AI
Wednesday, October 11, 2017 1:48:26 PM
Inflation is doomed now for the same reason it was doomed following 2008.
All modern money is debt, easy debt.
As easy as charging everything bought to credit cards.
As easy as getting a 7 year car loan with deferred 1st payments on a car that will be valued at half its new price or less if ever paid off.
Easy debt that people like Donald Trump love because when the cash flow dries up he can declare chapter 11 time and time again and still be worth billions to leverage into even more debt.
Easy debt like education debt of college students wrote to afford education that goes ridiculously higher every year like it was really worth something in a world where the need for higher education is as imaginary as the as the money created to pay for it. But unlike Donald Trump, when the cash flow runs out or never materializes like its said to do but never does, graduates enslaved to that debt can never declare bankruptcy to escape it.
Easy debt like the margin debt run up to wildly unimaginable levels perhaps never seen before in history in brokerage accounts to buy stocks in indexes at levels never seen before in history.
And then there's the easy mortgage debt, the easy corporate debt, etc, etc, etc. The list goes on and on.
There isn't enough cash flow in all the world to pay off that debt, just like there isn't enough cash flow to provide the earnings to pay it off. And to create more cash flow, more debt has to be created.
And eventually more and more of the debt payments can't be made, because debt that can't be paid won't be paid and then slowly the whole fiasco of growth at any price grinds to a stop and then shifts into reverse, reversing at speeds even faster that all the other debt bubbles in history.
How anyone sees a threat of higher inflation than now in that scenario is beyond me.
But I could be wrong, even though history has shown many times I won't be. Maybe it really will be different this time.
All modern money is debt, easy debt.
As easy as charging everything bought to credit cards.
As easy as getting a 7 year car loan with deferred 1st payments on a car that will be valued at half its new price or less if ever paid off.
Easy debt that people like Donald Trump love because when the cash flow dries up he can declare chapter 11 time and time again and still be worth billions to leverage into even more debt.
Easy debt like education debt of college students wrote to afford education that goes ridiculously higher every year like it was really worth something in a world where the need for higher education is as imaginary as the as the money created to pay for it. But unlike Donald Trump, when the cash flow runs out or never materializes like its said to do but never does, graduates enslaved to that debt can never declare bankruptcy to escape it.
Easy debt like the margin debt run up to wildly unimaginable levels perhaps never seen before in history in brokerage accounts to buy stocks in indexes at levels never seen before in history.
And then there's the easy mortgage debt, the easy corporate debt, etc, etc, etc. The list goes on and on.
There isn't enough cash flow in all the world to pay off that debt, just like there isn't enough cash flow to provide the earnings to pay it off. And to create more cash flow, more debt has to be created.
And eventually more and more of the debt payments can't be made, because debt that can't be paid won't be paid and then slowly the whole fiasco of growth at any price grinds to a stop and then shifts into reverse, reversing at speeds even faster that all the other debt bubbles in history.
How anyone sees a threat of higher inflation than now in that scenario is beyond me.
But I could be wrong, even though history has shown many times I won't be. Maybe it really will be different this time.
Trading or investing without chart analysis is like going to a gunfight armed only with a knife.
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