A trip back to 1964 proves Silver creates wealth

"I don't think anyone knows yet. Of course we have normal consumer price inflation as there has been for a long time, and folks need to deal with it. Beyond that, I believe you are looking at how the Fed is expanding the balance sheet and calling that monetary inflation. But the other side of the coin is that for every dollar they create, a dollar of asset is removed from the banking system or a dollar of debt is created, and both of those actions are deflationary. So it looks like a wash for now. "


Read more: http://www.cointalk.com/t214294-4/#ixzz28Rf1wNr9

And that proves you are wrong, fatima. Everyone should note how you only cut and paste whatever segment of a statement that suits you. The entire quote is above which clearly shows that my statement indicated that the inflationary effect of increasing MB was offset by the deflationary impact of removing an asset from the banking system. SO IT IS A WASH. Nowhere did I ever state that an increase in MB is deflationary.

You're busted again fatima, and everyone should take note of how you operate and deceive. And you continuously duck the question about when all of these catastrophic inflationary impacts are going to show up in the real world. Care to answer that or just duck the question again.

 

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The reason this is wrong and why you made the mistakes above is that you are simultaneously defining the dollar to be a both debt and an asset. Furthermore when this happens, the money is not removed from the finance system. The bank is still free to use the reserves via fractional reserve banking to create more money than deposited.

 

This is not correct - the money was provided to add liquidity and strengthen reserves for support of money already deposited.

 

The reason why you are wrong is that the transaction involves buying an asset from a bank and replacing it will dollars. So you are correct that no money is removed from the finance system, but neither is is added when the total balance sheet is viewed, so the claim of inflation is problematical. Whether or not banks lend more as a result remains to be seen, but clearly the Fed hopes this happens. This is why I say the chance of having deflation or inflation is 50/50. Your mistake is in only looking at what the Fed is doing with its balance sheet, and not looking at the other side of the transaction. If the Fed buys $1 worth of mortage backed securities from a bank, the bank might turn around and use the dollar to buy a dollar worth of treasury bills. There is more liquidity in the system, but that might not matter if the bank is more concerned with solvency.

 

Please explain the mechanic of how this is done. I'd be interested to hear it.

 

The total balance sheet has increased, significantly. I've listed the amounts above. If you wish to show where this amount of money has disappeared from circulating money I'll certainly consider it, but I bet you can't do it. You are constantly contradicting yourself and making this stuff up.

You have simultaneously described a fed action as causing deflation, causing inflation and causing nothing.

We have monetary inflation.

 

Simplicity and mathematics trumps whatever the gubment tells us. Put more $ in the system, not backed by anything, and it makes all the other dollars less valuable. Cite whatever research you wish, paper bucks are based on a belief system, a system that falls apart when people want to cash in. As $ become less valuable, solid assets look better. I'd rather own property than imaginary value based on what someone tells us, especially when that someone has much to gain from trading bucks. Call me a simpleton, but the joke is up and the people are catching on.

 

Edit: I posted here again but deleted it because I decided everyone else reading this knows what I said, but you never will get it so why bother.

For all your statements, hyperinflation has not occurred. So we'll wait and see.

 

What you did was to try and dismiss someone's else's valid point with completely made up nonsense which, when examined completely, falls apart which made up nonsense is want to do. Everything else has been a tap dance by you to avoid admitting that you were completely wrong on the subject that you spoke with such authority.

In regards to hyperinflation, I have never used this word not suggested that anything like it exists. I have said there is monetary inflation and as much as you want to distract from this with these sorts of tactics, it exists.

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Holding physical PM is a great way for people to protect their accumulated monetary assets from the monetary inflation being created in unprecedented amounts by the Federal Reserve.

 

What I wrote is there for everyone to decide. Your inability to understand it doesn't invalidate it. But you never addressed the question as to when we can expect the dire result to appear from the unprecedented monetary inflation.

 

You point to the post I've made in this topic where I said there is going to be a dire result, and I will be glad to discuss it. I've only said that you need to move to protect your assets from the effects of this monetary inflation. Owning PM isn't a binary choice between expecting Armageddon or not.

 

That's nice. What I wrote was in response to you. Let's review. You said in regards to the monetary base being increased by the Federal Reserve in unprecedented amounts, i.e. monetary inflation.

1. an increase in MB = a decrease in M and this causes deflation
2. an increase in MB = no effect on M and deflation
3. an increase in MB = an increase in M and this prevents deflation

It can't be 1, 2 & 3 simultaneously yet here you are claiming that it can. You invalidated yourself, no need for anyone else to do it.

 

(dup)

 

I didn't post any of that and to say so is a lie.

 

Oh dear, Incorrect again.

Cloud's statements on the workings of the federal reserve

 

And my response was: "Not at all. In the first instance, I correctly indicated that the inflationary effect of creating a dollar to buy a bank asset is offset by the deflationary effect of the asset removal. And the inflationary effect of the government borrowing a dollar is offset by the deflationary effect of adding a dollar of debt to be serviced.
In the second, I indicated that MB has no impact on the other M’s such as MZM which excludes MB, which is also a correct statement.
In the third, I correctly stated that the Fed is adding liquidity to the banks to prevent deflation.
So you can remove context and try to change words and meanings, as you are wont to do, but everything is there for anyone to read and see your deception. "

So there is no possibility of having an intelligent discussion with you over any topic as long as you twist other people's words and cut and paist partial statements to fit what you want them to say instead of what they actually say. My words mean exactly what I intend them to mean. But you don't care about accuracy or other people who might read what you post.

Everyone should take note of this.


Read more: http://www.cointalk.com/t214294-7/#ixzz28jUDAzMx

 

Except this explanation is completely wrong and demonstrates a misunderstanding of the fed. Base money is not used to purchase anything.

 

And to show how little you understand, the quote isn't about the Fed but about the impact on the bank dealing with the Fed [i.e., "bank asset"]. You always look at the Fed side of the transaction without looking at the impact on the other side. This is why your analysis is wrong.

 

Banks do not control MB. You responded to my statement on MB. Let's review what you said again.

According to Cloud, when the Fed increases MB the following happens:

1. an increase in MB = a decrease in M and this causes deflation
2. an increase in MB = no effect on M and deflation
3. an increase in MB = an increase in M and this prevents deflation

All simultaneously too. Of course it's completely wrong as well.

 

Well, I never said that, as I already proved, so I guess you are either too stubborn or short sighted on the subject to understand that the Fed doesn't exist in a vacuum and that MB is only significant in the way it impacts the economy through the banking system. Or maybe it's just a psychological flaw that won't permit you to admit a mistake. Anyone who reads through this thread will see your deception and apply it to your future posts.