# Deflation Warning



## Ripon (Dec 22, 2012)

When I see oil collapse over 10% in one day my hackles of concern about deflation get raised. Our housing prices have bubbled up, our free money era is over (little or no more QE), PMs are at 5 year lows. Wages aren't up, spending is increasing and that means consumer debt on the rise. People will find money harder to get. Euro, Yuan, and Ruble are in tank city......not a good thing. I know people don't want to be caught with lots of worthless paper but having some won't kill ya.


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## Maine-Marine (Mar 7, 2014)

AND... the stock market is up - BASED ON WHAT... most companies are not making more money or growing... 

My best year in the market I made over $35,000... I would not buy stock today for any reason..

We have had a Depression here before that seemed to catch many by surprise... I see it happening again


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## Inor (Mar 22, 2013)

I has to happen sooner or later to get the value or assets back in line with the value of consumables...


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## Smitty901 (Nov 16, 2012)

Simple company I work for cut 6000 jobs when Obama was reelected. They doubled their stock price on hype, a day of reckoning is coming


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## Camel923 (Aug 13, 2014)

I've been thinking we need a correction for a LONG TIME! I am somewhat amazed it has not happened yet. Other currencies are in worse shape and being the World's reserve currency has spared us so far in my opinion.


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## Old SF Guy (Dec 15, 2013)

You guys know darn well that the Fed will continue to prop up the economy for the next two years and then it will collapse and the Dems will blame it on the GOP house and senate control and policies or lack of movement of Obamas because of the same GOP held congress. Hillary wil win and Dems will get both house and senate because of it...UNLESS the GOP forces the true numbers to come out in the first year and explain why it has held so long in the face of numbers that would otherwise indicate the opposite should have been occurring...but lies and obfuscation has hidden it from the public.


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## Old SF Guy (Dec 15, 2013)

Again....highest unemployment or lack of participation in decades...more handouts than ever, less GDP, but everything looks great???? what are we missing here...oh wait....yeah...reality.


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## Camel923 (Aug 13, 2014)

That nailed it.


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## alterego (Jan 27, 2013)

Boy silver took an ass kicking today.
Commodities across the board really.


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## bernzzii (Jan 21, 2014)

Camel923 said:


> I've been thinking we need a correction for a LONG TIME! I am somewhat amazed it has not happened yet. Other currencies are in worse shape and being the World's reserve currency has spared us so far in my opinion.


Been thinking this for some time. I have not been around but i feel like times are worse than they are in the last recession. And I feel that as a nation over all we were better off during the last depression. Least then citizens overall we more able to handle hard times and adapt. Now, me included, I feel like we don't know enough to survive everyday challenges without our technology telling us what do do. Been trying to prep but I'm worried I've been ignorant for far too long...


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## Old SF Guy (Dec 15, 2013)

alterego said:


> Boy silver took an ass kicking today.
> Commodities across the board really.


Yeah...as soon as you hear them start to advertise.."Buy Gold or SIlver" on the radio and TV...The market is starting to cap out and folks are getting ready to gladly sell their gold to us commoners at the highest market prices before it goes down again. That's why I never buy gold when they are telling me to buy Gold...I mean ...really do you think they are really trying to help you get rich?


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## Smitty901 (Nov 16, 2012)

Not saying it will come to this. But if we have a total SHTF collapse of the economy, has Ferguson given you any hints of what is coming this time


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## Maine-Marine (Mar 7, 2014)

Smitty901 said:


> Not saying it will come to this. But if we have a total SHTF collapse of the economy, has Ferguson given you any hints of what is coming this time


Government can not longer pay its bills, obligations, or hand outs...

We will see a few things... these are not in order

violence in cities will cause truckers to refuse to deliver goods food/fuel
Guard or active military may have to block some roads to stop looting
fuel shortages - if government does not prioritize farms..crops will rot in the fields
Food prices will rise
public services will stop as workers can not get paid and stay home
flu/or other pandemic will start in larger cities
some towns will block roads in 
price controls will start but be unsuccessful and cause more problems

The big question is...what TRIGGER will we see that will make us realize it is time to buy those last minute things and get rid of the soon to be worthless dollars


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## bigdogbuc (Mar 23, 2012)

As sick to my stomach as it makes me, everyone knows that useless piece of shit Hillary is going to be the next president right? Unless a miracle happens. Like her death.


