Campaign Creations

Negi wrote:

Desler wrote:

Negi wrote:
I'm sorry, but you're misinformed.  The problem we currently face is DEFLATION!!!!!

I could try to explain to you why you're wrong, but my arguments would probably be wasted.  If you want to know why you're wrong, just let me know.

No, it is definitely inflation.  The cost of goods go up because there is more money in circulation, thus money loses its value. 

Crank out money
Money becomes more common
Money loses value
Prices of general goods go up

Definition of inflation pretty much.

Clearly you understand the term inflation in only the simplest sense.  Would you like me to tell you why you're absolutely wrong?

Actually, I will neglect my work to explain this to you.

Step 1.) Create a bubble
Step 2.) Wait for banks to get really involved in said bubble
Step 3.) Wait until people realize there is a bubble
Step 4.) Let the bubble pop
Step 5.) Watch as banks stop lending to each other because they don't know how bad their counterparties' balance sheets are. 
Step 6.) Watch as banks are forced to pay higher interest rates due to step 5
Step 7.) Watch as consumers and businesses are forced to pay higher interest rates on their debts and/or lose their loans (lines of credit, car loans, etc)
Step 8.) This is the crucial step.  Watch as the actual amount of money in the hands of the nonbank public dries up
Step 9.) As liquidity decreases, watch people begin to lose their jobs as companies are forced to close places of business and lay off workers.
Step 10.) You are in a depression.

If you accept that step 8 follows from step 7, then I am right. 

I have on hand two examples of this exact progression:
Great Depressoin
Japan's lost decade (1990s)

I guess you should just learn economics.
Because you're horribly misinformed.

So yeah, basically, the way to prevent this from happening is to encourage interbank confidence by partially nationalizing those banks that are marginally insolvent and fully nationalizing those that are completely insolvent.  Which is what the intention of the bailout is, j-j-j-junior.

Xenon wrote: We're going to end up with horrible inflation because the government is cranking out money like toilet paper to pay for the bailout. I'm seriously considering getting a new computer now, before it kicks in.

Negi wrote:
I'm sorry, but you're misinformed.  The problem we currently face is DEFLATION!!!!!

I could try to explain to you why you're wrong, but my arguments would probably be wasted.  If you want to know why you're wrong, just let me know.

Negi wrote: Not true.  It is inaccurate to say such a thing.  General inflation only happens if the money given to banks is actually lent out to the public.

Negi wrote: Just searched bailout inflation.
Search returned concentrated retardation.

Desler, here's the problem with saying there will be inflation due to a bailout:  If inflation starts to increase past what the federal reserve wants it to be, they will just raise interest rates.  They prevent the economy from overheating.  They can do it at any time. However, at the moment, they definitely don't want to be raising interest rates. 

The fact is, if there's one thing the federal reserve knows exactly how to do, it's fighting inflation.

Is that better?

Lavarinth wrote: That's the glory of it all, YOU can request a bailout, TOO!