Debasement creates confusion. Real US silver coins still exist. They sell for $18 for one dollar. We have already had inflation. The price of gasoline in bank debt notes is $3.50 a gallon. The price in silver coins is $3.50 divided by 18 or 19 cents a gallon in real US silver coins. The Dow in real money is 12,000 divided by 18 equals about $700, same as 1963, no progress. It's all currency debasement. Bankers, brokers, owners, governments win. Tax payers lose. Stop debasement now.
He's right, deflation is a terrible danger now. But a much worse danger are the central planners that think that you can or should avoid it. It's simply not possible, the market will get it's way eventually, only the pain will be much much worse for having tried to avoid and delay it.
I'm not an economist but I don't see the "danger" of deflation. We see falling prices in many commodities & stocks but buyers never know when it will hit bottom so they can't & don't simply wait forever. Perhaps the "danger" is that gov'ts & central bankers don't know what to do. But it's not like they've been very effective lately. Prices need to fall until they hit a natural level of support in the market. Deflationary pressures tell us American wages & real estate are over priced.
Deflation is not danger sir. Deflation is the natural course of our economy. If you are sick, you have to take your medicine. You either take it today or you take it a month from now, when you will be feeling much worst. You sir, believe that you can control the natural course of the economy. Just let the damn recession come, and it will go on it's own. The government is the worst organization allocating capital and should focus on basic needs of the nation. Please!!!!
In plain english: This man is saying that goods and services becoming more affordable - is bad.
He thinks people will not spend money, if they think their money will be worth more in the future. And therefore we should all be happy to keep being a slave to our mortgages, see grocery & fuel prices go up, and our standard of living decreasing. AS LONG AS PRICES DONT FALL.
In plain english: This man is saying that goods and services becoming more affordable - is bad.
He thinks people will not spend money, if they think their money will be worth more in the future. And therefore we should all be happy to keep being a slave to our mortgages, see grocery & fuel prices go up, and our standard of living decreasing. AS LONG AS PRICES DONT FALL.
I can't recall one country that would have had high industrial output, low unemployment and faced hyperinflation. The most usuall causes for high or hyperinflation is acctually, much debt, high unemployment and large defficit spending.
@Warzoooooo actually hyperinflation is not caused by high unempyloment (as the phillps curve states that high unemployment leadds to low inflation) but hyperinflation is cuased by quanative easing programme gone out of control as pumping too much money into the economy reduesed the value of the curreny creatring import inflation
@superking445 Ofcourse, inflation is the expansion of money in the market. But what I was refering to was that I couldnt recall a situation ever where there have been alot of inflation that would have led to hyperinflation while industrial output is high and unemployment low. And thats because everything within the society is moving along quite quickly. Most think hyperinflation can't happen with high unemploment. Its acctually one of the common thing every hyperinflation got with each other.
@superking445 You are right and wrong at the same time. There is MUCH MUCH MUCH MUCH more credit than money supply in the system. That credit is contracting much faster than the Fed can print (QE). This is deflation and this will happen for years to come. This is exactly what the government is trying to avoid, deflation.
He makes a good point at the end though. No matter how much money you print, if you can´t get people to use it or banks to loan it, then it is deflation all the way. If I see my dollars appreciate, why would I use them? I will save them. If banks make money by lending to the fed, risk free why would they lend it to people with 9.9% unemployment and raising? they will keep it in their vaults. Those are facts that nobody can argue against.
@bizwiz21 Deflation as a result of a contraction in the money supply is a bad thing. I didn't watch this vid, so I don't know if he mentioned this, but probably the biggest problem with deflation is how it makes debt less manageable. Less manageable debt leads to more defaults on mortgages, which then leads to more unstable financial institutions. And I think, or at least I hope, we both understand how dangerous weak financial institutions.
Another stock market apologist? We're all just breeding stock on a slave market. We will never be free from debt and manipulation as long as we remain the borrowers of the copyright holders on the Fiat currencies.
They can buy or sell a countries currency forcing booms and busts at will. The people have no control, they are fully controlled in most nations now. A few western countries can't put you down like a red headed Chinese protester but it's coming & it will be soon
What? This guy is a Professor and does not understand basic economics. Diluting the value of money by printing more of it IS INFLATION. Dont believe this people. Inflation is 100% caused by governments and central banks printing money. Thats it. Inflation is here, but often its impact is delayed. Inflation is coming in a big way to America in the next few years. Dont believe these so called experts. Buy gold. Sell US dollars. You will be fine.
Mr. Winter, why are falling prices i.e. is falling demand bad. This only is true if one considers that only growth is good. It further assumes that pushing something by a central agency i.e. Central Bank is a good thing. With all due respect, where do you get this assumption from. But please don't fall into the trap and bother me with Keynesian economics. Your assumed growth ideology has brought us the mess we are in as well as the current ecological disaster.Please stop this madness!