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## OC40 (Sep 16, 2014)

bigdogbuc said:


> As sick to my stomach as it makes me, everyone knows that useless piece of shit Hillary is going to be the next president right? Unless a miracle happens. Like her death.


I don't think that is going to happen, a year ago sure but now with 300K speeches & "I'm not rich" comments... she is sounding more detached than ... well you know.


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## Diver (Nov 22, 2014)

As I read this thread, I see a bunch of comments that posters expect deflation. Then I see other posters making comments that seem to expect inflation. Some of the advice provided is contrary to the predictions offered. Other than expecting dire consequences (expected on a prepper forum) you all are inconsistent.

Deflation: dropping prices. Cash is king. You want cash to be able to use on cheaper goods at a later date. Oil and commodity prices are in a deflationary trend at the moment, but this has not shown up in broader price indexes.

Inflation: rising prices. Cash is declining and you want to minimize cash holding in favor of hard assets, e.g. PMs, real estate, etc. Broad inflation indexes have shown low inflation numbers for the past 5 years.

The stock market was mentioned because there hasn't been a correction. The reason there hasn't been a correction is because there are no alternatives. If you pull your money out, where are you going to put it? Also, companies have been making money even though they have not been employing more people. Many companies have successfully adapted to the current environment. There is a fair amount of churn in the market but no compelling reason for it to move overall more than 10% in either direction.

I see us as being in a rather unhealthy limbo with the Obama administration doing everything it can to destroy industries (coal, etc.) and jobs (Obamacare) while the rest of the economy adapts and manages to get by. This has lasted about 5 years already with a couple more years to go unless something happens to upset the equilibrium.

After that, it depends on whether we re-elect the "you didn't build that" party, or decide to throw the bums out and get back to work. Because of the lousy economy over the past 5 years, economic collapse is a favorite worry of preppers. We're actually about 5 years into a slow motion collapse. We're adapting to it every day but it is so slow there is no point of crisis as you would have with a hurricane or other natural disaster. It will either continue as we turn into Europe, or it will end and we'll turn around, but it will be gradual.

Given this set of circumstances I see no reason to expect wild deflation or wild inflation any time soon. Instead some prices will rise and others fall.

Meanwhile I am going to continue to prep for everything from hurricanes to EMPs to ISIS terror attacks. The economy is not helping but this isn't 2008.


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## Maine-Marine (Mar 7, 2014)

bigdogbuc said:


> As sick to my stomach as it makes me, everyone knows that useless piece of shit Hillary is going to be the next president right? Unless a miracle happens. Like her death.


No, she will not get the nod.


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## shootbrownelk (Jul 9, 2014)

Maine-Marine said:


> No, she will not get the nod.


 Are you betting on Elizabeth Warren Maine-Marine? She's worse than Hillary IMO. The Republicans had better get busy.And please, not yet another Bush.


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## sideKahr (Oct 15, 2014)

I agree with Diver, whatever happens will be gradual, punctuated by sharp panics like 2008. The PTB have too tight a control on almost every market for a complete collapse to occur, IMHO. Whatever market corrections they allow to happen, you can be sure it will be to maximize their profit. 

It was easy to forsee the real estate event, but the next event to happen, not so much. Yet.


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## Ripon (Dec 22, 2012)

The odd equation in this state of the economy is the extreme strength in the US Dollar. This could be well behind the drop in commodity prices and precious metals. If stocks begin to tumble, and they are likely the most volatile commodity, where will the rush be too? If it's not commodities it must be the dollar.


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## Diver (Nov 22, 2014)

Ripon said:


> The odd equation in this state of the economy is the extreme strength in the US Dollar. This could be well behind the drop in commodity prices and precious metals. If stocks begin to tumble, and they are likely the most volatile commodity, where will the rush be too? If it's not commodities it must be the dollar.


The strength of the dollar is not surprising at all. It is a reflection of the end of quantitative easing (fewer dollars being created) and is one of the reasons behind the fall off in commodity prices. The challenge to the FRB is to gradually normalize without collapsing anything. Given the drop in commodity prices they are probably not gradual enough. The next couple years should be interesting.


