He doesn't seem to know what he's talking about, he says "the last thing US consumers need to know is that a dollar today may be worth less than a dollar tomorrow, and thus drive them to save even more, further crippling the Ponzi monster that the US economy has become."

That does not happen, when people think the dollar (in reality, the assets that are dollar denominated) are going to be worth less in the future, then they save. They would not save money if they thought the dollar was going to be worthless. It's like saying someone would hold and buy more stock because they thought it was going to go down in value.

So...he doesn't really seem to have a grasp on...basic economic, so I'd take what he says with a grain of salt. Though I do think we are in for another whiff of deflation.

Originally posted by yellowcard
He doesn't seem to know what he's talking about, he says "the last thing US consumers need to know is that a dollar today may be worth less than a dollar tomorrow, and thus drive them to save even more, further crippling the Ponzi monster that the US economy has become."

That does not happen, when people think the dollar (in reality, the assets that are dollar denominated) are going to be worth less in the future, then they save. They would not save money if they thought the dollar was going to be worthless. It's like saying someone would hold and buy more stock because they thought it was going to go down in value.

So...he doesn't really seem to have a grasp on...basic economic, so I'd take what he says with a grain of salt. Though I do think we are in for another whiff of deflation.

you simply misunderstood what zero hedge was saying

you have to understand that ben bernanke is trying to manage EXPECTATIONS of some sort of inflation in the future albeit "low"....this is what he WANTS people to believe....so they spend ...we are a consumption economy but you KNOW this....

should people believe a dollar will be worth more next year than this year they will save.....this is EXACTLY what zero hedge was saying.....he just used different words that THREW YOU off.

it's really pretty simple......you even say in your post that he says " the last thing consumers need to know is that a dollar today may be worth less then a dollar tomorrow" i.e a dollar tomorrow is worth more than today

we shall see but there is truth that ben wants consumers to believe deflation is a fantasy and that some inflation is ahead otherwise.....they will stop spending and accelerate more job losses

it should be noted thou that most stats that measure consumer saving's rate's (saving is healthy) are MIS-LEADING. most of the formula's take money that is not spent on consumption and put it into "saving's" category .....the devil in the details is that a lot of consumers are deep in debt ....seeing credit lines and disposable income fall and not necessarily saving the money but using it TO PAY OFF DEBT!!! and the money going to paying off debt is not being measured and just put into the "savings rate"

That's my take on it, Warren. We've seen a supposed bull market the past 6 months (according to the MSM) but the volumes have been scraping the bottom of the barrel. Also, we've seen the corporations which have taken the most in tax payer handouts being by far the most active in the market.

I haven't said this on here before, and it might be a crazy idea with no merit, but I'm starting to believe these propped up corporations weren't in as much danger as we were lead to believe. I'm thinking maybe they had some legitimate issues, just enough to at least make a bailout "plausible" and were then used as middle men by the Federal Reserve to redistribute tax payer dollars to Wall Street and prop up the entire system of money laundering the Fed lives off of while creating the least public outrage. Yes, there has been a lot of outrage, but ultimately the average citizen has capitulated and allowed this theft to occur, whereas had those tax dollars just been handed over directly to Wall Street and the hidden banks without any plausible explanation or without the supposed crisis they created, all hell would have (hopefully) broken loose.

I think that's a huge factor in the idea that auditing the Fed would colapse the system. It wouldn't so much be a case of how much money the Fed has laundered as it would be a case of suddenly finding a paper trail which could lead to the ultimate recievers of that (our) money.

As far as the OP, they'll start talking about deflation in DC soon enough. It will be phantom deflation, used to excuse the hyperinflation they will be forced to crush us all under to cover the deficits these charlitans are running up. There is no way in hell the dollar can suffer from deflation when we've got an adminstration which has essentially built more federal debt in 6 months in office than any of his predecessors built in any single term there. No freaking way.