Could the Weimar Hyperinflation Happen Again in America?

[montmorencyt2w]

Yes - I saved the lnk for the Vid - just forgot where I snatched it from.



The next moon shot in oil will be the proverbial last straw!

Yes, although I don't think it can only be the speculators driving it up. After all they can get quite rich shorting it can't they? I'd be quite happy to help short it back down to $45 or so.

 

[Black Swan]

AEP at The Telegraph on the money again...

The comments at the foot of the article are even better. Liam Halligan at the Telegraph is v. impressive recently too...

US credit shrinks at Great Depression rate prompting fears of double-dip recession
Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.


US credit shrinks at Great Depression rate prompting fears of double-dip recession - Telegraph

 

[N Rothschild]

surprised attila is still touting inflation being a telegraph reader

 

[Atilla]

surprised attila is still touting inflation being a telegraph reader

Hey dipstick, I can see you missed me but you are cheap piece of ****. You know that already don't you because you feel pretty lousy most of the time. :|

Like a juvenile delinquent the only way you get any attention is by being a bitch.


If you look through T2W posts you will see when utility prices were going through the roof, I said the rise in energy prices were a ploy by this Brown government.

The trick back then was to ease off inflationary pressures by allowing the utilities in effect to tax consumers.

I also predicted there would be a windfall tax on utility profits which will then go into the coffers of the labour party in giving away budget incentives.

This time round majority of the rate drop was due to fall in electricity and gas prices. I suggested this would be the case before the elections which Labour government would claim as their good work.


If you don't start posting some sensible posts you will be going into my ignore list because you are obviously a witless dork and I'm tired giving you attention.

 

[shatztrader]

give him a break - he`s been waiting for the stock market to crash since april

 

[Atilla]

give him a break - he`s been waiting for the stock market to crash since april

Thanks Shatztrader, let's hope his still short on gold too. :cheesy:

 

[N Rothschild]

just cause im waiting for it to crash doesnt mean im short

 

[poborsky]

Everyone seems to think that the emerging economies of China and India will save the world, but the consensus are almost always wrong.

Oh dear you seem to have taken my post completely out of context.

 

[poborsky]

Peter Schiff for Senate 2010

 

[SAINT]

I didn't take your post out of context and wasn't having a go. I realised you were putting a fair point across as China has contributed (I think 70%- can't remember where I read that) towards recent oil demand.

At the moment though, I am watching the U.S. very closely to see if China etc can really continue to grow. Since the start of the credit crisis, around 15 trillion has been wiped from U.S. wealth (according to FED website). The recent articles we are seeing about credit drying up, money supply shrinking, unemployment etc will put a drag on consumers and business, affecting China's exports business. China currently makes 40% of its GDP from exports, so if this starts to dry up then China will have to cut back on spending.

Since the U.S. lifted the gold standard in '71 they have printed trillions of dollars, which China and the rest of the world has benefited from but I feel they might be running out of headroom to continue this. China's GDP is 4 trillion and they have 2 tn of reserves. It sounds a lot but if the US stops printing money and the global economy deflates, China will feel the crunch.

This will expose their inflated stock market and also property (4 Chinese cities are in the top 10 of avg home sales price- how ridiculous is that for a nation with 3000 gdp per capita).

 

[SAINT]

The US will remain in Iraq until 2011 and Afghan battle rages on. This begs the question where is the Pentagon - NASA and the war chest get their money from if not the senate?

Apparently, the U.S. printed lots of money, traded with it's partners and they in turn bought treasuries, which paid for the war.

Russia and China have maybe realised that they were paying for the U.S. to encircle vital world assets in the grand chess game and want out. The alliance of Russia and China with Iran and Venezuela is getting interesting.

I don't think the U.S. wanted to win this invasion and then return. I think they wanted to continue a military presence in the region to keep the area stable. This will include an attack on Iran's nuclear plants, for which deadlines are looming.

 

[Technically Fundamental]

This will include an attack on Iran's nuclear plants, for which deadlines are looming.

No way.

 

[Atilla]

No way.

Some say by the end of the year (Efraim Sneh) .

If you think about the hijacking of the Russian liner by the Israelis they mean business.

More recently White House decided to pursue friendly relations with Russia and ruled againts placement of Star Wars missile shield on Polank and Checkoslovakia.

Who thinks this is horse trading with Russia for permission to attack Iran whilst it stands aside.

Leaves China to produp Iran. China too can be made to switch alliances leaving Iran isolated. At least these may be the plans but war has a habit of trampling over the best laid plans.

I would re-consider your "No way" response if I were you...

 

[poborsky]

I didn't take your post out of context and wasn't having a go. I realised you were putting a fair point across as China has contributed (I think 70%- can't remember where I read that) towards recent oil demand.

At the moment though, I am watching the U.S. very closely to see if China etc can really continue to grow. Since the start of the credit crisis, around 15 trillion has been wiped from U.S. wealth (according to FED website). The recent articles we are seeing about credit drying up, money supply shrinking, unemployment etc will put a drag on consumers and business, affecting China's exports business. China currently makes 40% of its GDP from exports, so if this starts to dry up then China will have to cut back on spending.