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## Old SF Guy (Dec 15, 2013)

Diver said:


> The strength of the dollar is not surprising at all. It is a reflection of the end of *quantitative easing (fewer dollars being created) *and is one of the reasons behind the fall off in commodity prices. The challenge to the FRB is to gradually normalize without collapsing anything. Given the drop in commodity prices they are probably not gradual enough. The next couple years should be interesting.


Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying specified amounts of financial assets from commercial banks and other private institutions, thus raising the prices of those financial assets and lowering their yield, while simultaneously increasing the monetary base. eg. bailing out wall street.


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## Diver (Nov 22, 2014)

Old SF Guy said:


> Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying specified amounts of financial assets from commercial banks and other private institutions, thus raising the prices of those financial assets and lowering their yield, while simultaneously increasing the monetary base. eg. bailing out wall street.


Actually bailing out everybody and offsetting the effects of stupid fiscal and regulatory policy. Want to guess what your house would be worth without all the FRB pumping going on over the past few years?


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## Smitty901 (Nov 16, 2012)

Diver said:


> Actually bailing out everybody and offsetting the effects of stupid fiscal and regulatory policy. Want to guess what your house would be worth without all the FRB pumping going on over the past few years?


I don't view my homes as an investment. I do not treat them as such. The inflated value cost me huge amounts in Taxes. Big part of the last crash was people treat homes as investment income. Next fool up flipping. Lending 3 times what a property was worth in the real world. Well we are doing it all over again. Lending more than the places are worth to people that will never pay for them.
Obama buying Bonds with funny money has kept interest rates low, that will come to an end and S will HTF.


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## jimb1972 (Nov 12, 2012)

Oil prices are still relatively high compared to 2000. I don't see doom in the price of commodities backing off a bit over the hyper inflated prices we have seen the last few years.


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## Diver (Nov 22, 2014)

Smitty901 said:


> I don't view my homes as an investment. I do not treat them as such. The inflated value cost me huge amounts in Taxes. Big part of the last crash was people treat homes as investment income. Next fool up flipping. Lending 3 times what a property was worth in the real world. Well we are doing it all over again. Lending more than the places are worth to people that will never pay for them.
> Obama buying Bonds with funny money has kept interest rates low, that will come to an end and S will HTF.


Sounds good for you, but there are still people with underwater mortgages. 6 years after the crash. That's not healthy.


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## Smitty901 (Nov 16, 2012)

Diver said:


> Sounds good for you, but there are still people with underwater mortgages. 6 years after the crash. That's not healthy.


 And their own fault sorry if it hurts. They knew those homes were not worth that kind of money. They hoped to flip down the road to the next fool up. I know too many that got caught up in that. They could have built or purchased reasonable homes and had them paid off.
I watched homes sell for $ 400,000 That were not worth 150,000 in areas not to far from here.
Watched an old farm house bought for 45,000 they put siding on it cut the grass sold it for 75,000 Next buyer did some cheap remodeling flipped it for 150,000. Down the road it foreclosed at 300,000. It still at best is a 60,000 house.
No home should ever be financed with an interest only loan, I know people that have paid huge payments for 10 years and still have Zero equity, They were fooled into going along with the next fool up .
It starting to happen again here.


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## Danm (Nov 15, 2014)

Maine-Marine said:


> Government can not longer pay its bills, obligations, or hand outs...
> 
> We will see a few things... these are not in order
> 
> ...


Had to add my 2 cents the military did studies if the economy crashed it isa correct truckers wont deliver goods to stores, but 72% of active and reserve military are expected to go awol and protect there families police will not patrol the streets for same reason. looking for triggers watch for oil to go below 50 dollars a barrel and opec to accept any currency instead of the dollar.


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## Ripon (Dec 22, 2012)

The thing is OPEC will take the dollar. There is nothing else they want. Not gold, not silver and certainly not another fiat currency. Deflation, the threat of, is when people want and take the dollar and start taking fewer of them for goods. We aren't seeing that at the stores....or are we? 

Mötley Fool just ran an article on the $750 drop in AK47s value over past 12 months. A lot of goods from cars to TVs are less today then 5 years ago.


