Deflation

[sgreger1]

http://online.wsj.com/article/SB1000...googlenews_wsj


My company is in the news today. We bet $174 million on dirivitives predicting that deflation will occur. Bought em up early in the year when everyone was still talking about inflation.

(We are going to win that bet)

This company is owned by "canada's Warren Buffet", and has a looong history of making smart bets regarding the economy. In 2003 we took out a huge bet against lenders like countrywide and therefore when the crash came in 07-08 instead of losing money we made several billion dollars. $22 billion is on the line, and if the past is any indicator, this $174 million bet that an extended period of deflation will occur at some point during the next 10 years will insure billions more in profit. Don't you wish you had money like that to bet on futures and stuff? Man I wish I was rich lol.


Then I could afford to open up a snus distribution company that doesn't mail out some broke-ass portions with snus all over the place that can get there is less than a month and not arrive dry and overpriced.

[Premium Parrots]

so.......this thread isn't about breast implants gone bad?

[ratcheer]

Inflation is bad. Deflation is much worse. I can't believe you're gloating over this.

Tim

[justintempler]

How much is 174 million worth after deflation? 150? 100?

[CoderGuy]

so.......this thread isn't about breast implants gone bad?

lol!

[CoderGuy]

Inflation is bad. Deflation is much worse. I can't believe you're gloating over this.

Tim

So if INflation is bad and DEflation is worse I suppose Flation is the good one?

[lxskllr]

So if INflation is bad and DEflation is worse I suppose Flation is the good one?

No. You're thinking of fellation ;^)

[CoderGuy]

No. You're thinking of fellation ;^)

Oh yes, that IS the good one.

[c.nash]

Lol. This is the most random thread.

[Mr. Snuffleupagus]

Lol. This is the most random thread.

Maybe or maybe not...

http://www.snuson.com/forum/showthre...ghlight=random

[c.nash]

Maybe or maybe not...

http://www.snuson.com/forum/showthre...ghlight=random

Nah, that's snus related. Lol

[sgreger1]

How much is 174 million worth after deflation? 150? 100?

We are securing our $22 billion against deflation via this bet of $174 million. If we are right we get $9 billion dollar back for $174 million investment. This will cover anything lost during a deflationary period so in the end we should not lose any significant amount of our $22 billion.

[sgreger1]

Inflation is bad. Deflation is much worse. I can't believe you're gloating over this.

Tim

It is much worse yes, but it is also much better in the long term and is what we need. Prices have been artificially inflated for years,and now that people are borrowing less we are going to see the correction we need. But it is very bad for the short term economy, extremely bad.

It works like this:



Americans have lowered their credit card debt by 13% Highest State was Arkansas at 27%. by paying off credit, 'money' is destroyed.


People imagine when they use Mastercard or any other credit, they are borrowing money which already exists somewhere. Not true. Money is created by the new debt. Remember, these days money = debt, we live in an upside down reality. Money no longer represents a store of value already created somewhere, it is like a photographic negative, money represents debt, depending on value to be created in the future to continue the faith-based value it has.


When we create debt, through the magic of fractional reserve banking, we create money, and actually with help from the bankers, we create 1,000 times more money than we create because banks can loan out 90% of their assets and your debt is, to them, an asset. When they loan that out, it ends up in a bank, as an asset and they can loan out 90% of that.


When we pay down debt we take money out of circulation at the same magnified rate. Pay off $100 and suddenly $10,000 disappears. Hence the deflation when Americans lower their credit card debt by 13% in something like a year.


A contributing factor to explaining a strengthening dollar in the face of $Trillions in new funny money is the fact that other Nations, whose currency is tied to ours, or who must compete in a world market dominated by dollar-based currencies, when we inflate ours, they have to inflate theirs. So now, since theirs sucked worse than ours to start with, inflation magnifies this, meaning now theirs suck way worse than ours so they invest here, into dollars which are safer than their money.


So as the tide goes out, Ship America is leading the sinking, but all others are sinking faster so they climb aboard ours which sucks less. Hence strengthening dollar, even though everything is sinking, so it just looks better by comparison.

[truthwolf1]

I hope things like real estate continue to deflate to late 90's prices. The artificial inflated bubble of the last decade is what caused this mess in the first place. It is almost as if the 2000's was really a lost greed of a decade on all fronts and without a complete crash we will never get back to reality.

Burn the house down! and let's start where we ended in 99, with some new innovation but be more careful with loans/credit and corporate corruption as we start to grow again.

[sgreger1]

Burn the house down! and let's start where we ended in 99

You mean like the beginning of a recession and the collapse of a huge bubble? lol

I agree though, deflation is bad for the economy, but having everything artificially inflated into infinity because of cheap credit is not any better. We need to let things deflate. This sucks because the value of everyones shit goes down, while their debt stays the same. This is, however, a dream for anyone with no debt and cash on hand. But deflation also means less jobs and less credit for small businesses which means less business expansion and again less jobs.