banksters use deflation myth to get bailouts , page-2

Here is the dilemma facing the facing the central banks, momeny printing does not create money, its like a baker baking bread but having no trucks to deliver it, money is only created once it is distributed through credit expansion

http://globaleconomicanalysis.blogspot.com/2009/12/fictional-reserve-lending-and-myth-of.html

its a myth that credit expansion can go on forever, its a myth the central banks want you to believe because they fear deflation more than anything

the real irony is that gold is not always an inflation hedge, it was very poor hedge against inflation from 1980-2000, in that period we had rampant inflation but gold was a laggard

this is a fact that the mono scenario gold zealots choose to ignore

gold (physical) does very well in deflation, this is because deflation is caused by the unwinding of excessive debt, deflation is simply a shortage off money which causes prices to fall to compete for its share of the falling supply of money

I know it sounds contrary too central bank propaganda , which says that money can never be in short supply because you simply print it into existence, the key to this is that the shortage occurs due to much debt, the banks print and it the money simply stays in bank reserves and never makes it into the economy

a belief in central banks being able to cause inflation is ironically a belief in the power of the central banks, the problem is the printing already occurred over the last 2 decades, this money was then lent out to borrows who bid up asset prices, at the same time the central banks together with the governments conspire to manipulate inflation price data, for instance rising (and falling) house prices are not included in inflation data, housing is our biggest household expenditure but governments exclude it from inflation pricing data, this creates huge imbalances in the perceptions of folks

When houses rise its simply a reflection of growing indebtedness, this creates demands on households to allocate more of their incomes towards housing, this in turn causes money to flow into non productive wealth creating assets, entrepreneurs given a choice between building a factory and speculating on rising assets conclude they are better speculating on rising asset prices, this diverts money away from income producing assets toward bigger and bigger houses, folks think that the economy is growing but when you take away the rising debt level the growth is largely imaginary

this happened in the 1920s, the roaring 20s was simply a debt bubble, the cause of the great depression was simply to much debt. If you go too 12.45 in the following youtube clip Steve Keen explains what I have explained above better than me

http://www.youtube.com/watch?v=ZKanqxd5ZW4&feature=player_embedded

Steven Keen gets right at the heart of the central banking money printing myth

the key is too stop listening to central bank propaganda about money printing, think about it can the American , Japanese and European economies really afford inflation, inflation would simply accelerate bankruptcies because folks would not be able to afford it.

IMO opinion we need to be careful, a gold equity bull and a gold physical bull are not the same animal, gold equities are the poor cousin of physical gold