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User Info	Fekete - Inflation and deflation all at the same time?; entered at 2007-12-01 12:24:36
Joe-bob Posts: 2455 Registered: 2007-09-18	hmm. I've been following all the discussions on this (inflation, deflation, biflation, PM's great, PM's no good, etc....) and I realize I actually have one thought to contribute I haven't seen any of the very bright people here mention yet... maybe because it is a stupid thought, but let me trot it out and let's see: ...the markets have clearly been manipulated by the government making it difficult to make rational investment decisions... because they keep making the markets do irrational things. Considering this is the government's attitude, that the "invisible" hand, foot, elbow or whatever will always be there doing its thing, won't the government have a plan for deflation? Seeing as how trying to pay the national debt would become an unbearable burden (Weimar Germany's war indemnities anyone?) If I were a market-manipulating federal government official, I'd have fired up the printing presses back when the problem became apparent, certainly by this past August I'd be running them 24 hours a day and even printing very high denominations... 500, 1000, 5000, 10,000... I'd have mountains of the stuff already distributed in warehouses across the country, ready to "inject" into the economy when the financial shtf. I would have already come up with a plan on HOW to get it into the economy. Hey, if all else fails, (as cramer seems to suggest...) just directly buy all the crappy debt vehicles from the banks... WITH CASH! Wouldn't that essentially be a wash, since debt-money dissapears from the economy and is replaced with the same amount of cash? Having tons of cash in the vaults ought to fend off any runs on the bank... Once the government owns all the mortgages, they can do what they want with them... forclose, re-set them at a lower fixed rate, whatever. I'm not saying I ADVOCATE any of this, just putting it out there as an example, my point just being, have we considered the limits of how much the government would intervene? (are there any?) I'm sure people here can come up with better examples/scenerios than I can... Last modified: 2007-12-01 12:34:44 by joe-bob 2007-12-01 12:24:36