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## Diver (Nov 22, 2014)

Danm said:


> Had to add my 2 cents the military did studies if the economy crashed it isa correct truckers wont deliver goods to stores, but 72% of active and reserve military are expected to go awol and protect there families police will not patrol the streets for same reason. looking for triggers watch for oil to go below 50 dollars a barrel and opec to accept any currency instead of the dollar.


If the price of oil is dropping relative to the dollar, the implication is the dollar is becoming more valuable vs. oil, so OPEC will be fine with dollars.

If oil also trades in other currencies that is not a big deal. All sorts of goods trade in a wide variety of currencies now.


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## Diver (Nov 22, 2014)

Ripon said:


> The thing is OPEC will take the dollar. There is nothing else they want. Not gold, not silver and certainly not another fiat currency. Deflation, the threat of, is when people want and take the dollar and start taking fewer of them for goods. We aren't seeing that at the stores....or are we?
> 
> Mötley Fool just ran an article on the $750 drop in AK47s value over past 12 months. A lot of goods from cars to TVs are less today then 5 years ago.


Real estate is still generally less than it was in 2006.


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## Diver (Nov 22, 2014)

Smitty901 said:


> And their own fault sorry if it hurts. They knew those homes were not worth that kind of money. They hoped to flip down the road to the next fool up. I know too many that got caught up in that. They could have built or purchased reasonable homes and had them paid off.
> I watched homes sell for $ 400,000 That were not worth 150,000 in areas not to far from here.
> Watched an old farm house bought for 45,000 they put siding on it cut the grass sold it for 75,000 Next buyer did some cheap remodeling flipped it for 150,000. Down the road it foreclosed at 300,000. It still at best is a 60,000 house.
> No home should ever be financed with an interest only loan, I know people that have paid huge payments for 10 years and still have Zero equity, They were fooled into going along with the next fool up .
> It starting to happen again here.


As someone who works in financial services, I am pleased to see you blaming someone other than the banks. 

If you want to see a healthy economy, you can't have a population stuck with as many underwater mortgages as are out there. Those people are going to be working down their debt, which means they aren't spending money on anything else, and the economy will suffer from lack of demand, i.e. exactly what we have been seeing.

It really doesn't matter whether it was their own fault or not. You get the same economic drag no matter what.


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## Danm (Nov 15, 2014)

Diver said:


> If the price of oil is dropping relative to the dollar, the implication is the dollar is becoming more valuable vs. oil, so OPEC will be fine with dollars.
> 
> If oil also trades in other currencies that is not a big deal. All sorts of goods trade in a wide variety of currencies now.


opec only trades in U.S dollar though


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## Ripon (Dec 22, 2012)

In most places I believe you are right. I did hear them talking that the 14% increase in the Bay Area CA this past year created new all time highs.



Diver said:


> Real estate is still generally less than it was in 2006.


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## Smitty901 (Nov 16, 2012)

While you were not watching:

The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.

Ponzi: Treasury Issues $1T in New Debt in 8 Weeks?To Pay Old Debt | CNS News

Hey Obama they put Madoff in prison for doing the same thing


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## Diver (Nov 22, 2014)

Danm said:


> opec only trades in U.S dollar though


It really doesn't matter. Let's say Saudi Arabia sells oil to Germany. If they do it in dollars, the dollars move from Germany to Saudi Arabia. If they use anything else the dollars stay in Germany. Either way we're not part of it unless someone does a transaction with the US. All that is changing is the location of dollars that are already outside the US.


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## jimb1972 (Nov 12, 2012)

Ripon said:


> The thing is OPEC will take the dollar. There is nothing else they want. Not gold, not silver and certainly not another fiat currency. Deflation, the threat of, is when people want and take the dollar and start taking fewer of them for goods. We aren't seeing that at the stores....or are we?
> 
> Mötley Fool just ran an article on the $750 drop in AK47s value over past 12 months. A lot of goods from cars to TVs are less today then 5 years ago.


The drop in the prices of AK's is just a return towards reason, I was buying them less than 10 years ago for about $300 or less. SKS's were under $100.


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## Diver (Nov 22, 2014)

Smitty901 said:


> While you were not watching:
> 
> The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.
> 
> ...


The US Treasury is always rolling over maturing debt. A lot of it happens right at the beginning of the fiscal year, which starts Oct. 1 each year. Our national debt is a concern, but rolling it over is not new debt.


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