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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