Hyperinflationary Runaway

[Soros]

May I resurrect this old topic? Why is it just the Federal Government receipts and expenditures in the calculation? The State and Local Government spent $350.3 billion on "Government social benefit payments to persons" during 2003. Isn't that included in the "abyss"?

http://www.bea.doc.gov/bea/dn/nipaweb/Tabl...r=2004&Freq=Qtr

 

In any case, Federal Government "Government social benefits" was $958.9 billion during 2003. Which makes the "General Government" "Government social benefits" expenditures $1,332.9 billion, so the question is how much these costs will grow, and to what extent they are connected to the "Consumption expenditures".

http://www.bea.doc.gov/bea/dn/nipaweb/Tabl...r=2004&Freq=Qtr

 

The debt figures are somewhat unclear to. The Treasury put the Government external debt at $4.4 trillion. With an interest rate around 4.5%.

http://www.publicdebt.treas.gov/opd/opdpdodt.htm

http://www.publicdebt.treas.gov/opd/opdar102004.htm

 

But is that including "State and local governments, excluding employee retirement funds" from the Z1? Which was 1,559.7 billion "owed", and 1,010.1 billion "held" at the end of 2003.

http://www.federalreserve.gov/releases/Z1/...cessible/l1.htm

 

Here's an updated table for 2003:

 

Expenditures: Whole Government during 2003.

Receipts: Whole Government during 2003.

Deficit: Whole Government during 2003.

Debt: Federal government "credit market debt owed" at the end of Q4 2003.

Interest rate: "Average Interest Rates On Treasury Securities" Total "Marketable" and "Nonmarketable" in October 31 2003.

Interest payments: Whole Government "Interest payments" during 2003.

Interest payments as a % of expenditures: Interest payments / Expenditures

 

(values in $ billions)

........................................Total......Int......Int....Int. as

Year......Recpt....Expdt....Deficit.....Debt.......Rate.....Pay....% Expdt.

 

2003......3,032....3,400.......-506.....4,033....4.615%.....303.....8.911%

[threadbare]

Hyper, You sound like the Rodney Dangerfield of the debt backed by debt system. "I don't get no respect" You CAN have price inflation without wage inflation, for a long time.

 

Mjkts, The elites with brains are out of cash and into oil, water, gold, silver. Where's there's scarcity and feverish demand, they'll be there. The dumbass elites believe the same nonsense many other "positive thinkers" do. The guy with the mile wide grin, touring around in a 60 foot bayliner, greased up like a pig and pumped about his last big real estate deal, is going to be fed into the same meat grinder as the delusional in all the other classes.

 

The future is going to be a kind of Darwinian shaking down of the fantasy prone, as they are forced to face their own deferred reality after being caught up by everyone else's. Oh the magic of the reality tv show. Can you imagine if they actually chronicled the down and dirty reality of the economy in the same manner? They probably will, after it's too late.

 

Only the wily shrews will survive. That would be you and Hyper, for two.

 

Machinehead, Nice chart, though it lacks the aesthetic grace of long division

[rayok]

How are wages going to increase? when are they going to increase?

 

Without wages rising there can be no hyperinflation period.

 

<{POST_SNAPBACK}>

 

Inflation CAUSES wage increases. Hyperinflation CAUSES larger, more frequent, wage increases.

[rayok]

The public believes that Paul Volker conquered inflation. He did not. He merely changed the focus of inflation, from hard assets, to paper assets. Now, the focus of inflation is reverting back to hard assets. This game will only end, as all fiat currency games end, when the U.S. dollar has ZERO purchasing power, and not a minute sooner.

[threadbare]

The game will end, Rayok, when confidence is restored in the currency, by whatever means. In the case of inflation, this time it has little to do with wages and everything to do with natural resource scarcity. The future will resemble something like a storm ravaged community where prices for rebuilding are driven up, plus some real price gouging going on. Wages won't go up, as there will be tremendous competition for jobs. Rather than look at American historical precedents, check out what happens in third world despotic dictatorships to get an idea of how this will unfold. This thing is going to change the way people live, big time. The monster homes in the suburbs will shelter huge extended families --and forget lawns, they'll all be converted to gardens.

[rayok]

The game will end, Rayok, when confidence is restored in the currency, by whatever means. In the case of inflation, this time it has little to do with wages and everything to do with natural resource scarcity. The future will resemble something like a storm ravaged community where prices for rebuilding are driven up, plus some real price gouging going on.  Wages won't go up, as there will be tremendous competition for jobs. Rather than look at American historical precedents, check out what happens in third world despotic dictatorships to get an idea of how this will unfold. This thing is going to change the way people live, big time. The monster homes in the suburbs will shelter huge extended families --and forget lawns, they'll all be converted to gardens.

<{POST_SNAPBACK}>

Inflation is ALWAYS a monetary phenomenom.

 

Inflation CAUSES price increases. Price increases do NOT cause inflation.

 

Inflation ALWAYS leads wage increases.

 

Monster homes will become unaffordable, if rising wages do not keep pace with the rising carrying costs of home ownership. Home gardens, would be the result of food prices rising faster than wages.

 

Which "third world despotic dictatorship" did not have inflation?

 

On Nov.19/04, Greenspan said foreign appetite for U.S. assets would likely decline and clearly stated that those who were unprepared for higher interest rates were "desirous of losing money."

 

You are obviously unprepared. Prepare to be unpleasantly surprised.

[FeedFool]

Check out the seventies and the eighties High inflation and high unemployment?s

 

Do some research on what?s it?s like in third world country?

 

House price has nothing to with affordability factor.

 

Food, Heating, Fuel ???? Has nothing to with money in your pockets.

 

Money from thin air will be produced, that?s what central bankers get paid to do.

 

 

 

 

The game will end, Rayok, when confidence is restored in the currency, by whatever means. In the case of inflation, this time it has little to do with wages and everything to do with natural resource scarcity. The future will resemble something like a storm ravaged community where prices for rebuilding are driven up, plus some real price gouging going on.  Wages won't go up, as there will be tremendous competition for jobs. Rather than look at American historical precedents, check out what happens in third world despotic dictatorships to get an idea of how this will unfold. This thing is going to change the way people live, big time. The monster homes in the suburbs will shelter huge extended families --and forget lawns, they'll all be converted to gardens.

<{POST_SNAPBACK}>

[threadbare]

Rayok, I think we're actually in agreement, on most points. Agree that inflation this time is a monetary phenomenon, where in the past, at least in Canada, it was, to a great degree, wage driven. Higher prices won't lead to wage inflation. As horrid as it will be for most people it will have the advantage of putting the brakes on a true Weimer type scenario. The currency will reflect the fact that wages aren't in run away mode. This will be the only underlying strength the dollar retains, as the world community will lose confidence in the US ability to generate any kind of stability in their currency, or anything else, for that matter.

 

Third world despotic regimes are often inflationary, agreed again. That they produce higher wages is a question. You can have rising prices and falling wages for decades, probably centuries. It's happening in the US right now and this is just the opening act.

 

The price of commodities, oil, nat gas, metals, won't drop with higher unemployment, as is commonly assumed. That was yesterday, this is today. There will be no benign check or balance on an economic system that has so outworn it's welcome on this planet. We have way over exceeded carrying capacity. It's going to be pay up or die.

 

We're about to see Mother Nature's rage expressed numerically, in the only symbolic language most people understand. Let inflation rip!

 

 

Are YOU prepared?