It spells a reduction in the increase of credit expansion.

couple that with de-leveraging and unwillingness to lend. what does that spell?

>if banks can’t/don’t want to lend money, no one can make them, and even 0% interest won’t fix that.

This is true right as the fractional reserve fiat system reaches its limit. But it isn’t very comforting to realize that the banking system stops responding to a broken thermometer just as soon as it breaks.

what’s your point? i posted that because of the charts and the fact that serious people are now taking this seriously as a possibility. i didn’t say it was going to happen, just that it looks an awful lot like it already is.

i don’t think the authorities even have much control. de-leveraging is deflationary, and all of the banks have to de-leverage. if banks can’t/don’t want to lend money, no one can make them, and even 0% interest won’t fix that. see: japan.

Notice the use of the word “could”.

I think that you’re general point here is more or less correct for the mediate term. But unless they are going to stomach the political mess of bank failures and mortgage mayhem they’re going to have to print more money or invent or use some other exacerbating device.

And one the straight up money supply side of things, judging by the Federal Reserve numbers the inflation is still pretty steady. federalreserve.gov/releases/ has several informative tables and charts of these tables are available on Wikipedia.

i’m not. inflation doesn’t mean rising prices. and even if it did, only the price of goods and some services are even rising. wages are flat to falling.

money supply isn’t rising any faster than before. treasury.gov has lots of pretty charts.

iraq certainly isn’t helping, but as our war-supporting friends like to remind us, it’s a small portion of gdp.

iraq and iran are adding risk premium to the price of oil for sure.

>But oil’s up much more against the dollar than the euro.

because they’re raising and we’re cutting rates. not the same as printing.

I totally agree.

“but money supply and credit are actually decreasing which means that we are experiencing deflation. no one is printing or lending.”

What is your source? How can you say there is simultaneously inflation and deflation? That’s not possible. How is the government paying for Iraq and everything else if not by printing money?

“oil is up against all currencies, as are ag commodities.”

But oil’s up much more against the dollar than the euro.