Deflation in the housing market is not a bad thing. The proportion of discretionary spending on housing has increased relatively compared to all other spending and is way out of hand. Of course policies directed towards housing created such disproportionate increases. A return to sanity is welcome.
Despite this, the house as a credit card no longer exists. This lack of equity takes means less overall spending. This means that demand for all other goods will remain low.
When a home owner loses their job, they will sell at a lower price to not get foreclosed on. This causes downward pressure on Real Estate (deflation). Although I do believe that we are in an inflationary upleg that will last another decade, I do believe that the deflation in Real Estate and spendable income will cause that inflation to be mild well into next decade (This is a repeat of the first half of the 1970's).
But wait... you are talking about price deflation on the one hand, and monetary Inflation on the other. While in some areas, they offset one another, having BOTH simultaneously is worse than just having the price deflation by itself. And the low-interest rates caused the initial inflation in housing (and autos), then when that busts, we just accelerate the inflation everywhere else to compensate? Apparently we're not going to recognize the unsustainability of this until a currency-crash.
again. The main arguement for hyperinflation was missed by this man. Our government is broke, we all know that. They don't have the money to pay the debts now, and they wont in the coming years as tax revenue continues to drop, their only hope is to monetize the debt. When this happens the interest on the debt goes up which requires further monitization of the debt which ultimately gets us hyperinflation. Lets remember that our government WILL create inflation. Period!
You all need to start watching Peter Schiff. Deflation is exactly what our country needs to return us to a more sound economic model. The idea that we need people to spend money to get things moving is rediculous. We need people to start producing real goods that can be exported. The only way we can dig out of this recession is to become producers, not consumers. 70% of our economy is based on consumers spending borrowed money. If deflation occurs it will force us to become producers
Yes, and as an intermediate step, Americans need to SAVE. With this savings, people will THEN be able to build the productive capacity that allows us to become producers again. If there is something that prevents Americans from saving, it needs to be removed. The entire inflation regime of the Fed and fractional-reserve banking has destroyed savings in America. Even when I WANT to save, I can't just put my money in a bank and watch it grow. I have to become an international investor!! Why??
@thane17 i noticed you just said that deflation is needed to keep the economy going however you are completely wrong as deflation is really harmful to the economy as once deflation occurs with prices going down consumer spending and invstment by firms reduces significantly as in economics as economics agents think in thier own selfinteret during deflation they decided to curb thier spenign at all as they wait for prices to go down further as a result the two main compnets of AD reduce casu reces
@thane17 Your point is well made. I bought an 18 speed bicycle last week, made in China, shipped 10K miles, purchased by WM who then marked up the price for profit and paid someone to assemble. On sale price $79. I was an industrial engineer, could not set up a shop to compete under any imaginable circumstance. I doubt if I could buy the raw materials alone much less manufacture and ship a bicycle accross town for $79 and turn a profit. Is anyone minding the store in Washington? Regards
I totally agree with this guy except for one thing. No where among modern economists do I find an admission that stagnant wages is what led to the increased use of credit, which is what led to the current situation. Trade policy is at the core of all this. As long as we have stagnant wages, banks won't lend and as long as banks don't lend, we'll never get out of the situation.
yes I 100% agree. Loss of jobs will mean no spending because of no money, But why dont the Gov get the money into the hands of the people directly? Are they pretending to fight deflation but actually want it so all assets fall to 0 and then their friends can buy up the assets at 99% off?
Debasement creates confusion. Real US silver coins still exist. They sell for $18 for one dollar. We have already had inflation. The price of gasoline in bank debt notes is $3.50 a gallon. The price in silver coins is $3.50 divided by 18 or 19 cents a gallon in real US silver coins. The Dow in real money is 12,000 divided by 18 equals about $700, same as 1963, no progress. It's all currency debasement. Bankers, brokers, owners, governments win. Tax payers lose. Stop debasement now.
jackgoldman1 1 month ago
I don't trust economists who think that inflation is higher prices. Inflation is creating more money which LEADS to higher prices.
BarrySlisk 7 months ago
@jaguarclaw
What difference does it make? Money is money. More of it is inflation and causes rising prices.
BarrySlisk 7 months ago
This is a load of bullocks.
Deflation is what is needed. Prices of everything needs to fall to affordable levels.
orangedac 9 months ago
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FatReleaseSystem 11 months ago
He's right, deflation is a terrible danger now. But a much worse danger are the central planners that think that you can or should avoid it. It's simply not possible, the market will get it's way eventually, only the pain will be much much worse for having tried to avoid and delay it.
svenp 1 year ago
I'm seeing inflation everywhere I go. Almost hyper-inflation. My costs have doubled in the past 2 years. What is deflation? Asset values dropping?
caganb 1 year ago
@caganb
at what percentage would you say constitute hyperinflation.
