Saturday, November 29, 2008

Rebound

It would appear to me that the folks at the top are unwittingly giving us squirrelly-prepper types a golden opportunity to store nuts like all get out. Unfortunately, they are all giving us an excellent reason to do the same.

I can't keep track of the amount of money that the government has promised. I think that after two trillion or so, it becomes something of an academic exercise, worthy of the amount of concern necessary to keep the popcorn from burning. All of the money that is flowing into the system is being created from thin air. Hank lends Ben 20 Billion who then turns around and loans 200 Billion (God, I am always so impressed with fractional reserve banking).

TPTB are just trying to head off a deflationary cycle that is just picking up steam. They will succeed, but it will take a little bit of time. But the deflation bus will leave the station, and prices will go down while the deflation part of this cycle plays out. The trouble is that that they will achieve success and that will bring its own punishment.

I figure that between twelve and eighteen months from now, the fruits of their dumping all this money to stop the deflation will bear fruit, and the prices of everything will go through the roof. So at the end of the day, we are talking about a lot of money leaving the system, followed by a butt load of new cash diluting the old cash....welcome to the wonderful world of inflation. That will be an excellent time to have a well filled out prep supply.

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