When inflation is fed by an expansion of credit(smokey)

"The next "bubble" will be in the prices of all real things.However, this will not truly be a bubble, rather the effective collapseof the currency. Right now, physical things like eggs and wheat areyielding higher rates of "return" than are paper assets like bonds,whose yields are now negative. When one cannot "save" in a bond andearn a positive real rate of return, one must seek shelter out of paperassets. This is hyperinflation."

smokey's reply:

Thereis no "shelter" in electronic assets fed by leveraged speculationduring a credit collapse. Prices will rise only until the debtcollector breaks down the door.

When inflation is fed by anexpansion of credit which consequently feeds further inflation, whichconsequently expands credit, an ultimate plateau is reached wherein thecollateral used to obtain more credit reaches a perceptual breakdown offurther expansion.

At that point, the more intelligent creditorsand debtors must quickly execute what is called in the street racingcrowd, a "Bullit U-Turn"' in order to try to maintain theircontinuity-of-existence.... or as the professional purveyors ofpsychiatry would call it:

"Sanity".

But since this BullitU-Turn tends to create havoc with all the computer and business modelsbased on the ongoing credit-inflation tango, the heretofore financialauthorities then try to institute every play in the book in order toprevent the whole financial system from swerving along for the ride.

So,while the smart folks are allowing the gravity of the credit collapseto push them down the hill to safety, those with an overabundance ofmemory and greed tend to play right into the machinations of thefinancial authorities' by pretending that the Mustang is still headingnorth blind and numb the smoke and the smell of burned rubber.

Steve McQueen's Mustang is headed South, folks.

Those who are still trying to win will lose.

Those who realize that winning is impossible at least can stand still long enough to see what is happening and act accordingly.

Losing is inevitable.

"He who loses the least, wins!" -goldie