I don't believe you understand how the system works.
America's real problem is debt, and there's only one way to get rid of it, and that's inflation. How do you create inflation when you can't cut interest rates anymore? You "print money"
"besides, the fed, being privately owned, wants there to be massive deflation so they can pick up assets on the cheap..all the while lulling investas into the trap..."
What your talking about here is more of a conspiracy theory than anything. Also what you fail to understand is that the fed's job is to control inflation/deflation, that's why they exist.
"i wonder how many have actually talked to old timers about the great depression??"
Under Keynesian economics there should never really be a major deflationary period like we have seen in the past, as the Fed has the ability to change monetary policy in order to stimulate the economy.
You often hear analysts warning of deflationary periods, it's quite a popular bang wagon to jump on at the moment. However it's not going to be the case, and more money is going to be pushed in the system- that's just want happens under Keynesian economics, remember the system was created by John Maynard Keynes in the late 1920's during a deflationary period- the idea was to never have a deflationary period/ Depression like the 1920/30s happen again. Roosevelt' was influenced by Keynes's and started to adopt some of his ideas in the late 1930's...the ideas where then adopted by Europe in the 1960's... and it's what the whole western monetary system is based on today
The whole model is setup around inflation, and stimulus- stimulus to stop deflation, encourage spending and promote job growth. Keynesian theory doesn't favor deflation, and will do anything it takes to prevent it... Ben Bernanke is your classic student of Keynes theory( Look at everything he's done and said in the past!), so saying he won't go ahead with QE and whats "massive deflation" is foolish, so foolish that i don't even know why i'm bothering to explain it.
The real concern is that QE3 goes ahead and then all the cash on the side lines comes out at once, which could create a hyperinflation period. Which is what has happened throughout history, and is one of the reasons Germany are so reluctant to pull the trigger on any kind of 'bailout'- they fell victim to deflation and then to serve hyper inflation in the 1920's- it basically ruined their currency and killed exports...
So what you should be worried about is when a central bank dilutes the money supply, to the point where it becomes virtually worthless. We're along way from this yet, however history shows us that it will happen one day in the future. Especially since Keynesian economics system isn't proven to be sustainable, no model ever has been... we could decades away from anything like this though, and we're going to see a WHOLE lot more stimulus first...
