Comments on: Why Fed Policies and Treasury Department Bailouts Will Lead to Inflation Rather Than Deflation

By: Peter Pablo Delfim

Peter Pablo Delfim — Fri, 18 Feb 2011 02:54:47 +0000

The U.S. needs to make money. Boost the economy. Generate jobs. Lower costs. Sell more. Increase exports. Collect more taxes. Increase profits. Increasing National Wealth. Make people feel confident and happy again. You must go to the big banks. Give money to major banks. Banks lend money to those who want to produce very low interest rates. The large banks will lend much. will have many happy returns. Profit means the return of money to the government. Cash return of all. For the Government lends atravez all of the Grand Banks. All the money the government borrows the big banks are securities backed by the long-term foreign debt has placed on the market and bought by the Government. Large banks may also buy but only with loans from the Government. The bonds will be purchased by 8% to 12% of face value. The lender will then Government of handling all the applications and money from banks and Government itself. The Government will be the financier of much wealth and so will receive an enormous wealth. Does this wealth internally and externally. The titles can be saved because the wealth will then be backed in his own wealth to develop a trajectory in order to expand irreversibly, putting its dependence on the markets.

By: Great Britain - The "Rust Belt" of Global Finance

Great Britain - The "Rust Belt" of Global Finance — Thu, 17 Dec 2009 15:49:19 +0000

[...] of the British pound sterling and a major reorganization of the British economy, and at the cost of an enormous increase in British government debt, the inventive and entrepreneurial British will no doubt find new ways to make a living. In the [...]

By: The "Secret" Investing Strategy That's Your Best Bet For Commodity Profits

The "Secret" Investing Strategy That's Your Best Bet For Commodity Profits — Thu, 09 Jul 2009 10:01:54 +0000

[...] be an excellent hedge against the enormous inflationary pressures that Money Morning has repeatedly warned investors to expect. In this case, the Market Vectors Gold Miners ETF (NYSE: GDX) – composed chiefly of major gold [...]

By: How the Woes of the Wealthy Can Guide You to Global Investing Profits

How the Woes of the Wealthy Can Guide You to Global Investing Profits — Thu, 02 Jul 2009 14:13:13 +0000

[...] from putting all your money in cash and bonds (which will not help if we get high inflation, about the only one of the deadly financial plagues mercifully absent in 2008), The Global Wealth [...]

By: Four Ways to Profit From the Expected Surge in Commodity Prices

Four Ways to Profit From the Expected Surge in Commodity Prices — Wed, 03 Jun 2009 10:01:54 +0000

[...] governments have been much more aggressive in implementing "stimulus" packages, and are running much… than was traditionally thought [...]

By: As Junior Miners Cash in on Soaring Inflation and Growing Global Demand, So Can You

Tue, 12 May 2009 15:28:42 +0000

[...] columns, with U.S. Federal Reserve Chairman Ben S. Bernanke turbo-charging the printing presses, inflation will win out. Make no mistake: Gold and silver are the [...]

By: Why Dividends and Gold Are the Keys to Permanent Wealth

Why Dividends and Gold Are the Keys to Permanent Wealth — Wed, 22 Apr 2009 14:21:53 +0000

[...] Two factors in government policy make me expect a big resurgence in inflation: fiscal policy and monetary policy. Fiscally, U.S. President Barack Obama is running the biggest [...]

By: Three Ways to Profit as Inflation Causes Gold Prices to Increase

Three Ways to Profit as Inflation Causes Gold Prices to Increase — Thu, 16 Apr 2009 15:33:41 +0000

[...] both the unprecedented budget deficits and the very rapid money supply growth point to an inflation rate of perhaps 10% per annum by the middle of 2010. The latest price-and-output figures suggest that any contrary tendency has disappeared. And that [...]

By: With Billions in Bailout Funds Flowing, the “Peso-fication” of the Dollar Continues

Wed, 08 Apr 2009 19:18:49 +0000

[...] that’s nonsense; the explanation is that yields on long-term Treasury bonds have been driven far below their [...]

By: Seven Points to Consider as You Prepare Your Income Tax Return for the April 15 Filing Deadline

Thu, 02 Apr 2009 10:01:01 +0000

[...] also fears that inflation will rear its ugly head in the years to come as the government struggles to raise revenue to retire the newly issued [...]

By: If You Follow the (Smart) Money, Gold is Clearly the Smart Play

If You Follow the (Smart) Money, Gold is Clearly the Smart Play — Sat, 28 Mar 2009 13:30:35 +0000

[...] and Freddie Mac (FRE) mortgage junk. That is essentially a monetization of the debt. And that's a red-carpet invitation for inflationary times (which is also the best time to play [...]

By: Seven Ways to Get an Income-Tax Boost From the Obama Recovery Plan

Seven Ways to Get an Income-Tax Boost From the Obama Recovery Plan — Tue, 17 Mar 2009 15:12:33 +0000

[...] also fears that inflation will rear its ugly head in the years to come as the government struggles to raise revenue to retire the newly issued [...]

