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Imagine – A Great Deflation! It’s coming!

July 28, 2014

Deflation is the ‘fear’ of our Fed and most Keynesian economists. The entire model of Keynesianism is built upon the idea that ‘deflation’ would not occur. Deflation, however, will soon develop with a vengeance as our Debt and Derivative economy starts its decent into oblivion (our so-called debt economy is built upon sinking sand). Let’s IMAGINE a great deflation to understand why this coming event is so devastating to our economy, financial system, and the Keynesian model of Debt/Inflation. So what is DEFLATION? What happens when this event develops and all our so-called VALUE disappears into our consciousness (our metaphysical mind)? Let’s try understand the concept of Value and also the concept of Deflation!

Deflation can be defined as a precipitous decline in ‘value’ of an asset or an item of collateral. Imagine your own house, car, boat, second home, share of stock, bond certificate, derivative contract, etc. (declining precipitously in value).  All these so-called assets have a perceived VALUE (say a ‘price’ expressed in dollars). This so-called ‘value’ can go DOWN as well as ‘up’. My house is currently (let’s say) valued at $300,000. Can this ‘value’ change? Can this ‘value’ decline to zero? My answer is absolutely! Any ‘value’ can go UP, UP, UP with the action of price bidding…and it (value) can also go DOWN, DOWN, DOWN with a lack of demand and/or a crash of our imaginary cyber markets! The entire concept of ‘value’ is imaginary! Did you know this? Are you aware that ‘value’ is within my/your consciousness?

When our stock/bond/derivative markets begin their decent into ‘value destruction’ (it’s coming) we will witness the VALUE or price of my home/your home begin its decline. Land values will decline. Car prices will decline. A share of my/your stock will decline. All the $1.5 quadrillon of derivative contracts will begin their descent to zero. Imagine that all physical items in your immediate area/neighborhood decline to zero. What has really happened to the VALUE of my/your assets? My $300,000 house now would have a ‘value’ (price in dollars) of ZERO. My car would have a ‘value’ (price in dollars) of ZERO, etc. A great deflation (when it arrives) will crash the cyber dollar (now almost totally within cyberspace/our computers) and all prices (in dollars) could continue to their eventually end game of ZERO. Are you aware of this potential event? Think about deflation and value destruction!

Today, we express all so-called VALUES in our cyber currency called the dollar. Our ‘dollar’ is technically a NO THING (imaginary) unit. This unit derives from our Consciousness (our metaphysical mind). This unit is artificial and merely a declared unit of legal tender which works ONLY if we have continual long-term INFLATION. The increase in ‘values’ is what allows our Keynesian model of economics to survive. All astute financial pundits understand this phenomena. Values (also called dollar prices) allow us to imagine that our monetary system has stability and credibility. In reality, our economic system has stability and credibility ONLY as long as INFLATION continues. A serious DEFLATION creates the reality of disappearing ‘values’ and ‘dollar prices’. All our so-called wealth is based on the assumption that ‘values’ will remain stable and/or continue ascending. Keynesianism is our economic model…and this model is based on continual/persistent increases in prices over time. The last Great Deflation was in 1929-37!

A CRASH of the stock/bond/derivative markets, however, creates a whole new scenario for our economy! Values (dollar prices) could go to ZERO. Our cyber dollar could go to ZERO. All global currencies could go to ZERO. We live in a ‘imaginary’ world of our consciousness and few people understand this reality! Yes, all prices can and eventually will go to ZERO. Both the concept of VALUE and our DOLLAR are imaginary conceptions/perceptions. Today, we could be back to a BARTER economy in a few short years. Physical items (like silver coins/gold coins/copper coins, etc.) will not disappear or vanish into our consciousness. They could still be used as units for BARTER. Food could be used as units for BARTER. Our cyber dollar and all the other cyber currencies (now including all global currencies) would disappear and vanish into our metaphysical consciousness. THINK! We live in a ‘imaginary world’ of cyber money which is collapsing as I write. Get ready for DEFLATION and VALUE DESTRUCTION globally! The beginning of this event could be 2014! I am:

10 Comments leave one →
  1. July 30, 2014 11:13 pm

    Deflation is a consequence of charging interest on money. Compound interest is infinite in the long run. The math is very simple.

    Assume that a 1/10 oz. gold coin was put in the bank on interest in the year 1 AD on 4% interest. How much gold would there be in the account by the year 2000? The answer is an amount of gold weighing 6,000,000 times the complete mass of the Earth.

    Compound interest must be paid from debts so debts tend to grow until interest payments cannot be met.

    As long as new debts are made at a faster pace than debts are paid off, you have inflation, otherwise you have deflation.


  2. Mitch permalink
    July 31, 2014 8:17 am

    When you think your $300K is worth zero let me know. I may offer you a $1 for it.


    • July 31, 2014 1:31 pm

      When my $300K disappears from my computer screen account, I will take $1 (provided it is a silver coin). D


  3. bh2 permalink
    July 31, 2014 5:54 pm

    Assets do not decline in value to zero because government issued currency declines to zero. There is always some kind of “money”, decided by the market (not the government), which is the highest order good always exchangeable for other goods.


    • July 31, 2014 10:08 pm

      Depends on what asset you are thinking about. Gold coins could be used for bartering. A derivative contact would go to zero. A federal reserve note would be worthless. A chicken could be used for bartering, etc. D


  4. ja ck permalink
    August 1, 2014 3:40 am

    Value and Price can not be used interchangeably. It would be an elementary mistake.
    ex.: the VALUE of MY house, as my shelter to me, is infinite. The PRICE of MY house is that for which it gets exchanged for money at the MOMENT of me selling my house.
    And that , friends, is the fundamental difference between value and price.


  5. August 2, 2014 5:08 am

    If the government only sanctions the dollar for payment of taxes and fees for any government services and only compensates its employees with dollars, then the dollars will have value.


    • August 2, 2014 12:00 pm

      Why not have our Central Bank create dollars for all our taxes. All that is necessary, today, is QE for payment. Our Fed counterfeits our dollar daily for what they call Asset Purchases, so why not counterfeit for all American taxes? Think about the nature of today’s currency creation operation (administered via the computer at the N.Y. Fed)! D


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