AntiVenomFangX 1 year ago
@AntiVenomFangX 20% a year. I'm seeing that much already
caganb 1 year ago
@caganb
where is inflation at 20% let alone going up 20% a year? is this in america?
plus you need 3 consecutive years of about 25% for it to be considered hyperinfation, but im still curious where this is going on.
AntiVenomFangX 1 year ago
Human nature, not central banks, will ultimately be what stops deflation. People want.
sassylassy526 1 year ago
I'm not an economist but I don't see the "danger" of deflation. We see falling prices in many commodities & stocks but buyers never know when it will hit bottom so they can't & don't simply wait forever. Perhaps the "danger" is that gov'ts & central bankers don't know what to do. But it's not like they've been very effective lately. Prices need to fall until they hit a natural level of support in the market. Deflationary pressures tell us American wages & real estate are over priced.
alc99 1 year ago
Deflation is not danger sir. Deflation is the natural course of our economy. If you are sick, you have to take your medicine. You either take it today or you take it a month from now, when you will be feeling much worst. You sir, believe that you can control the natural course of the economy. Just let the damn recession come, and it will go on it's own. The government is the worst organization allocating capital and should focus on basic needs of the nation. Please!!!!
dannydarias1 1 year ago 2
In plain english: This man is saying that goods and services becoming more affordable - is bad.
He thinks people will not spend money, if they think their money will be worth more in the future. And therefore we should all be happy to keep being a slave to our mortgages, see grocery & fuel prices go up, and our standard of living decreasing. AS LONG AS PRICES DONT FALL.
What a clown.
imre1000 1 year ago
In plain english: This man is saying that goods and services becoming more affordable - is bad.
He thinks people will not spend money, if they think their money will be worth more in the future. And therefore we should all be happy to keep being a slave to our mortgages, see grocery & fuel prices go up, and our standard of living decreasing. AS LONG AS PRICES DONT FALL.
What a clown.
imre1000 1 year ago
I can't recall one country that would have had high industrial output, low unemployment and faced hyperinflation. The most usuall causes for high or hyperinflation is acctually, much debt, high unemployment and large defficit spending.
Warzoooooo 1 year ago
@Warzoooooo actually hyperinflation is not caused by high unempyloment (as the phillps curve states that high unemployment leadds to low inflation) but hyperinflation is cuased by quanative easing programme gone out of control as pumping too much money into the economy reduesed the value of the curreny creatring import inflation
superking445 1 year ago
@superking445 Ofcourse, inflation is the expansion of money in the market. But what I was refering to was that I couldnt recall a situation ever where there have been alot of inflation that would have led to hyperinflation while industrial output is high and unemployment low. And thats because everything within the society is moving along quite quickly. Most think hyperinflation can't happen with high unemploment. Its acctually one of the common thing every hyperinflation got with each other.
Warzoooooo 1 year ago
@superking445 You are right and wrong at the same time. There is MUCH MUCH MUCH MUCH more credit than money supply in the system. That credit is contracting much faster than the Fed can print (QE). This is deflation and this will happen for years to come. This is exactly what the government is trying to avoid, deflation.
dannydarias1 1 year ago
He makes a good point at the end though. No matter how much money you print, if you can´t get people to use it or banks to loan it, then it is deflation all the way. If I see my dollars appreciate, why would I use them? I will save them. If banks make money by lending to the fed, risk free why would they lend it to people with 9.9% unemployment and raising? they will keep it in their vaults. Those are facts that nobody can argue against.
haveabeer123 1 year ago
hell inflation is all ready a problem
comebigarestayathome 1 year ago
As Peter Schiff says- is deflation in the price of technology a bad thing?
I think those who worry about deflation are off their rockers.
Wharton needs an Austrian economist...or maybe even an Australian one.
bizwiz21 1 year ago
@bizwiz21 Deflation as a result of a contraction in the money supply is a bad thing. I didn't watch this vid, so I don't know if he mentioned this, but probably the biggest problem with deflation is how it makes debt less manageable. Less manageable debt leads to more defaults on mortgages, which then leads to more unstable financial institutions. And I think, or at least I hope, we both understand how dangerous weak financial institutions.
keynesian42 1 year ago
Another stock market apologist? We're all just breeding stock on a slave market. We will never be free from debt and manipulation as long as we remain the borrowers of the copyright holders on the Fiat currencies.
