Topic: The Great Reflation Is Underway - page 2. (Read 911 times)

Well, think of gold.  Gold and silver are deflationary, right?   But for about 90% of the modern age, the elites didn't suppress, but used gold and silver to enhance their ability to issue promises that gave them their power and wealth.

You can use a state-free money to lend trust to your issued money, if the combination of how much you own, how much the state-free money is trusted, what the current exchange rates are, and how much debt you have outstanding is right.

In fact, it may well be that the 10% of modern history that used totally fiat money is the one that must be abandoned, from the elites' point of view.  Most economists have tried to praise fiat money (and remember they praised the gold standard, when that was in effect -- both times saying just what the elites want/wanted them to say.)  Ultimately, though, it may well be that the fiat experiment was doomed to fail from day one.

How do you get inflation, which you need, out of a deflationary money?  By changing the parameters of that combination above.  (Good chance Bitcoin will go up a lot!)

Interesting...

For sure, the beginning of the cycle is the most free-market and democracy based society.  (We want the world to lend us their money, right?)  Things go downhill from there, if not by design, then as a clear consequence of the design.


Thank you.  That is good.  I too have a feeling happiness is related to being connected and trusted.  When you have a society whose core nature is deception, you can see how that might be a problem.

It is never that far away and it will always happen, well for quite some time. People follow the rumors and the fear and drop and run, but not the big boys and not the ones that make the markets hum, that is where the price gets most of its power and it is a great thing. No need to worry, speed bumps here and there and the rest is smooth sailing.

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In my mind there is little doubt that The Elite want more and more.  And they can (and do) rig the system to their benefit.

I have no idea how big the role the Elite plays in Bitcoin, but I do accept the idea that they are buying it on a larger sale than is realized.

Yet, the Elite NEED the rest of us, if "they" destroy the 90% (as per rumors re "Georgia Guidestones"), then they lose their comfortable lives...

IMO the best we can do is to stay alert and diversified in our savings.  BTC has a real role to play, as does gold, among other investments.

If the so called elites are buying bitcoin instead of banning it, it just makes already rich bitcoin whales (which have pro-crypto agendas) richer. The amount of BTC they would need to buy is simply too high.

They can't do that much beyond causing price crashes with bans, and we already saw how that played out for China. We are about to hit an all time high after China basically banned all exchanges, think about that again.

All they can do with bans is temporal price crashes which will get bought up again, restoring confidence since the more times bitcoin resurges after bans, the less effective said bans are. This is why the market has not reacted at all at the South Korean ICO ban and Swiss ICO ban. Once you do it once, the next time is not interesting for the market, so the next time exchanges are banned somewhere else, it will be the same. You simply can't stop this at this point, pandora's box has been opened. Get in and get yourself a strong bitcoin position or be lefit behind, no other options.

Interesting that you would call it that lol. I hear that it's a deflationary currency and will be balancing out the debt that is currently circulating in US dollars.

Your post was very quickly buried by spammers inhabiting this section. They appear to bury attempts at intelligent discussion here almost as if they receive a lifetime achievement award for it. I try to reply only to posts with less than 100 responses on pages 2, 3, 4, etc. That seems to help.


I think at the beginning of the state-driven financial inflation cycle in the united states around 1913 when income taxes were passed...  All americans were taxed @ 1% of income. The wealthy were taxed @ 6% of income.

That could explain why the beginning of inflation cycles are prosperous. As time passes and taxes are hiked 50% to 70% of income it has a strangling effect upon an economy and everyday life. There are massive diminishing returns for every $1 taxed.

Trump's initial proposal, reducing income taxes and the corporate tax may be the only opportunity we have to escape the state's insistence on attempting to tax its way into prosperity.


Here is an interesting piece done on that very topic, if you ever feel like reading. 


Good overview.

I don't understand why the wealthy bother monetizing their already impressive holdings. Many of them don't do seem to do much with the wealth they have other than buy overpriced junk.  