By: Federal Reserve Chairman Bernanke Not Yet Worried About Inflation

Federal Reserve Chairman Bernanke Not Yet Worried About Inflation — Thu, 19 Feb 2009 21:55:39 +0000

[...] Money Morning: Why Fed Policies and Treasury Department Bailouts Will Lead to Inflation Rather Than Deflation [...]

By: Jutia Group - Market Jitters & Political Critters

Jutia Group - Market Jitters & Political Critters — Fri, 23 Jan 2009 21:14:34 +0000

By: Jutia Group - Market Jitters & Political Critters

Jutia Group - Market Jitters & Political Critters — Wed, 21 Jan 2009 15:26:27 +0000

[...] lending, and the follow-on $800 billion credit-market stimulus unveiled late last month – will combine with the huge federal budget deficit to spur inflation,” he [...]

By: Big Jump in Food Prices the Latest Suggestion That Inflation is Much Higher Than the Government Says

Wed, 21 Jan 2009 10:05:17 +0000

[...] lending, and the follow-on $800 billion credit-market stimulus unveiled late last month – will combine with the huge federal budget deficit to spur inflation," he [...]

By: Jutia Group - Market Jitters & Political Critters

Jutia Group - Market Jitters & Political Critters — Tue, 20 Jan 2009 15:34:43 +0000

[...] supply increased at over 20% per annum, without worrying about how the tsunami of money creation might affect inflation down the road. A total of $700 billion was earmarked for financial rescue projects, without any clear direction [...]

By: What Shape Will the U.S. Recession Take: U, W or 'Bloody L?'

What Shape Will the U.S. Recession Take: U, W or 'Bloody L?' — Mon, 29 Dec 2008 16:35:04 +0000

[...] supply growth and an extra-deep budget deficit. That is likely to lead to a second downward leg, this time accompanied by unpleasant inflation, as the "hangover" from the excessive stimulus is [...]

By: Jutia Group - Market Jitters & Political Critters

Jutia Group - Market Jitters & Political Critters — Mon, 22 Dec 2008 15:32:08 +0000

[...] intent to do “whatever it takes” to reverse, or at least blunt, the current downturn (even if runaway inflation may be a repercussion down the road); an “Obamanomics” stimulus plan could create new jobs, while enhancing [...]

By: If Holiday Retail Stats Don't Have Economists Saying "Humbug," Tuesday's GDP Report Certainly Will

Mon, 22 Dec 2008 08:43:56 +0000

By: How to Avoid Madoff Mayhem

How to Avoid Madoff Mayhem — Wed, 17 Dec 2008 10:30:26 +0000

[...] even really even surprising that the Ponzi-scheme losses were an enormous $50 billion: After all, 13 years of excessive money creation have allowed bad Wall Street behavior to grow like weeds, so you'd expect the inevitable [...]

By: Inflation – not Deflation – is the Threat, Now Here’s What to do About it | Geiger Index

Tue, 16 Dec 2008 18:04:14 +0000

[...] Money Morning: Why Fed Policies and Treasury Department Bailouts Will Lead to Inflation Rather Than Deflation. [...]

By: Inflation – not Deflation – is the Threat, Now Here’s What to do About it

Tue, 16 Dec 2008 16:20:00 +0000

[...] Money Morning: Why Fed Policies and Treasury Department Bailouts Will Lead to Inflation Rather Than Deflation. [...]

By: Allen

Allen — Sun, 14 Dec 2008 21:50:03 +0000

I have a question that I wonder if any of you more versed in Econ can answer. About deflation vs inflation, I read a case for deflation that stated that with all the bad loans that will never be repaid, companies going bankrupt, that destruction of credit IS deflation: a reduction in available money to pursue goods. I have also heard the argument for inflation that Martin makes in the article. I am unable to reconcile them. Which is it? There is no doubt that credit has been destroyed; there is no doubt that the Fed has been creating liquidity. Is it just a question of which dollar amount is bigger, the negative or the positive?

By: James MacInnis

James MacInnis — Thu, 11 Dec 2008 17:04:35 +0000

In response to Myron Martin's comment; I couldn't agree more. Interest is a tax we pay on the principal of a loan. While the borrower recieves the principle he does not recieve the interest therefore the interest is not a loan.
In addition, Consumption is a function of disposable income. We serve the economy by consuming the goods and services that our neighbors make. Because the principle of a loan was used as disposable income to purchase something of intrinsic value such as a house or a car wealth is created.
However, the borrower must forgo spending that portion of disposable income on goods and services which is required to pay the interest on the debt. Interest payments are debt with no intrinsic value and where government debt increases interest compounds every several years. The agregate effects on the economy of interest payments is visible in the recurring recessions that appear from time to time.
Government should not have to pay interest when it uses its own money supply for sound public investments such as infrastructure, particularly when public investments increase the capital stock and stimulate the creation of wealth in a nation. By deferring complete contol of the money supply to the banks one has to question who runs the country in the first place because in effect the borower is servant to the lender. It should be the other way around; the banks should pay a premium to the people for the right to print money and that could be in the form of interest free loans to fund necessary public investments.
Interest payments should only be charged to the private sector