Twinsen1. Oil is indeed, but when prices rise too high then the...

Twinsen

1. Oil is indeed, but when prices rise too high then the demand is simply eroded.
Though it increases US CPI, most of the increased prices are simply passed straight through to the major oil produces, this has a very detrimental effect to the US economy as money is simply being funneled away from GDP.
--This 100% supports industrial deflation when increased costs cannot be passed onto consumers, which atm they can not.

2. This is a far stretch away from only bank problems. The insolvent holders are holding negative equity houses, when they are foreclosed and don't go bankrupt they have remaining liabilities which they have to pay off taking other income away from GDP and other asset prices.
This is the definition of deflation.

3. The fed is not printing any money. The cash that originally purchased the treasuries is simply converted back into cash again. Both cash and treasuries can be used as collatoral, in large amounts THEY ARE FUNCTIONALLY THE SAME. No new money has entered since QE2, it is not inflationary.

4. Ok the US govt. has to pay it's bills, this adds money to the system, but this money is going to real goods and services. This is clearly more thing's to spend money on, so is only inflationary when spending is in excess of the goods and services entering the system.
The US govt. Has been spending just enough to keep the US out of full blown deflation, with politicians hell bent on cutting spending, high inflation via this method is clearly NOT happening.

5. In most they are.

6. Refer to point 3.

7. Idiots don't run billion$ fixed income funds (most of the time), you don't put $100billion into 10 year notes if your forecasting any inflation over the coming years.

Any other points?


And i'm sorry Kaya is not a dope, he's just plain wrong and this internet jibber jab end of world, US hyperinflation can be dangerous to the unwary investor when you don't look at the underlying realities.