Peoplenomics:The Second Depression Handbook (2)


This morning we do a second chapter of our Second Depression Handbook as we look at a very important link that all major depressions seem to hold in common.

Along with that, we’ll have a few remarks on other items, including our earthquake discussion on “earthquake tired” from the UrbanSurvival column of Friday which – as a whole bunch of readers have noted, nailed the 6.4 in Taiwan.

But above all, we will look at the issues in the charts as next week shapes up to be a kind of “last chance” in our Aggregated Indexes work.

Load up on some extra coffee…there’s much thinking to be done…

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3 thoughts on “Peoplenomics:The Second Depression Handbook (2)”

  1. “””You see, the Federal Reserve is making up funny money and the basis for the next “funny money” is being laid as we speak. It’s an open secret that the Federal Reserve Notes are backed by nothing more than a half-hearted promise from a bunch of bankers who make money on watering down the money’s actual purchasing power.”””

    silly question…the other day during a conversation we got to the subject of mr. slick jeans banker selling us on the fast print…one asked..if i borrowed 10000.00 at 4 percent interest and the federal reserve is printing at ten percent… can i borrow that money today par it off in a year and bank a six percent increase.. then sell the product at the new inflationary level of the ten percent increase from slick jeans print fest giving me a sixteen percent on the initial loan?
    i said i didn’t know that but would ask…

  2. Yes. Inflation (printing money) favors the debtor. Because you are paying in the future with devalued dollars.

    A) Inflation is not currently 10%
    B) You can’t count on the inflation of a specific product to be up, down, or any specific value. Buggy whips, for example, would not be impacted much by inflation.
    C) You can’t count on finding a buyer at that price.
    Your product is now “used” or “last years model” or maybe obsolete.
    D) Your math is off. You paid 4% on the loan. You made 10% on the increase in value. Your net gain was 6%. You don’t “bank” interest you don’t pay on the loan because it doesn’t generate “new” cash for you. Your only source of cash is the sale of the product.


    • darn.. so it isn’t like a nest egg.. fill the warehouse with product then sell at the inflationary price.. pay off the loan early.. my luck it would be like a stock I bought..I had drams that the company would be absorbed and get a much stronger stock. instead they bought the assets and tossed the company out the door. I think that is what the usa will do.. go bankrupt toss the people under the bus..and start fresh

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