Tuesday, August 19, 2014

The Dollar Paradox

The topic rises: "How can there be both inflation AND deflation at the same time?"

In our global, dollar-centric fiat monetary system, this paradoxical process is well under way, as it has been for some time, even though some would ask the question only in the context of some future collapse event.

Dollars INVESTED into equities do not "complete" a trade. They only flow into a speculative future promise of profitable redemption (future redemption of stock, at a higher valuation).

Equities are hyper-inflating (in perceived value / price).

Dollars that remove a finite resource from existence, in the process of consumption, complete the trade for that resource in the here and now. Think oil (and gold, in principle, when strong hands take possession).

Commodities are hyper-deflating ... (in relation to true dollar value).

So applied to all things speculative like stocks, bonds, securities and all other such future paper promises, we see a socially induced crowd-driven hyper-inflation of future gain confidence in debt performance, through financialization ...

And through this same action, we are temporarily exempted from the hyper-inflation of physical plane consumable prices for energy and food, by their relative hyper-deflation - due to the likewise hyper-inflated value perception of the paper currencies which price and "buy" (complete the trade for) these consumables.

Even as foreign dollars flow into the US (as predicted to be a trigger of price hyper-inflation) they support the above and offset FED tapering.

This is in fact a sign of the aging dollar system, as the timeline draws nearer to the close.

But this is enough to ponder over for the evening, as the hearty notes of duck pate and freshly milled peppercorns layered beneath a pastry-wrapped beef Wellington waft upwards from the kitchen and into the dining halls of Roacheforque manor.

To predict just when and how that timeline might end is a drudgery fit for the little people - a fool's errand at best.

The ruling class is long and well prepared for the turn, whenever it may arrive. And in the meantime, there is splendor a-plenty for the taking,

And all the time in the world to savor it.

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