Since the U.S. lifted the gold standard in '71 they have printed trillions of dollars, which China and the rest of the world has benefited from but I feel they might be running out of headroom to continue this. China's GDP is 4 trillion and they have 2 tn of reserves. It sounds a lot but if the US stops printing money and the global economy deflates, China will feel the crunch.

This will expose their inflated stock market and also property (4 Chinese cities are in the top 10 of avg home sales price- how ridiculous is that for a nation with 3000 gdp per capita).

Its a complicated subject and we all have different viewpoints. My point about oil and the Asian economies is that they are not yet mature economies and the populations have aspirations to western lifestyles. China and to an extent India already have the industrial infrastructure to provide the goods, car production etc. The demand from two or three billion people is enormous. When the western nations were at the same stage of development, oil demand was growing at 7% p/a in these countries. Now even if this sort of demand is unrealistic given our current economic circumstances, just a 2 or 3% growth will result in a need for extra capacity and I believe that this no longer exists. China have been bringing a new coal fired power station online every few months and that says more demand for fossil fuels and a growing middle class. The world is going to have to deal with a shortage of energy and very high oil prices.

 

[Technically Fundamental]

Looking at that little exchange between you two, it would be interesting to see some figures on wealth distribution in china and india population. You seen how hard it is to get a decent paying job in those countries? Cant really expect to prop up an exporter economy on demand from peasants can you and unless the chinese middle classes have the same attitude towards spending as the west...

 

[SAINT]

That was my take. China has fed off booming exports, using the proceeds for investment (stockpiling commodities being one) but the outlook for China's spending money doesn't look good. It doesn't have the capacity to consume its own goods and I just feel that the western world will not be able to maintain it's consumption levels. Credit and money supply is crumbling in the US and the fed is running out of bullets.

The chinese and indians want a western lifestyle, but what I fear is that most of the west will struggle to maintain a 'western lifestyle'.


On the Iran issue Ahmadinejad talks next week to the UN general assembly and is in bullish mood: Ahmadinejad refuses to rule out weapons - Iran- msnbc.com

Also, the U.S. is facing pressure from home to toughen sanctions or take military action.

It will be a big week because we have the G20 in Pittsburgh also.

 

[poborsky]

The chinese and indians want a western lifestyle, but what I fear is that most of the west will struggle to maintain a 'western lifestyle'.

Agree with this and we will see redistribution of wealth around the globe. The Chinese understand that USD and its world reserve currency status is an obstacle and they will slowly move away from it. When currencies find a reasonable balance then the Chinese consumers will be able to purchase their own goods and financing the western lifestyle through credit will be a thing of the past.

 

[Atilla]

Interesting discussion guys. My view is that whilst I concur the purchasing power of the Indian and Chinese economies may not be up to the levels of Western economies, it will not take them very long to catch up. Perhaps 10-20 years. If we think 2% growth is good they have 7-10%.

European and US popullations are approx 700m perhaps. India and China together are 2000+. Effectively 3 times the market place.

So when it comes to the market place & consumption even though they may not have our levels of GDP they are a major significant force to be reckoned with.

Distribution of income helps but is not a major obstacle to development. It means they will continue to have cheap labour whilst our labour costs remain high.

Finally, a key stumbling block to the globe will ultimately be resources and in particular oil to maintain this level of growth. I can't see oil lasting beyond another 30 years if that. :whistling

But even there as mentioned the West will struggle whilst it will be BAU to India or China...

We are up sheet creak without a paddle...

 

[poborsky]

Non OECD oil consumption 1993; 19 mbd, 2008; 33 mbd.

China has just completed a 60,000 km national highway system:
Expressways of China - Wikipedia, the free encyclopedia

What happens to a super giant oil field after production has peaked:
Cantarell Field - Wikipedia, the free encyclopedia

The giant Ghawar oil field in Saudi Arabia probably went past peak production in 2005. Take a look at the Cantarell graph for details of what happens after peak production.
Ghawar Field - Wikipedia, the free encyclopedia

Official IEA figures put extraction decline in existing oil fields at 6.7%. It is reasonably well accepted that oil extraction capacity in non OPEC nations peaked around 2004. OPEC country reserves and spare capacity are unknown.

 

[SAINT]

On current fundamentals I did a post in 'news/current affairs' called 'ghost ships', you will see that thousands of ships are sitting idle all over the world (not burning fuel). On some of those ships is Chinese exports. On others there is currently 150million barrels of oil approx (two years supply). Governments have also added to stockpiles.

The oil price is moving against the dollar falls and is using the stock market as an indicator of continued demand. Traders are literally hoping for recovery.

Alongside the supply offshore, we are in a deflationary environment. If this gathers pace, the oil price will then match fundamentals and drop to 30 again.

The economy should take the heat out of demand for a few years and maybe green cars and sustainable energy will come in when it recovers. With all this cap and trade, there will surely be a move to reduce car emissions.