Federal Reserve Experiment

The Federal Reserve should consider printing money with disappearing ink.Because negative interest rates in Europe and Japan has't worked Yellen et al in the money kitchen should consider artificially withering currency. Not every bill should have a short shelf life say 1 year. Maybe only 2%. That could be one way of achieving 2% inflation. The clear message would be spend the cash or risk losing it.A side benefit would be a squeeze on drug dealers because they are cash only transaction. Counterfeiters could profit because their money would be more valuable by comparison. Their money would still be the reliable old fashioned method of production.The alternative to currency machinations world wide would be paying people what they are worth. That would shrink the deficits dramatically.And obviate the need for growth.

Deflation: Helps Poor

Central banks around the world and our own Federal Reserve are working to stop creeping deflation. In fact their actions are diametrically opposed to the needs of working people. It's a fact that wages are stagnant if one can even find a job.So the challenge for workers is making meager salaries cover the costs of living.The vast majority need stable or preferably lower prices at stores and show rooms.But the Central Banks answer to governments, corporations and wealthy individuals who all have massive debt to repay.Deflation would bankrupt those three. But deflation will help everyone else.There is no choice. Deflation will come.It will come because of popular demand.So expect it.

Inflation Is Poised To Rise Because Of China Pollution

 AKS Steel Holding Company recently announced an across the board price increase on all its steel products of 2%. It cited rising demand across the globe. United States Steel has similar robust prospects. Alcoa and other basic material dealers are demonstrating a turn around in their stock price and the price of the their underlying metal ingots. China's pollution woes will provide a white hot boost to basic metals pricing. Simply the Chinese people can be content with 150 feet visability in cities because of coal-fired manufacturing and utility production or the smoke stacks will be shut down in the interest of public health. With this cutting back of steel , aluminum , copper and other materials and finished goods will come some or a lot of inflation. That will kill equities and may bring down China's highly leveraged real estate , banking and municipalities. But that may be a year away. So in the interim buy steel, copper, aluminum stocks. Later buy massive amounts of out-of the-money puts on the major indicies as stagflation grips the economies around the world.

Currency Wars Lead To Trade Wars Lead To World Wide Depression

Today the incoming Japanese Prime Minister Shinzo Abe followed through on his campaign promise to reflate the Japanese economy. He directed the Bank Of Japan to reach 2% inflation in the countries stagnant economy. Two percent does't sound very high? Fact is Japans inflation doesn't exist. Fact is the latest reading is -.4% So from there to 2% probably won't happen But it got him and his party elected and that's what he wanted.. During his campaign he pointed out that the  U.S. and the European Union's printing of money was the main problem for Japan's economic woes. The debased currencies of dollar and Euro were edging out Japan in the market place. Since most every major country in the world have similar products, it may come to just cost of goods and services as the deal maker or breaker.And that means relative currency valuations win the business. Trade has become a zero sum proposition There is just so many people and just so much discretionary income. ERGO .Gentlemen, start your printing presses.

And if cheap money doesn't do the trick? Then the next move by governments will be trade protection laws. That will lead to a contraction in global business and will force layoffs around the planet. Then the odds favor a depression and maybe a war being declared by the major economic powers to really generate business and instill brand loyality and to direct irate voter attention to foreigners and away from the local centarl governments.

Deficits Don't Matter?

The spending monkeys in Washington have been spending trillions trying to keep the economy afloat. They have been doing this since the Reagan years. Remember "deficits don't matter". That's partially true. If one is on the receiving side of deficit spending then deficits don't matter. But one who doesn't get the benefits but on the contrary has to payoff the deficits for years to come then deficits do indeed matter.Government employees, politicians, Wall St, banks, special interests foreign and domestic ,military-industrial-complex etc celebrate deficit spending. Most everyone else pays the tab.

Nothing lasts forever. When we do finally go broke it won't make much of a difference to most people unlike the privateers who have been gaming the system.