Wednesday, April 15, 2020

deflating fears


DEFLATING FEARS
A lot of people think we are going to see deflation. I am not one. And not because I am an expert in economics ( there are actually no experts in economics, just as there are no expert weather forecasters. But, apparently, plenty of experts who know exactly what the weather will be like in fifty years. These same people are probably the same ones who know the Beer Virus will see piles of bodies littering the streets. Because they only have your best interests at heart ). I simply ask myself, self, you stud muffin, what could possibly go wrong? Because it will.
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Deflation? That is what we had when we were wallowing in an ocean of surplus, at the beginning of the Coal Age, and then half way through the growth phase of the Oil Age. There were too many goods for sale, with a fixed money supply ( I'll ignore the FDR gold confiscation and subsequent currency inflation-which didn't work anyway ). Do we have resource surplus right now? Do we have a fixed supply of money? Now, call me a feces flinging monkey performing in a classroom with Einstein and friends, but no, no we are not. So I cannot see how we think deflation is possible.
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Well, Jim, you see ( in a tone used for a retarded child on medication withdrawal ), everyone is losing their job, won't have money and so prices will decrease without demand. In a perfectly rebounded system, sure. But did you forget the three things we can buy are all in short supply? Shelter. The government will bail out this sector, because the banks own most rental property. Meaning without the danger of eviction, renters ruin the dwellings, and the shelters go off the market due to damage and neglect. Lower supply, higher prices.
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Next up, everything else that repairs and replaces all infrastructure. Which CAME from China. Past tense. If it isn't Beer Virus, the excuse will be trade war, or cargo ship companies going out of business ( or dollar inflation ). Lower supply of parts and machines, higher prices. I don't think hardly anyone is factoring in everything from dam control parts to diesel locomotive parts being unavailable and that impart of constant failure shrinking our options every day. And then of course, food. Which cannot be restocked even as many folks stay home in isolation, AFTER they stocked up.
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Ford just suspended all vehicle assembly in North America ( note I didn't say America. That includes Mexico, which was the de facto new Detroit ). And their parts aren't coming from China, which means all you Happy Motoring sunsabitches cannot easily fix the crap boxes you already have. Now, please tell me how that is deflationary. I'm waiting. Those low gasoline prices? That is the sound of the fracking oil industry dying. Expect much higher gasoline prices after 6 million barrels a day are off line. Which brings us to imported oil.
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Oh, no problem, Saudi Arabia loves us. Russia loves us. They have excess capacity and will sell to us. Will they? Will they, REALLY? Need I remind you of the PetroDollar? That was forty years of the US inflating our dollar, as only dollars bought oil. Do you think anyone else besides Americans appreciated that system? JUST in the US, the last decade saw 10% inflation every year in most important prices such as rent and autos, college ( for our coneheads ) and medical care. It hurt, didn't it? The rest of the world was always taking that hit, inflation wise.
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When inflation is 10%, and your Treasury Bond ( the instrument used in oil sales ) pays 2%, that is an eight percent loss every year. Every country ever paying that Imperial Vig would be more than happy to do without that penalty. Now, what if that number went from 8% to 18%, or 28%? The known current Banker Bailout is $10 trillion. That is on top of our $20 trillion debt, on top of the Fed's foreign central bank bail-out, on top of the “Repo” scam. You don't think that will be, even slightly, inflationary? If in Trumps words “the world's greatest economy” was running at 10% a year inflation, what happens NOW?
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Let us follow the bankers end game of ruining the economy to gain complete economic control. They extend this pretend pandemic ( yes, it kills people, mostly who were dying anyway. A Vegas man just died of Beer Virus. Or, more likely, did he die from being FRIGGIN 96 YEARS OLD!?!? Listen, I don't want to debate fatality rates. I just want to ask you one question. Do you believe the mainstream media and all the Hollywood celebrity propagandists? Because they assure us we are all going to die unless you lose your Deplorable job ) until the economy is in ruins. How much oil are we going to be burning? We were losing control of the PetroDollar BEFORE Beer Virus.
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When folks don't buy oil, for dollars, they aren't buying our debt. Inflation goes from foreign to local. And if you think foreigners are rushing into the safety of dollars, you are ignoring the Federal Reserve Banks manipulations. A country without any manufacturing, with increasing inflation, with growing social unrest, THAT is going to be a currency all rush into? The dollar has been coasting on past achievements for some time. Remember, “dollars” are really only “oil”. Once that changes, the dollar is Dingus.
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Have you noticed Amazon prices? Gun prices? Ammo prices? Food prices? ALREADY they are increasing. During that 16 million new unemployed period. Just the current evidence says no deflation. Because retail stores are closing, just that killed a lot of supply. Amazon has new customers, and less Chinese supplies, and their prices are going up ( you know, to pay for protecting the warehouse workers ). Supply is shrinking faster than the saving or credit of those staying at home. THEN, after that, then all the bail-out money hits the system.
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And all this is assuming there is an economy to even see deflation or inflation. We are discussing the BEST case scenario. Compared to an actual collapse, even hyper-inflation looks good. So be careful. A lot worse could be coming.
( .Y. )
( today's related Amazon link click HERE )
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note: J.C., most generous PayPal donation-thanks much.
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note: please forgive my spurt of nerdness, but here is an article calling the upcoming "Dune" another Woke PC crapfest HERE 
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note: the BBBno17 is ready in PDF ( PEEv2, Four Food Storage ).  It is listed on my web site, and the direct link  is HERE.  No charge, as usual.  If you do want to buy it as a donation, it will be up soon at Amazon as a Kindle book ( I'll let you know )
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note: free for today books.  Damnation Alley meets John Wick HERE 
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27 comments:

