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SW Ontario | I read the articles and this thread and enjoyed it thoroughly. Central bank driven macro economics is currently the main driver of almost all the micro economies within the general economy, including agriculture. That is what makes me come back to read these threads. What agricultural commodity prices will be 6 or 12 months from now hinges greatly on future central bank decisions so anybody with an interest in marketing should pay attention.
This is the first time I have read the theories of Armstrong and he seems to have immense knowledge on how curriencies function, succeed, and ultimately fail. He draws great parallels to Roman times and gives indicators about possible timing. According to him, lots of things must first happen before the USD fails so it will happen later rather than sooner.
Where I lose him is when he discusses Demand driving both inflation and deflation. In my opinion, the current state of affairs has nothing to do with demand. Demand is always present within the economy. If you offer me a new car or trip to Hawaii for 100 dollars, I will gladly take it. It does not require Einstein theory to understand that over the last half century, we have had consumption driven primarily by debt expansion. The system is now levered up to its maximum and going forward, more consumption won't happen by simply creating more debt. It is very much a supply issue of real money; nothing to do with demand in my opinion. A deleveraging must eventually occur; we can then start producing real wealth again so that credit expansion and associated consumption can once again occur.
So I have to agree with both Old MacDonald and John who have stated that there are only two eventual outcomes; massive deflation or hyperinflation and currency destruction. I would choose the former because the currency would likely remain intact after all is said and done. Our central banking friends currently have other plans so I guess I should be jumping on that bandwagon. | |
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John - inflation/deflation - probably one after the other
