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Ambrose E. Pritchard now sees inflation as major threat

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Ambrose E. Pritchard now sees inflation as major threat

Unread postby EnergyUnlimited » Tue 28 Sep 2010, 07:21:55

British columnist writing much on issues related to economy (Ambrose Evans Pritchard) was for last 2 years defending QE policy.

Now he have changed his mind.
He suggests that this exercise gone wild and now hyperinflation is a real risk.
That represents change of his view by 180 degree and his current plea is in fact quite dramatic.
http://blogs.telegraph.co.uk/finance/am ... d-part-ii/

Ambrose Evans Pritchard wrote:I apologise to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing...


An interesting reading.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby Roderick Beck » Tue 28 Sep 2010, 08:41:43

Anyone who argues that hyperinflation is a serious risk is an idiot. It makes no sense whatsoever.

Mr. Imbecile Pritchard should review the Japanese QE experience before making a fool out of himself. Japan's M1 supply grew quite rapidly during the 90s without precipitating measurable inflation during the following decade.

The lack of historical understanding by today's commentators baffles the mind.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby BasilBoy » Tue 28 Sep 2010, 10:19:39

from Pritchard
If the US is not in deep trouble, the Fed should not be thinking of extra QE.

...uhm, hello?

Many analysts act as if they are the only ones that are aware, while the rest of us are acting in a vacuum. Although I despise America's monetary policy over the last several decades, I am quite confident that Bernake et al. are at least aware of the threat of hyperinflation.

We're stuck in a mess and are going to have to face the music one way or another. Hyperinflation is certainly a possibility, but so is a deflationary spiral. We're trying to thread the needle to keep the house of cards afloat, while hopefully creating some sort of foundation, upon which to build...
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby the48thronin » Tue 28 Sep 2010, 12:19:52

BasilBoy wrote:from Pritchard
If the US is not in deep trouble, the Fed should not be thinking of extra QE.

...uhm, hello?

Many analysts act as if they are the only ones that are aware, while the rest of us are acting in a vacuum. Although I despise America's monetary policy over the last several decades, I am quite confident that Bernake et al. are at least aware of the threat of hyperinflation.

We're stuck in a mess and are going to have to face the music one way or another. Hyperinflation is certainly a possibility, but so is a deflationary spiral. We're trying to thread the needle to keep the house of cards afloat, while hopefully creating some sort of foundation, upon which to build...

or is that blissfully keeping our heads stuffed firmly between the cheeks of our a**...... ( lol)
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby BasilBoy » Tue 28 Sep 2010, 12:49:30

the48thronin wrote:or is that blissfully keeping our heads stuffed firmly between the cheeks of our a**...... ( lol)

-------------------------------------------
BasilBoy wrote:...I despise America's monetary policy over the last several decades...

BasilBoy wrote: We're stuck in a mess...

BasilBoy wrote: We're trying to thread the needle to keep the house of cards afloat...


I have no idea how you inferred blissful ignroance from such comments. I was trying to point out that it's easy to criticize whatever action (or inaction) we take because there is no easy solution...
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby Pops » Tue 28 Sep 2010, 13:13:36

Jeez, take a chill, is everyone aching for a fight today?

I was about to say I doubt the entire power structure is somehow less informed or intelligent or more corrupt/self serving than your average blogger/stock market shill.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby the48thronin » Tue 28 Sep 2010, 14:24:49

Pops wrote:Jeez, take a chill, is everyone aching for a fight today?

I was about to say I doubt the entire power structure is somehow less informed or intelligent or more corrupt/self serving than your average blogger/stock market shill.


Excuse me for the confusion,
My response was not about the poster, but about the ( cough cough) leadership in our economic power structure. If you as a mod think I was being personal, you have my permission to remove my original answer, and all attendant replies, in the interest of not taking this sometimes interesting forum any farther down the road I see it going elsewhere. sigh!
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby Pops » Tue 28 Sep 2010, 14:56:35

Naw 48, I was talking to BBoy.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby BasilBoy » Tue 28 Sep 2010, 17:09:01

Pops wrote:Naw 48, I was talking to BBoy.

I don't know why you are telling me to chill. A poster asked a question, with an inference. I was merely answering the question by correcting the point of my original post. @the48thronin...the only confusion was by the moderator.

Pops, I do not appreciate being told to chill, especially when I was not hot. There was no reason for you to interject with such comments. Perhaps it is you that needs to chill...?
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby ian807 » Tue 28 Sep 2010, 17:25:33

We will get hyperinflation, but not for a while yet.

What we're fighting now is deflation, brought to you courtesy of the over-indebtedness of just about everybody. There's a cure for that, sort of. The fed will try and stop it by pumping more dollars into the system. I'm sure they think they can control this. In reality, probably not.