  1. Right. There is still a larger percentage of essential workers and such add on required support workers still consuming things and it is on going. Things aren't just sitting in dormant warehouses, they are just slowed down and throttled back. People are putting food in their mouths with regularity, thuse the demand will always be there. The corporatist caste will still raise prices cause they are not going to personally eat any costs from charity public relations donations, employee ppe equipment costs, or disruptions and procedural changes to their rackets. You, we, the consumer or citizen prole will bear the costs, with the added icing on a cake of indignities heaped upon your existence by a nation state's edicts. Stay frosty in the new era.

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  2. Mike Maloney at goldsilver.com thinks we will have a brief deflation of some products, then hyperinflation of almost everything.

    I think it depends on the product or service. Deflation for things like widget spinners, plastic pink yard flamingos, prom dresses and other superfluous products.

    Hyperinflation for food!!!

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    1. But the widgets and flamingos aren't being shipped over. Unless a store is desperate to stay open until the next CEO bonus check, I don't see falling prices.

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  3. Lord Bison,

    "Ford just suspended all vehicle assembly in North America"
    Ford, Fiat, and Toyota will be halting most production for quite a while. We just had a EF3 tornado tear up our county. BorgWarner who makes the drive trains for them is GONE!!! Family and neighbors who have been on layoff for the past 3 weeks because of beer virus, will now be out of work for a lot longer. They were suppose to be starting the lines back up on 4/27. Not now!!!

    https://www.wyff4.com/article/tornado-confirmed-in-easley-area-by-national-weather-service/32131505

    This plant has been totally destroyed. As far as we are aware, there are no other back-ups to this plant.

    I'm guessing, God must have wanted Ford to not produce any more vehicles for awhile. :D

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    1. If I was God, I'd be pissed at Ford myself. Not sure what you folks in your county did to earn his wraith. Perhaps He doesn't like Happy Motoring. Hmmmm?

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  4. There is no way we have deflation without a massive die off in population. With the wuflu checks now hitting accounts, inflation will likely be the result, and soon.

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    1. I don't think everyone getting one extra paycheck will matter. Perhaps all the corporate money will make a difference.

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  5. Just a personal data point on inflation. Last November, daughter in law bought my wife and I a 40" smart tv from Wallly World, for our living room. We liked the TV so much, that I wanted to buy an identical one for the upstairs bedroom, but kept putting it off. Finally, when my wife last her job about 7-8 weeks ago because of the virus hysteria, I finally got off my butt and bought one. Last November, it cost daughter in law about $140. When I went to buy one recently, was shocked to find it was now about $180. That's about a $40 jump in less than 6 months.

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    1. And a year from now ( or less ), no TV's to be had. Got hard copy DVD's?

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  6. Ha! Money printer go brrrrr. I rolled my trash can out to the curb today, the only chore to do, and got paid 1200 dollars for it, Winning. it is just digital debt that is never squared by any book. Most .gov gibs to citizenry will just be burned up by basic consumables and existing mandatory expenses. Not much spent will be retail or hard goods, and it will vaporize and be gone in a month, with only a burp for effect. The Minionites will be competing for merit badges awarded for the mostest or grandest preps that were aquired on uncle sam's dime. Stay frostier.

