Didn't they just send helicopter Hillary there to beg for mercy?

+1

Right-o.

Well if they are pinting money to buy the bonds, howcome we do not see inflation yet?

Something does not make sense

It does.

Printed money are still with banksters and government agencies.

Once they get out, you will see inflation and not earlier.

What circumstances will force this money to be sent to open market?

This article ties in. http://www.bloomberg.com/apps/news?pid=20601087&sid=aw8acEUISyD0&refer=home

The Black Hole of Debt. Its everywhere, and wherever the newly minted money is sprinkled by Helicopter Ben, it gets sucked up by the Black Hole. If you give Stimulus Money to consumers, they just use it to pay down CC debt. If you give it to Real Estate Tycoons, they use it to pay of commercial real estate loans they hold. If you give it to banks, they use it to shore up the balance sheet by paying off losing CDS bets. And so forth and so on. None of this money ever makes it out into the real economy, because it already was spent.

Reverse Engineer

What circumstances will force this money to be sent to open market?

If it will never end up in the open market then how will it trigger inflation?

You'll get any number of opinions on this one. My opinion is that you'll have near complete deflationary collapse before inflation could set in. There simply won't be goods to buy at any price.

However, if Helicopter Ben floods the system with enough toilet paper, its possible some of it will spill out into the real economy, probably through speculation with it in the commodities market. However, unless some way is found to get money into the hands of the end consumers of the commodity, the speculative bubble will pop. Deflationary collapse of that market.

Reverse Engineer

RE, A lot of currency will circumvent the black hole of debt, if it goes directly to the citizen in the form of a job created by a govt stimulus package. None of this has kicked in yet. Also, there is still some lending going on. The way I look at it, is every time a person, or institution takes out a loan now, the currency is approximating toxic asset backed securities. They give you some "real fiat" but mixed in with it is some counterfeit! Sooner or later, the value of the entire bundle is reduced to pennies on the dollar.

The $300 billion in debt monetization is turning into a 0% refinancing boom. That's all going to banks to provide free credit. People are refinancing & getting enormous reductions in monthly payments. Just look at Wells Fargo. They're spending that left over cash on the same amount of gas that existed last year. Gas went from $1.80 to $2.30 in 6 months.

So the fiat money has worked through the system. It now takes $300 billion more to buy the same amount of gas as last year, so another $600 billion will be needed next year to cover the current price increase.

So far, there is no evidence of large scale job creation in either the public or the private sector. If this ever occurs, agreed it could fuel inflation in the real economy.

Reverse Engineer

misterno said:



Reverse Engineer said:



That “Block Hole” that Reverse is talking about is called asset depreciation. Almost every asset class in the world is losing value. They are losing value because the economy is declining (see Available Energy for a more detailed explanation).

Image a home mortgage. It is bundled up into a bond (MBS) and sold as an investment. Home prices are, however, going down by 20% per year. The bond goes down in value with it. The same is true of shipping, commercial real estate, manufacturing and almost any asset that can be used as collateral.

Some where on these forums I posted my calculation of the decline rate of world asset values. It was $125 trillion per year. The destruction of capital is now so immense that no amount of currency creation in the world can compensate. The CBs have no conduit to transfer that quantity of money to the general economy. Even if they could, the bond markets would collapse overnight.

Sorry, but we have bought ourselves a one-way ticket!

I understand all that but it seems like stock market nowadays seems to contradict of what you guys are saying.

How can you explain that?

Stock prices are going up from their recent lows because the money has to go somewhere, so traders bid up the price of the stocks, but they aren't really gaining any more value. In fact if you looked at the balance sheets of most of the companies being traded, they probably are losing money. I believe corporate earnings for the quarter should be announced soon, that one should bring the bears back out. LOL. Anyhow, this is just another way to burn up any new money printed. The money gets pushed into the market, raising the price of the stocks. Then a lightbulb goes off in the trader's heads that Hey! That company is LOSING money. Down goes the stock price, into oblivion goes the money used to raise the price back up.

Reverse Engineer