Inflation in the US, the cause of it.

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Permalink Reply by Ernesto Giorgi on December 18, 2007 at 8:43am

I think that we are living an asset inflation period. That is, people look at their assets and uses them to get credit, buying assets again. This is a very dangerous spiral.
There is nothing to do now. The Leviatan as broken the chains and it is going on itself: only it will (can) end the situation, perhaps with another 1929. The situation can go on anyway for years.

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Permalink Reply by Ernesto Giorgi on December 18, 2007 at 12:04pm

The article is very very interesting and the Author is very clear. I add another observation which could perhaps be useful: the private debt, that is the families debt is probably very important. There is a secret unconscious agreement (on my opinion) between overseas export in America, government and families. In this way this game to 'dead' is going on, probably waiting and hoping to find a solution different from the recession. For the moment the asiatic countries are exporting in Usa: the money stays there (in Usa), american families buy thr goods and create new debts. This is based on the fact that assets have a relevant values and families in USA believe to be rich. So we should add also the private debt to the public debt to establish some paragon.

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Permalink Reply by Hans D. Baumann on December 19, 2007 at 9:09am

Thanks for your comments. Perhaps one could consider the "internal-family"debt a secondary and non-monetary inflation. H.D.Baumann

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Permalink Reply by Ernesto Giorgi on December 19, 2007 at 10:09am

I am convinced that there is a kind of assets inflation, where families think to be reacher than real. Probably a good part of the stocks' increase is due to this.

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Permalink Reply by Ernesto Giorgi on December 20, 2007 at 4:45am

Another reason that generates inflation can be the continuos uncertainty of currencies. We have now 'two roosters on the walk', Us$ and Euro. We can give here attached a mathematical demonstration that the situation is generating uncertainty. From uncertainty in currencies we can well infer that volatility can be increased. Really this situation will go on. The market partecipants have no more clear points on their mind. This was written on november 27, 2001

Attachments:

• Two roosters on the walk.doc, 49 KB

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Permalink Reply by Hans D. Baumann on December 30, 2007 at 12:45pm

As Ishowed in my attached article. The euro is adjusting almost exactly to the increase in the US public debt, that is the debasement of the US dollar. No surprise here. Hans D. Baumann

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