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    1. My money printer broke!( or at least waiting on more toner. From China ) Sad Panda :(

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    2. As of Monday, April 13, 2020 our national debt was $24,231,749,942,167. That breaks down to a debt of $73,527. for each citizen of the US. But we all know not every citizen of the US pays taxes, which makes the debt per taxpayer $195,420.

      Enjoy those stimulus checks, you'll be paying for them the rest of your life.

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    3. The PetroDollar will end just as the Continental did. No worries, in the end you'll only lose as many dollars as you have in savings. And few of us have $195k. Not that the Empire will last all that much longer anyway

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  7. Not telling anything new to you James or most regular readers, but constant inflation (and in the end game: hyperinflation) is the best friend of the world's most indebted empire. Prestidigitizing trillions and trillions of new dollars fu**s creditors holding US debt. Collateral carnage are savers of dollars still believing the retirement story, and anyone who is not hedging against the confiscatory tax that is monetary inflation.

    So it is in their favor. It will definitely continue and conclude in parabolic ruination of most.

    Even at this chaotic stage, a concerted effort to aquire silver and gold as part of ones overall plan is a great idea.

    Also, saw that mainstream seed company Burpee is not taking any new orders at present time. Chicks sold out and unavailable in many areas. Hell, dried beans are still out at my local grocery.
    The no competition, easy days of food stockpiling are over.

    I think credit goes to Kunstler for coining the term "prestidigitize".
    Which by the way, I love the guy, but no, his new book is not worth buying at this point. I've got it loaned out to immediate family now, but when I get it back I'll mail it to Elko.

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    1. I think anyone advertising to pay $35 for silver and $2k for gold will find enough private buyers to find enough PM's. Cash in the paper for the metal. I think you will all be glad that you did. Appreciate the heads up on Kunstler. I have the money, but I might be better off buying other kinds of books. I'm looking at WarWolf ( title?? The peasants living through the Thirty Years War-Mt Guerrilla says it is great for unconventional war ideas ) and some substitutes for the LaFond book research. I was a bit disappointed on those. "They were White and slaves" is only $3 Kindle.

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  8. I was reading a popular survivalist/prepper forum. 3 or 4 months ago most threads were people bragging about how squared away they are. Or which fancy poodle shooter to buy next.
    Now the threads are about having to make one last run to get a plastic doo hickey that can't be lived without. One person was telling about how they ran out of bleach and flour. ( How can a prepper not have at least 6 months of bleach?) Hell one bottle of bleach last me over 6 months. Most of the so called preppers are clueless fucking morons.
    It was business as usual in town. I make a supply run for metal roofing panels, but I could of done without them. I didn't see any mask or crazy people. The old timers are still all sitting around at the co-op drinking coffee as if nothing was happening.
    I think this whole beer virus is being blown out of proportion. I think I'm more likely to get bit by a copperhead, tick fever, or butt burgled by a bear, in my area.

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    1. You're lucky. I have to worry about Bum Rape. The bear would be more gentle, and considerate after.

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  9. Hey Jim. I was looking at pictures of your Bpod. It looks like you used OSB for it? If so, how thick? 1/2”? I know that it would be best to use pressure treated, but that stuff costs a kings ransom. Besides, I’ll probably coat it with roofing tar, in addition to plastic sheeting. Since fire is a potential concern, I’ll probably put some tin sheeting over the top, and cover it with more earth that I had originally planned. This means that I’ll have to incorporate a few load bearing beams into the design. That corrugated tin Anderson shelter, would be the cats meow, but not likely something that I can pull off. Right now, plywood seems to make the most sense, and will be the easiest, and most cost friendly.

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    1. No Tim Taylor I, the only thing I can tell you is that it was the cheapest plywood they had. Although a few years later the cheapest they had ( at +50% in price ) seemed a lot flimsier and less weight. So perhaps that criteria has now changed. But I look at it this way. However many corners I had to cut, its done, its there, and I am lucky to have it.

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  10. Earth sheltered cont.

    My shelter will be much smaller than yours (Probably in the vicinity of L 8’x H 6’ x W 5’). It will need to fit into the back of a borrowed truck, and hauled to the site. But let’s say that I was already set up, and living out there permanently, and had a shed with tools, that also served as a temporary shelter. Well, then, I’d probably go with something such as the trench shelter linked below, and bigger in size. In its most basic form, even a poor person can build this for almost nothing. But if I built one, I’d shore up the sides with beams and tin sheeting (Optional, and if built right, unnecessary, but nice). If you search hard enough, there is information out there for doing things on the cheap.

    https://www.wildernessarena.com/food-water-shelter/shelter-natural-shelter/how-to-build-door-pole-covered-trench-shelter-protection-against-elements-natural-disasters-nuclear-attacks

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  11. I'm still a short-term deflationista. Long term? No. But the next year or so, especially in gasoline and housing? Sure. And beef. If they have to thin the cattle herds, that will drop historically. When I shopped at the (so far) worst of the empty-shelf land, I could still get beef, but just not hamburger. There were still $11 a pound ribeye.