They can buy or sell a countries currency forcing booms and busts at will. The people have no control, they are fully controlled in most nations now. A few western countries can't put you down like a red headed Chinese protester but it's coming & it will be soon
Don't beLIEve experts
Slavestorms 2 years ago
Professor Wynter...you are an idiot.
deanclkclk 2 years ago
What? This guy is a Professor and does not understand basic economics. Diluting the value of money by printing more of it IS INFLATION. Dont believe this people. Inflation is 100% caused by governments and central banks printing money. Thats it. Inflation is here, but often its impact is delayed. Inflation is coming in a big way to America in the next few years. Dont believe these so called experts. Buy gold. Sell US dollars. You will be fine.
neoarab 2 years ago
Mr. Winter, why are falling prices i.e. is falling demand bad. This only is true if one considers that only growth is good. It further assumes that pushing something by a central agency i.e. Central Bank is a good thing. With all due respect, where do you get this assumption from. But please don't fall into the trap and bother me with Keynesian economics. Your assumed growth ideology has brought us the mess we are in as well as the current ecological disaster.Please stop this madness!
danben72 2 years ago
Deflation in the housing market is not a bad thing. The proportion of discretionary spending on housing has increased relatively compared to all other spending and is way out of hand. Of course policies directed towards housing created such disproportionate increases. A return to sanity is welcome.
Despite this, the house as a credit card no longer exists. This lack of equity takes means less overall spending. This means that demand for all other goods will remain low.
updownleftrightinout 2 years ago 2
When a home owner loses their job, they will sell at a lower price to not get foreclosed on. This causes downward pressure on Real Estate (deflation). Although I do believe that we are in an inflationary upleg that will last another decade, I do believe that the deflation in Real Estate and spendable income will cause that inflation to be mild well into next decade (This is a repeat of the first half of the 1970's).
MrAlanKendall 2 years ago
But wait... you are talking about price deflation on the one hand, and monetary Inflation on the other. While in some areas, they offset one another, having BOTH simultaneously is worse than just having the price deflation by itself. And the low-interest rates caused the initial inflation in housing (and autos), then when that busts, we just accelerate the inflation everywhere else to compensate? Apparently we're not going to recognize the unsustainability of this until a currency-crash.
Jaycephus01 2 years ago
again. The main arguement for hyperinflation was missed by this man. Our government is broke, we all know that. They don't have the money to pay the debts now, and they wont in the coming years as tax revenue continues to drop, their only hope is to monetize the debt. When this happens the interest on the debt goes up which requires further monitization of the debt which ultimately gets us hyperinflation. Lets remember that our government WILL create inflation. Period!
thane17 2 years ago 2
You all need to start watching Peter Schiff. Deflation is exactly what our country needs to return us to a more sound economic model. The idea that we need people to spend money to get things moving is rediculous. We need people to start producing real goods that can be exported. The only way we can dig out of this recession is to become producers, not consumers. 70% of our economy is based on consumers spending borrowed money. If deflation occurs it will force us to become producers
thane17 2 years ago 12
Yes, and as an intermediate step, Americans need to SAVE. With this savings, people will THEN be able to build the productive capacity that allows us to become producers again. If there is something that prevents Americans from saving, it needs to be removed. The entire inflation regime of the Fed and fractional-reserve banking has destroyed savings in America. Even when I WANT to save, I can't just put my money in a bank and watch it grow. I have to become an international investor!! Why??
Jaycephus01 2 years ago
@thane17 i noticed you just said that deflation is needed to keep the economy going however you are completely wrong as deflation is really harmful to the economy as once deflation occurs with prices going down consumer spending and invstment by firms reduces significantly as in economics as economics agents think in thier own selfinteret during deflation they decided to curb thier spenign at all as they wait for prices to go down further as a result the two main compnets of AD reduce casu reces
superking445 1 year ago
@thane17 Your point is well made. I bought an 18 speed bicycle last week, made in China, shipped 10K miles, purchased by WM who then marked up the price for profit and paid someone to assemble. On sale price $79. I was an industrial engineer, could not set up a shop to compete under any imaginable circumstance. I doubt if I could buy the raw materials alone much less manufacture and ship a bicycle accross town for $79 and turn a profit. Is anyone minding the store in Washington? Regards
1Skeptik1 1 year ago
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@thane17 Peter Schiff is a moron. Don't watch him, it will make you dumber.
ironicdialogue 3 months ago
I totally agree with this guy except for one thing. No where among modern economists do I find an admission that stagnant wages is what led to the increased use of credit, which is what led to the current situation. Trade policy is at the core of all this. As long as we have stagnant wages, banks won't lend and as long as banks don't lend, we'll never get out of the situation.
JohnnyLion66 2 years ago
Keynesian
croemar 2 years ago 2
Yep. How's that working out?
Capnwabbit 2 years ago 3
yes I 100% agree. Loss of jobs will mean no spending because of no money, But why dont the Gov get the money into the hands of the people directly? Are they pretending to fight deflation but actually want it so all assets fall to 0 and then their friends can buy up the assets at 99% off?
martialarm 2 years ago 2