I totally understand, 9 long years after the global financial crisis, the elites just can't seem to get inflation going.  Every time there's any sign of it, the hope is quickly crushed.

Or so they say...  The truth is that the elites can *always* get inflation if they want it.  All they have to do is print money and issue public debt until they get the inflation.  So it's a matter of 'won't' rather than 'can't.'

So why such a low inflation?  The elites understand trust in their money is low after the financial crisis.  So they keep their stimulus as low as possible, so long as the economic pain doesn't threaten their power.  It has been this way since the dawn of the modern age.  When assets inflate, everyone benefits, and the elites most of all.  When assets crash, ordinary people suffer most.

The only way to have inflation but keep their monetary power is to have a one-time devaluation against gold (or whatever today's flexible, derivative-trading-based equivalent is.)  Their state money will be stable at the new price of gold, if they devalue big enough.  But the problem would be, of course, people will start thinking, if there is 'one-time', there might be a 'next-time' whether the elites want to or not.  So they won't want to devalue against gold except as a last resort.

But here come cryptocurrencies.  A 'devaluation' against cryptos can be sold as simply the emergence of a widely popular new money.  Then the elites can have their cake and eat it too.  As I said, it's a perfect plan.

There is a certain amount to be said for owning revenue generating property in whatever guise it comes. If that is in the form of fiat money that inflates away over time in a predictabe way that works, the tricky part is when confidence is lost - see Zimbabwe for example. BTC is not immune from crisis in confidence either, but the benefit it does have is transparent operation and supply. Nobody can suddenly introduce another 21,000,000 out of a hat.

Real land, goods producing companies and factories, and service companies are also good bets.

Reflation is hard to exist in the economy. If it happens, as you mentioned, bonds and cash will be very very weak after all and people will be seeking another options. This is the BTC!

Which assets will do well *after* everyone knows about the reflation?

Obviously, bonds and cash will do poorly, unless you buy bonds when people are over-dumping them, and you hope for an end to the inflation soon.  Bank interest will go up.

Stocks and real estate should do well, as these represent a piece of limited-supply real wealth in a growing economy.

Bitcoin and gold will stagnate after reaching a very high value (very high at least in the case of Bitcoin.)  This is a major part of the final goal of the entire exercise, and this is probably what the elites will get.

So what will be the consequences of reflation?

We'll see high inflation for a while, but probably lower in the US than in Europe and Japan.  We'll also see good job and economic growth, and lots of stimulus and redistribution to the poor from governments and central banks to keep social tension low.

So, young and working people will do well.  Savers and retirees will lose a lot of their savings' value.  This should be expected from what is, essentially, a partial default on past debt via inflation.

The world should enjoy more peace, as the Western elites won't have much need to use conflicts and wars to make countries support their financial assets.

In a word, it will be the great reset.

Thank you for being a lone reply!  I'm not sure how I come across, but certainly my thinking is more nuanced than my writing in most cases, as you can only fit so much into something people will read.

Certainly financial wealth is not worthless.  At the beginning of the state-driven financial inflation cycle, it is, objectively speaking, usually quite conducive to growth and prosperity.  It's only gradually, as time goes on, that the distortions really kick in, requiring deception to keep the system afloat, and where these efforts become destructive.


It could be a version of that 'comparative advantage' thing...  The US does a good and cheap job at 'manufacturing' money and financial assets.  The emerging markets do so with real goods.  So they take our money and we take their goods.  This is classic 'free trade' and works as long as no one thinks about how much more financial wealth exists than real wealth, at current prices.


This has been the case throughout modern history.  Plus, the modern state-bank alliance is good at dividing the world public into groups and giving each an appropriate share of the loot, to keep them quiet.  The British and American populations were big beneficiaries at the early stages of their respective empires.  (And so are Bitcoin holders today!)

But, trust me, all of this 'benefit' will come back to bite the 'beneficiaries.'  Including members of the elites themselves.  There's got to be an immutable law somewhere, that says we lose happiness, the more we live apart from reality and from fairness with each other.  Of this, I can't spell out a proof, but I have a strong feeling this is the case.


