[Queston]Why is deflation worse than (hyper)inflation to 'Status Quo'?

S

spets1

New Member
Almost everyone is predicting that there will be QE3 (in whatever form), QE4, 5, 6 etc.

There are some deflationists out there but I have not found too many from my readings.

In the last 25 years there has been 21 countries that have experienced hyperinflation.
Meaning that the Central Banks have plenty of experience with hyperinflation. They know what causes it, they know how it develops, they know how it behaves, they know the effects on population (aka slaves) and they most importatntly know what happens to themselves.

So quoting zerohedge :
Rosie .., Zero Hedge, Minerd, Koo, Janjuah and all other pragmatics who realize that the Fed will never, never, allow deflation to run its course
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My question then is. Why would they ('status quo', power elites, whatever you call them) prefer inflation over deflation?
Why do they never stop printing?
 
I know why they prefer inflation so I'll explain that part.

Basically by inflation they can make sure their debts are minimized, by inflating money they make sure that fiat is worth less and less but their debts stay the same in nominal values so in effect they are paying less!

Also, by inflation, the government can effectively steal from the public (citizens). Inflation figures are always made up using CPI or some other crappy indicator which is usually not reflective of the current situation and costs of the public. By claiming inflation to be 3% when in fact it is more like 6%, they have effectively stolen 3% of most people's wealth.

In the US, Bernanke can print whatever money he wants and hand it out to whoever he wants without accounting to anybody while reporting inflation values of 3% when he prints trillions. How can the elite who get free money not like this?

As for deflation, here are my guesses (I still haven't finished reading End the Fed by Ron Paul only briefly glanced but he talks in detail about this), deflation kills the economy. Everything is slowed down to a halt economywise. The money velocity drops, credit drops, everything is just slow and the economic sentiment is low. The people will not be happy, the elites don't want them to be unhappy, the elites want the plebs to be happy watching family guy, survivor, masterchef etc and not be thinking about what the elites are doing.
 
I had this little a'ha! moment whilst reading The Evil Princes of Martin Place by Chris Leithner (solid case against Central Banking with examples).

Helicopter Bernank and friends fear deflation because we are now a debt based society - much of our consumption is fuelled by debt. When there is deflation there is more incentive for the average person to default on their debt - why keep paying high interest on depreciating assets when the purchasing power of the money you would otherwise hold keeps increasing and increasing. More incentive to go bankrupt. Mass default causes a great black hole in the economy which can be endured/war outbreak/revolution as people wonder where their SOL went.

Debt once upon a time used to be taken very seriously - there were debtors prisons and a man who was bankrupt would become the slave of the creditor until his debt was paid with labour. Perhaps they understood/experienced the grave implications of situation we have today.
 
mikedm said:
Debt once upon a time used to be taken very seriously - there were debtors prisons and a man who was bankrupt would become the slave of the creditor until his debt was paid with labour. Perhaps they understood/experienced the grave implications of situation we have today.
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How is that different from today? Today we have to pay back massive ammounts of money to them rather than labour. I think we are in the same situation as you mentioned but we can not see that we are infact in it.
 
registered nutcase said:
mikedm said:
Debt once upon a time used to be taken very seriously - there were debtors prisons and a man who was bankrupt would become the slave of the creditor until his debt was paid with labour. Perhaps they understood/experienced the grave implications of situation we have today.
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How is that different from today? Today we have to pay back massive ammounts of money to them rather than labour. I think we are in the same situation as you mentioned but we can not see that we are infact in it.
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Yes but when you have deflation you will find a lot more people say "stuff this for a joke" and walk away from their mortgages and start afresh etc as their equity shrivels up whilst they are paying comparably massive interest on the original purchase price. Today we also have limited liability corporations that can dissolve and leave creditors holding the bag with no human held ultimately accountable for the debt. But I get what you are saying - servitude to debt has become the norm.
 
Read this:

http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html

Always ask yourself, qui bono? (who benefits)

TPTB will make decisions that are in their self interest. We'd be stuffed with full-scale debt deflation as it would be much, much worse than the 1930s and we're a massive debtor nation (165% private debt/GDP, public debt, CTH deficit $1B a week!). Perhaps one of the best passages from the link above for me was this:

You see, this is where we are today. We are using, as a medium of exchange, a purely symbolic, completely worthless token. The logical action, then, is to exchange surplus worthless tokens for something of value. Yet still today, most everyone hoards up purely symbolic, completely worthless tokens in the form of the debt of more tokens to be worked off and paid by someone else. In fact, globally, this debt far exceeds the ability for it to ever be paid (worked off by future labor), at least not at today's dollar purchasing power of .02 grams of gold. And yet it will be paid by someone, just as the deflationists promise! So the question then becomes, how can an impossible debt be paid?

Answer: if it cannot be worked off by future labor, it will be worked off by past labor, the net surplus of which was erroneously stored in debt and dollars. The icing on the cake is that it is also the past labor of "someone else," if the profits can be capitalized and the losses socialized. Precisely the process we have witnessed over the past three years, for those with eyes to see.
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You either pay it off through (hyper)inflation or suffer debt deflation. Either way I believe the end game is complete economic collapse and complete collapse of the credit(money) system.
 
Mr Medved said:
You either pay it off through (hyper)inflation or suffer debt deflation. Either way I believe the end game is complete economic collapse and complete collapse of the credit(money) system.
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The muslims have a prophecy from the Prophet pbuh

" There will come a time when only the Dinar & the Dirham will be of value "

Dinar .. gold coin
Dirham .. silver coin

and that Ribah ( Interest ) will be globally widespread.
 
and Nostradamus weighs in with a prophecy:

Quatrain 28 in book eight:

"The imitations of gold and silver will become inflated which after the rape are thrown into the fire, after discovering all is exhausted and dissipated by the dept. All scripts and bonds are wiped out."

paper fiat money imitates gold and silver...

got real gold? real silver?
 
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