Five Things You Need to Know: Deflation... And the Headstones Climbed Up the Hills
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Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street:
1. Deflation... And the Headstones Climbed Up the Hills
2. The Ben Bernanke "Helicopter"
3. The Liquidity Trap
4. The New American Saver
5. One Last Thing
Deflation... And the Headstones Climbed Up the Hills
"Policy makers navigating the U.S. through the global credit crisis may have a new concern on the horizon for 2009: deflation."
- Wall Street Journal, "Amid Pressing Problems, Threat of Deflation Looms," Oct. 18, 2008
"Britain faces deflation for first time since 1960."
- Telegraph, Oct. 17, 2008
"U.S. Federal Reserve Chairman Ben Bernanke on Monday threw his support behind a second round of fiscal stimulus by the government to limit the risk of a "protracted" slowdown in the economy."
- Wall Street Journal, "Bernanke Signals Support for Second Stimulus," Oct. 20, 2008
"And I dreamt of a house
Haunted by all you tweakers with your hands out
And the headstones climbed up the hills
And the headstones climbed up the hills"
- The Mountain Goats, "Palmcorder Yanja"
And the headstones climbed up the hills. Indeed. While a trillion dollars may be just enough to raise the rotting corpses of a handful of banks and send their headstones marching up the hills, the rest of America is going to have to lie quietly "in state," as it were, and wait for congress to dole out another round of "Economic Stimulus"... or "Ec-Stim" as it's known in the trade.
If Congress can rush another round of checks through before the election, or at least distract us with a gaudy show of trying, some incumbent seats will no doubt be saved from voter wrath. But Ec-Stim is political gibberish, of course, and amounts to little more than a second multi-billion dollar bailout... of the online porn industry. That is a fact.
According to AIMRCo, the Adult Internet Market Research Co., the online porn industry reported 20-30% growth in membership rates this summer following the initial round of Ec-Stim checks in mid-May. That's normally the slowest time of the year for online porn, AIMRCo said, which is far more information than we need or want if you really think about it.
"Getting more people to buy porn was probably the last thing Bush had on his mind when he came up with his 'stimulus package,' but we'll take it," Jillian Fox of LSGmodels told United Press International in July.
Oh, I wouldn't be so sure about that, Jillian.
"Go F%&k Yourself."
- Dick Cheney, Vice President of the United States of America
Political dynasties, and those in charge of running them, have a long, cruel history of secretly engineering public orgiastic frenzies to soothe the masses. Virtually all German porn that is considered illegal in the U.S. originated during the Carolingian dynasty. And to this day there are certain places in Bangkok where simply uttering the name Charles "The Hammer" Martel is enough to earn you a life sentence in prison.
No, Jillian, these people are professionals. And they understand that while you can buy more real estate in a day than you can sell in a lifetime, it is possible to consume more porn in an hour than can be produced in a quarter of a century. Yes, that should keep them busy for a while.
Good lord, how did we collapse to this dark and ugly, Cheney-esque level in less than 250 words? Ah, yes, deflation... a broad-based decline in prices across the economy. All it takes is widespread asset price deflation to get the bread & circuses committee ramped up.
Meanwhile, the headstones climb up the hills.
The Ben Bernanke "Helicopter"
Federal Reserve Chairman Ben Bernanke, has long been known by the weird nickname, "Helicopter Ben." But where did this strange nickname come from, and what does it really mean?
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Now that the Reaganesque trickle-down theory of economics has been discredited, we can try the Online Porn trickle-down theory, in which additional stimulus produces more porn viewing, which puts more money in the hands of porn actresses, which they in turn spend on cocaine, plastic surgery, and so on. This has the added benefit of concentrating dollars in Las Vegas and Los Angeles, two of the cities where housing prices need to see a stiffening of demand.
All that is needed is to describe exactly what is trickling down, and where. But since Minyanville is a family oriented site I shall leave that to your fervid imaginings.
And don't talk about velocity of money, Friedman didn't think it was variable enough to make much difference.
It also happens that inflation is a very convenient way, politically, to get out of debt (because you pay back in cheaper money). Those poor Chinese and Middle Easterners didn't realize what tricks we had up our sleeves.
Are Friedman and Keynes totally discredited now? If not, how come everyone is talking deflation, and why aren't T-bonds sinking like the proverbial stones? Am I just too early with this?
Supply and demand plays a role in this. We're a little short on demand, so what will drive prices up? On the other hand through our infinite supply side wisdom we keep feeding supply. I wonder how that will work out?
Unfortunately our economic memories begin and end with Reagan and so our chances of learning from histories that we have already rewritten to suit Austrian economics is slim. Well, until we have no other choice.
But if the act of using public funds to buy private assets was the death spiral of capitalism wouldn't the U.S. capitalism have collapsed with the RTC in the 90's. It did not so i have to believe this too will pass.
when all those sub-prime mortgages go poof, what do you think happens??
Does it increase our money supply???
or
Does it DECREASE our money supply????
Remember it took CASH to fund those loans.
Oh, I thought it was more complex????
Dah
Narcissistic Personality Disorder (NPD) is exactly what I want, or need, or have, or had, I think.
But Kevin can't have NPD because what true blue Narcissistic Persoanality Disorder sufferer could actually make fun of himself? Isn't the act of poking fun at oneself the opposite of NPD?
This is all very confusing. I guess I'll perscribe myself another day of reading Kevin Depew and call myself in the morning to see how I'm doing.
After all, I always say "Why ask anyone else when I'm the expert on myself?"
Minyan Michael
Changes in asset levels do not result in money supply changes. When someone buys an asset, someone else gets the money. It's a zero-sum game. Just because the asset price subsequently goes down doesn't mean the person who received the money no longer has it!
Try the veal, folks, I'll be here all week.
Oh, and because the Mogambo is probably locked in his bunker drueling over porn.
Guess what, monkey-but.? We AREN'T making more, but the money is being devalued anyway.
No, it didn't take CASH to fund those mortgages. It was all promises and chains around people's necks. No cash necessary. The chain/promise IS the cash. When the chains get too heavy to swim with, nobody reaches the other side of the deal (paid loans).
The proof that people are worthless to the System is when the System doesn't build any boats to get the chains across the river to the future. Inflating money is the same as devaluing the hours you work. We've reached the point where working doesn't pay people enough to get to work, and there aren't enough resources to create enough jobs to demand that they go at higher wages.
The System of systems will have to start piling up a lot more headstones before populations fall enough to remedy the disconnect.
Either that, or we will have to come up with a different system.
When I put on my tinfoil hat, I think someone's already got one in mind and that's why they are so eager to burn this one out with amphetamine bailouts.
Is my hoard of K-rands gonna save my butt, financially?
Huh?