Historically, that's how we've paid off debt. Think the USA paid off its world war II debt? Think again. The greatest generation did it by letting the dollar inflate, thereby allowing debt payment with cheaper dollars.

So, we'll do it again. There's a lot of pressure not to this since it would more or less erase the gains made by the world's wealthy these last few decades, so a lot of money is going to K-Street lobbyists to bribe congress not to use significant quantitative easing. If the recession goes on too long, or too deep, however, neither congress nor the fed will be able to resist the pressure.

When that happens, good luck. If you're in debt and working, hyperinflation is your friend, since your week's pay can pay off your house. If you're a saver and you've been careful, you're wiped out.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby mattduke » Tue 28 Sep 2010, 18:32:08

Roderick Beck wrote:Anyone who argues that hyperinflation is a serious risk is an idiot. It makes no sense whatsoever.

Mr. Imbecile Pritchard should review the Japanese QE experience before making a fool out of himself. Japan's M1 supply grew quite rapidly during the 90s without precipitating measurable inflation during the following decade.

The lack of historical understanding by today's commentators baffles the mind.

Hyperinflation of government paper money is a certainty. This will be the third major hyperinflation of a US currency.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby americandream » Tue 28 Sep 2010, 20:26:42

I absolutely agree with you. Most commentators appear to be stuck in the regional capitalism of the Depression era whilst blissfully ignoring the new dynamics of globalised capital and the offsetting effects of a new more vigorous,cmphrehensive, deeper and competetive global labour/consumer market on regional money supplies.

The party is not over for a while....yet.

Roderick Beck wrote:Anyone who argues that hyperinflation is a serious risk is an idiot. It makes no sense whatsoever.

Mr. Imbecile Pritchard should review the Japanese QE experience before making a fool out of himself. Japan's M1 supply grew quite rapidly during the 90s without precipitating measurable inflation during the following decade.

The lack of historical understanding by today's commentators baffles the mind.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby EnergyUnlimited » Wed 29 Sep 2010, 01:43:52

ian807 wrote:When that happens, good luck. If you're in debt and working, hyperinflation is your friend, since your week's pay can pay off your house. If you're a saver and you've been careful, you're wiped out.

Only applies for stupid savers, who was accumulating currency and other paper wealth.
Those invested in land and commodities will perform very well.
Goldbugs will also do well but they must be prepared to defeat government, eg ignore certain laws, if there are some confiscation ideas around.

It remain to be seen how working debtors would perform.
Those with fixed interest rates are obviously winners, however I am not so sure about these with variable rates.

Banks may react very fast these days, even overshoot their reactions.
What about your current interest rate of 10% growing within few months to
10 000% or more?

Certainly can be done.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby Tanada » Tue 20 Dec 2016, 12:34:17

The way I understand it the banks that were deemed 'too big to fail' were all given massive infusions of cash which they then placed on deposit with the Federal Reserve system. Those huge desposits are still sitting in the Federal Reserve at least as digits in the computer programs because the biggest banks didn't lend them out because of interest rate manipulations by the Fed which has forced inflation to stay at record lows for a fiat currency.

Now the Federal Reserve has started slowly raising rates, and each time the rate rises it gives more incentive for those mega banks to loan out that pile of digits in the vault to earn interest on the resulting loans.

The fear I heard expressed way back when all the money was loaned to these banks to keep them solvent is, once that money starts cycling through the economy it can cause a rapid cycle of inflation because so many more trillions of dollars exist in the computer data today than existed in 2008 before the crisis and there isn't trillions of dollars of new stuff around to offset the increased amount of currency.

So are the fears of hyperinflation about to return like a recurrent nightmare?
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Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: Ambrose E. Pritchard now sees inflation as major threat

Unread postby Outcast_Searcher » Tue 20 Dec 2016, 20:06:48

Tanada wrote:So are the fears of hyperinflation about to return like a recurrent nightmare?

I don't think these things are (accurately) predictable. (As far as the inflation rate or the timing).

First, our understanding of economics is far from complete (including for economists). Surely that much is clear to everyone (but economic newsletter/blog writers of economic "advice" who are at best over time -- very random).

Second, based on what we supposedly do understand about economics due to high monetary velocity, to get the worrying level of inflation, we'd need the economy to become overheated as the banks let a huge amount of that cash loose.

Could that happen, in 1970's style "too much growth and money chasing goods" inflation? Sure. But with the current world and lots of stagnant resources (especially labor), it sure doesn't seem likely to this amateur observer of economics.

....

(Now that I've said that, we'll have high inflation next year, of course). :?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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