    Long term? Yup. Hyper.

    John Wick meets Damnation Alley! Count me in!

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    1. The Damnation Alley book wasn't terrible. I read it a third through, which is better than most. But it quickly lost my interest after the President ( modeled after Orange Man Bad ) turned into a cardboard villain.

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  12. This SHOULD have been the masthead:"And not because I am an expert in economics".

    But you just had to go for *NINE* more paragraphs and about 2000 words rattling on about global economics. Look Jim, the petrodollar may be disliked by the buyers of oil but the exporters love it (well almost all of them). The dollar is THE most dependable and stable store of wealth in the history of the entire world. Do you think the Saudis want to get a boatload of Albanian lek (nat'l currency) in return for upteen thousands of bbls of oil? What the F are they going to buy with a trunkful of lek?
    Same with Vietnamese dong...do you think Iraq wants a butt load of dong in return for sweet oil? C'mon, seriously. Drop the dong and pick up a dollar.
    Besides, the Saudis love us. Those royalty fuckers know the USA is their bolt hole and the 82nd Airborne is their praetorian guard unit.
    There is more shit than just oil buried under the sand of central Saudi Arabia but I won't divulge that....use your imagination.

    Noticing increasing prices of firearms, boolits & food?...well duh, every unprepared azz and his cousin all decided at once to clear the shelves during recent panic. It wasn't inflation that increased those prices but rather the reality that most of world hasn't followed your splendid writings all these many years. They should've already been gunned up.

    As I mentioned a month ago, I'll be buying lots of recent last minute purchases from those azzhats come September once their credit card is 3 months in arrears and they need to raise cash....think nearly new in box "unpapered" firearms.

    Your fixation on brick/mortar retail stores closing leads me to wonder if what is really bothering you is the loss of a past time of hanging out near women's lingeré department at JC Penney. All those frilly undergarments, oh so near....Be honest, do you miss being able to "accidently" brush up against something satiny on the rack? Lol!

    Lastly, inflation versus deflation...go long inflation.

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    1. The British Pound used to be the bestest mostest stable currency in the world. Then they lost their free colonial commodities that made it so. And the US is losing the oil backing to its mostest bestest currency in the whole world. Time to face the fact the US Imperial hold on the world was weakening long ago. This latest global trade freeze is just the cherry on top of the cake.

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  13. The US dollar was already viable INTERNATIONAL currency by the time UK pooped away its place atop world's dung heap.

    It's not just currency or short term economic situation. Its also about a transparent and relatively fair judiciary and rule of law. A functioning transport system and infrastructure (hospitals, airports, schools). Finally a military to back it up.

    Tell me 1) what currency is respected enough around the word (i.e. how many Chinese renimbi stuffed in some middle class Malaysian's or Argentinian's mattress?), 2) which economy/currency has large enuff volume to facilitate int'l trade, 3) name the country that movers/shakers (rich people...bwah!) are willing to uproot from USA to live permanently.

    There are a couple of desirable currencies (Swiss Francs, UK pound) that are suitable in some respects but simply lack sufficient volume.

    No serious 'rich guy' wants to uproot from USA and permanently move to Flu-wan China or Russia.
    Not. Gonna. Happen.

    From first hand experience with a multi-millionaire ($40 MM) who made fortune with well known computer company. He was an azzhat Libertarian always talking about relocating to Singapore. Spouting crap about America...fucker still here 20 years later playing golf....visits Singapore just a couple times a year. Wifey has him on a leash. Wanker.

    Again I say...the last drop of oil extracted from the earth will be processed and used in U.S. & dollar will remain primary world currency for decades.

    Go long USA.

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    1. It is my contention that the nation state is on its last legs. There will be no Next USA. Everyone is simply using the least crappy currency. That doesn't make it good. As for patriotism, I still hold fond memories of the country that we used to live in. Just as Soviet citizens always loved Russia. And I'm not leaving, even if I could. But that is because it's the devil I know, not because I think it is still great. The Patriot Act killed the Bill Of Rights, and to me, that document was the only thing that made us great. Not a place on a map.

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