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<p>[QUOTE=&quot;InfleXion, post: 1721150, member: 29012&quot;]I don&#039;t mean what you think I mean. We have to get specific with definitions. When speaking about inflation or deflation we have to quantify whether we mean monetary supply or price because they are not a direct correlation although certainly walk the same coastline. The monetary system is inflating, but a lot of prices are deflating except for those for <i>essential</i> goods and services which is biflation. This price deflation is due to decreased monetary velocity which is due to the new money being printed with very little velocity. However the potential velocity is far greater due to this printing and is like a ticking timer.</p><p><br /></p><p>So the dollar is in fact inflating as per monetary expansion, and it is weakening in general as evidenced by essential goods and services which are much more difficult to manipulate. But yes lately it has been getting <i>relatively</i> stronger due to safe haven demand from people running out of the Yen. So we also have to quantify the timeframe. Compared to a couple months ago the dollar is strengthening. Compared to 5 years ago it is weakening.</p><p><br /></p><p>To say the dollar is strengthening in a negative real interest rate environment is... <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie1" alt=":)" unselectable="on" unselectable="on" /></p><p><br /></p><p>I don&#039;t think the Fed is stupid. I think they know exactly what they are doing. How else do you win a class war? Steal peoples&#039; wealth through inflation, justify inflation by holding the financial system hostage, use that inflation to make the system even more dependent on highly leveraged derivatives used to hold it hostage, rinse, repeat until such time as it&#039;s no longer sustainable.</p><p><br /></p><p>You do know what rehypothecation is right? When you have one underlying asset leveraged to infinity then you have to unwind infinity. It works great for ballooning your balance sheets but there is no viable exit strategy when your solvency depends on it.[/QUOTE]</p><p><br /></p>

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