does that mean? It means no new credit, no new credit to pay the interest on the outstanding debt in the system..while the fed desperately tries to make the titanic water tight with some duck tape.

This means that the longer the cycle is broken, the more and more money is leached from the system as world de-leverages from this orgry of debt. (DEFLATION). Deflation is a dirty word in economics, hence few people talk about it. Banking, governments, economists LOVE inflation. but its all a lie. It is just not possible while the cycle is broken. You will struggle to find this sort of explanation and theory in your newspapers as it goes agasint the "machine" and is the true nightmare scenario that people don't want to admit to. "deny till you die"

I seriously suggest reading the pdf along with this post.

I hope this helps some people who have been struggling to understand. If anyone comes back and says what i have written is wrong and we are about to see hyperinflation. You are an idiot.
here is my post again for anyone interested to read it and may appreciate it and wants to ignore attilla making a tool of himself for the last few pages.
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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader
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Old Feb 24, 2010, 12:51am   #476
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Quote:
Originally Posted by N Rothschild View Post
agree to mutualy disagree than your contradicting yourself with in a few posts and then asking me to show you were you said it? LOL classic...

i do beleive thats 2-0 to me...want to go again?
Ok let's take it down to basics.

Assume money - as a unit of measure of value has not been invented, conceived etc.

We live in a barter economy.

We have two farmers a sheep and chicken farmer.

By mutual negotiation they reach the agreement 1 sheep is worth 10 chickens. 10 Chickens are worth 1 sheep.

They both get tired of eating the same type of meat and decide to exchange some of their produce.

On their travels from home they come upon a man who catches fish. Winding fast forward they reach the agreement between three of them that;

1 sheep is worth 10 chickens
1 chicken is worth 10 fish
1 sheep is worth 100 fish

They all decide to exchange some of their produce and so they get to have variety in their diet and feel all the more healthy for it.

Now one day they strike upon the concept of measuring value by using a unit of currency called money which they all agree to accept. Each unit of currency is worth one fish which is the lowest common denominator.

Thus;

1 sheep is worth 100 units of money
1 chicken is worth 10 units of money
1 fish is worth 1 unit of money.

Now we have money as unit of exchange for purchasing goods trade is much faciliated by simplicity of division, carriage and rest of it etc etc...

Now without referring to any links or other material but your pure grey cells...

Explain how you come about the assumption "When you consider that all money is debt"?

Money is simply a unit of measure of value.
Money is a commodity and it too has value.
Fiat money also has value.

Where is the debt; in the fish, chicken or sheep?

To say "the interest to be paid on this debt does not actually exist" depends on your assumptions.

Who would disagree with the phrase - time is money? Time is also a commodity you can trade. Yes you can buy time!

Interest is cost of money over a period of time.


You capiche???
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Old Feb 24, 2010, 1:52am   #477
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

mate there is nothing to capiche. ALL MONEY IS DEBT. this cant be desputed by talking about fish and eggs.

ALL MONEY is created threw the fractional reserve system, as credit/debt, end of. every single unit of currencey in the system was created threw the frac reserve system as credit/debt. this isnt even up for debate..just coz u cant understand it or dont want to accept it is not my problem lol

there is more debt in the world than there is money, how can you not understand this?
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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader

Last edited by N Rothschild; Feb 24, 2010 at 1:59am.
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Old Feb 24, 2010, 2:07am   #478
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

the fact your comparing our monetary system to a system of barter of fresh produce just hows how little understanding you really have..


this statement alone completely voids your entire post. "fiat money's value is unrelated to any physical quantity"

maybe you should start back at the basics? http://en.wikipedia.org/wiki/Fiat_money
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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader

Last edited by N Rothschild; Feb 24, 2010 at 2:15am.
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Old Feb 24, 2010, 2:30am   #479
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

attilla have you ever read a US dollar bill? Here is a pic, what does it say?

again this is all in the pdf i first posted which you couldnt be bothered to read cause you though you understood it all (which you clearly dont)

are the actually words on that bill proof enough for u yet that u are wrong lol
Attached Thumbnails
debt.jpg  
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"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild

Bullsh!t, Bearsh!t all smells the same to me!

"It is not cheap to develop automated systems , mine already cost over $1m. " oildaytrader
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Old Feb 24, 2010, 2:52am   #480
 
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Re: Could the Weimar Hyperinflation Happen Again in America?

Actually, the "Federal Reserve Note" part says it all. A bank note is certificate issued against the reserves of the bank issuing the note.
In this case, if you present a dollar to the Fed, all that will happen is that they'll give you back a buck. Well, after the teller titters, I suppose.
Way back when you could ask for the equivalent in gold or silver.
I read that Money Mechanics pdf, the real fun starts on page 24 of that one. They kind of sort of admit they'll issue as much money as the banking system demands, but you kind of have to read between the lines. Steve Keen was more straightforward, but then he's not trying to make himself more important than he really is; he's just trying to tell it like it is.
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