Jamie Dimon may just be trying to cool the Bitcoin market a bit.  He said the same thing when Bitcoin was in the low hundreds.

The major signs I see of elite promotion of cryptos are:

- The price rise.  This speaks volumes when the elites could have killed it with laws.

- The unknown buyer of cryptos shelling out $60 million at a time, over months.  What private entity would put that kind of funds at risk?

- The BIS ('central bank of central banks') recent release of the 'new taxonomy of money' where state money is no longer solely legitimate as today's economists like to say.  Instead, a plethora of monetary forms are recognized, including precious metals and cryptos.  Most significantly, it states that state-issued cryptos won't compete with non-state cryptos by trying to be limited-supply.

- In the political sphere, the disappearance of talk about Bitcoin being a crime-enabler and the need to tighten control over it.  The appearance (in a small way) of proposals to help cryptos.

- The SEC's quick response to the need to control the proliferation of ICOs.

- Between an essay by an ex-central-banker from South Africa and the ECB's recent announcement, it's pretty clear that the Western elites are going to adopt the narrative that cryptos' rise is simply due to market demand, and that authorities won't and shouldn't interfere.  This sounds morally impeccable, but is highly misleading as a description of reality.  Of course, it will benefit cryptos.

There's a very human tendency to define conceptual abstracts in terms of polar inverse opposites.

Light and dark. Good and evil. Black and white. Love and hate. Moral and immoral.

Its not for me to say if your depiction of "real wealth" versus "financial wealth" fits into a dualistic abstract framework.

Many have said the united states has not had real economic growth in at least a decade. The rationalize circumstances such that the financial and real estate sectors growing do not represent true economic growth. Others view derivatives and overprinting of money as not representing real wealth or value. I think you might be on to something with "fake wealth" being redefined to represent "true wealth". There may be some misinformation campaigns in place to leverage a publics collective lack of knowledge and education.

The publicity campaign against bitcoin and crypto could represent one of said campaigns.

Money, debt, and finance can get as complicated as you want.  But they can also be stunningly simple when looked at the right way.  And I like simple.
 
Basically, you have real wealth and financial wealth.  Real wealth is made up of goods, services, infrastructure, knowledge, etc.  Financial wealth is the various tickets that are claims on real wealth: money, bonds, stocks, derivatives, etc.
 
Over the modern centuries, top politicians and bankers have tended to issue too much financial wealth for the real wealth available.  To prevent a collapse of savers' confidence in the financial wealth, power and deception are used to prop up its value.  One of the favorites is somehow to keep the price of goods and services low by concentrating financial wealth.  As long as not all the dollars chase goods at the same time, all the saved dollars can appear to be still valuable.
 
At this point, the elites can play all kinds of tricks to keep this game afloat, for a while, but ultimately, the only way to true stability is to let prices rise.  When prices go up, the values of the financial wealth and real wealth will be more equal.  Real faith will return to the financial wealth, and the elites can go back to issuing more of it without worry.
 
The only problem with inflation, though, is that the public will lose faith in state-issued money.  This is the reason why the elites have tried not to resort to inflation until the last possible minute.  Helicopter money hasn't come, yet.

Enter cryptocurrencies.  If the elites can get the public to believe in crypto as a decentralized, limited-quantity money, then they can feel free to create inflation by issuing more money and debt: the normally embarrassing depreciation of state-issued money against non-state-issued money as a result of the inflation will be described by central banks and the media as free-market demand for a new type of money.  Crypto will help limit the demand for gold and silver, whose appreciation will be embarrassing.  And the state-issued money will be stable at the new 'exchange rate,' since the elites are likely buying up many bitcoins now to prepare for future suppression of Bitcoin's rise.

Imagine late 19th century central banks suddenly receiving a lot of gold from heaven, and you have almost the right picture.  Just that they have to first convince the public that this is gold.

This being a perfect play for the elites, plus the many observations in support of this story in recent months and years, we really have to consider the good chance that the Great Reflation is underway as we speak.