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hyper inflation in the USA?
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<blockquote data-quote="John Roberts" data-source="post: 23887" data-attributes="member: 126"><p>Re: hyper inflation in the USA?</p><p></p><p>First, thank you very much for actually responding on topic... It seems the difficulty in treating people with mutual respect spills over into these forums. I hope we don't wear out our welcome and can still have adult conversations here. This is not about belittling each other, or proving each other wrong, but actually listening to each other. </p><p></p><p>OK back on topic</p><p></p><p>We still have balance of trade issues and the dollar is not operating completely in a vacuum. While the yuan exchange rate is also important, I suspect our quantitative easing significant, but there is also a fear premium that props up the dollar in the face of international uncertainty, like now. The near future expectation is for reduced QE (soon) and rising interest rates (perhaps as soon as later this year). These will both strengthen the USD. Several western countries have already raised interested rates since the credit collapse, so we are behind which affects relative strength. </p><p></p><p>QE has always been presented as a temporary strategy, just until inflation clearly takes hold and risk of a deflationary spiral has passed. The fed has a long track record of being too slow to remove stimulus that has arguably led to several past bubbles. Some of the fed governors are already opposed to prolonging the current QE. I don't see all the data they do, but my sense is we should start unwinding the stimulus, despite our 9% unemployment and a housing market that hasn't solidly bottomed yet. </p><p></p><p>Do I believe this will happen before 2012 elections, not likely... so we could be looking at another bubble. </p><p></p><p>I am disappointed. </p><p></p><p>The TARP program was supposed to purchase distressed assets to create a market and price discovery for these instruments that weren't trading and locking up the credit markets. Instead the TARP program became a slush fund to rescue companies that probably should have been allowed to fail. Instead they were encourage to buy each other, leaving us with fewer, larger, organizations, beholding to the government, and now even larger than the previous too-large-to-fail. </p><p></p><p>The "rescue" of GM and Chrysler is likewise subject to criticism. Again the administration picked winners and losers among the involved parties. The real losers were the larger car industry and taxpayers. If GM was allowed to fail without manipulating the outcome, the productive assets would have been purchased and put back into service. The only thing that happened is the losing recipe was perpetuated, to fail again. This is already the second time for Chrysler. </p><p></p><p>Which country are you talking about? US in nominally 9% or so, while there are many who have dropped out of the race. </p><p></p><p>agreed... but there is also some question about measuring (core) inflation ex-energy and food prices. Energy and food expenses are real and felt by consumers. The still deflating housing market is a significant downward drag on prices, while we hope that will bottom soon. </p><p></p><p> </p><p>I am backing away from the veer... perhaps that could be reposted as new topic, if it seems productive to discuss it further. I think I understand how Marjan feels by now. </p><p></p><p>JR</p></blockquote><p></p>
[QUOTE="John Roberts, post: 23887, member: 126"] Re: hyper inflation in the USA? First, thank you very much for actually responding on topic... It seems the difficulty in treating people with mutual respect spills over into these forums. I hope we don't wear out our welcome and can still have adult conversations here. This is not about belittling each other, or proving each other wrong, but actually listening to each other. OK back on topic We still have balance of trade issues and the dollar is not operating completely in a vacuum. While the yuan exchange rate is also important, I suspect our quantitative easing significant, but there is also a fear premium that props up the dollar in the face of international uncertainty, like now. The near future expectation is for reduced QE (soon) and rising interest rates (perhaps as soon as later this year). These will both strengthen the USD. Several western countries have already raised interested rates since the credit collapse, so we are behind which affects relative strength. QE has always been presented as a temporary strategy, just until inflation clearly takes hold and risk of a deflationary spiral has passed. The fed has a long track record of being too slow to remove stimulus that has arguably led to several past bubbles. Some of the fed governors are already opposed to prolonging the current QE. I don't see all the data they do, but my sense is we should start unwinding the stimulus, despite our 9% unemployment and a housing market that hasn't solidly bottomed yet. Do I believe this will happen before 2012 elections, not likely... so we could be looking at another bubble. I am disappointed. The TARP program was supposed to purchase distressed assets to create a market and price discovery for these instruments that weren't trading and locking up the credit markets. Instead the TARP program became a slush fund to rescue companies that probably should have been allowed to fail. Instead they were encourage to buy each other, leaving us with fewer, larger, organizations, beholding to the government, and now even larger than the previous too-large-to-fail. The "rescue" of GM and Chrysler is likewise subject to criticism. Again the administration picked winners and losers among the involved parties. The real losers were the larger car industry and taxpayers. If GM was allowed to fail without manipulating the outcome, the productive assets would have been purchased and put back into service. The only thing that happened is the losing recipe was perpetuated, to fail again. This is already the second time for Chrysler. Which country are you talking about? US in nominally 9% or so, while there are many who have dropped out of the race. agreed... but there is also some question about measuring (core) inflation ex-energy and food prices. Energy and food expenses are real and felt by consumers. The still deflating housing market is a significant downward drag on prices, while we hope that will bottom soon. I am backing away from the veer... perhaps that could be reposted as new topic, if it seems productive to discuss it further. I think I understand how Marjan feels by now. JR [/QUOTE]
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