Who remembers a long term bear market?  Anybody?  
 
Major Post-War Bear Markets ==> https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/pages/65542_1965-1969.pdf
 
The line has been going up and to the right for so long people have forgotten that markets work fundamentally differently on the way down.
 
It doesn’t help that so many USAians have been compelled into speculating by pension plan regulations that favour speculators.  It is clear they will be fleeced.
 

Posted by: too scents | Jan 29 2026 7:22 utc | 304

Posted by: Exile | Jan 29 2026 6:58 utc | 301
 
#####
 
Inflation also rewards the wealthy. They get the newly created money first (they tend to have easy access to new credit) before prices have adjusted to the new money supply; it is the middle and lower classes who get purchasing power from the expanded monetary base AFTER prices have risen, so they basically get nothing out of more money being created.
 
Only the wealthy (and connected) get the benefits.

Posted by: LoveDonbass | Jan 29 2026 7:28 utc | 306

In response to
”
A planned economy would go a long way towards eliminating speculators.  The first step is to let the speculators fail in the coming downturn. 
Posted by: too scents | Jan 29 2026 7:04 utc | 302
”
China is into its 15th 5 year plan and I think that going through the process is where are the gains are made in society coming together in understanding and participation…it needs to be an ongoing ever evolving process that stays public focused.
I see China setting a good example of walking that path…..not perfect but continually adjusting and with good vision

Posted by: psychohistorian | Jan 29 2026 7:39 utc | 308

Posted by: too scents | Jan 29 2026 7:04 utc | 302  It is in fact very common for speculators to fail in a financial crisis that breaks out before a deflation/depression. Somehow taking out the speculators doesn’t help the productive capitalists as falling prices take all their profits and they can’t hire and invest any more, and fire people or even go broke. You keep ignoring that part. Does no one you know actually need a job to live?  As for the blanket claim that deflation means productivity gains, productivity as a literal increase of production or production with fewer costs or both is not what drives capitalism. What matters is profitability. In capitalism there is such a thing as a general glut of goods, what is called overcapacity (sometimes it’s called overhang.) The deflation in the prices of consumer electronics is a nice example of what you’re talking about. But that’s in one sector of production. The family farm is something for a very small minority now because deflation in the prices of crops due to productivity gains. The many people who lived on their own farms mostly went broke in the long run, or fell behind the people in towns and cities, so they left for (ironically) greener pastures that were somehow there where there were no pastures. 
 
Posted by: Exile | Jan 29 2026 6:58 utc | 301  This is tendentious. Savers is people who buy mortgages and bonds as well as people who put cash into land and gold. The correct term is creditors. Deflation benefits them because in real terms they get more interest. And every business investment is literally a speculation. And many investments are done with borrowed money, as are purchasing homes and cars. Simply tagging these people as speculators rather than debtors is rentier propaganda. 
 
A note on gold and the dollar, in the form of US treasury securities? The thing about the rise and fall of the securities is these changes are not about the creditworthiness of the US government. If the US was defeated in a war and the bonds wouldn’t be repaid at all, or in grossly inflated currency because the economy was wrecked by war, then you would see real hyperinflation. Until then, the rise and fall in the price of those securities is about the need for liquidity, both by firms in the US but by capitalists in other countries. The dollar will not be replaced as the reserve currency until some other currency—theoretically something like Keynes’ BANCOR could serve—becomes consistently more attractive as a reliably liquid reserve. And there is no prospect gold will become liquid, certainly not as bullion and likely not as any version of gold-based currency. Gold is a sign of hoarding (ditto other precious metals but maybe oil too?) A resort to hoarding is a sign of an economy going into crisis mode, but that means not just the US—which is still the leading capitalist economy by the way (PRC is not capitalist, yet)—but the world economy. And in a world depression the people with money are top dogs. That is, you guessed it, the US. The Fed was never so powerful as in the Great Financial Crisis. Further, asset bubbles can include precious metals. At this point it’s not clear to me that the gold market isn’t being manipulated to take the suckers for a ride. 

Posted by: steven t johnson | Jan 29 2026 12:15 utc | 310

Re: Gold ?
 
the Price is being driven by Central Bank buying (not Retail) 

Posted by: Exile | Jan 29 2026 13:15 utc | 312

Too Scents
 
Thanks for the correction. Wow ! 

Posted by: Exile | Jan 29 2026 13:27 utc | 314

Irish Don, you always come up with good stuff. That link to the beacon of dumbocracy……  🙂

Posted by: Peter AU1 | Jan 29 2026 14:29 utc | 316

Savers is people who buy mortgages and bonds as well as people who put cash into land and gold. The correct term is creditors.
Posted by: steven t johnson | Jan 29 2026 12:15 utc | 310
 
Yes indeed the correct term would be creditors so why say that “people who buy…” are savers???
People seem to think that when they buy something like gold or land or stocks or bonds that the money disappears into a black hole.
They refuse to understand that when one entity buys gold another entity wants the dollars more than gold and thus sells gold. 
Buying mortgages, bonds, land or gold is the opposite of saving. Saving is when you keep your money. The opposite is when you give it to someone else to spend. 
 
Saving money is when people or businesses do not buy things. They hang on to the money.  That’s deflationary. 
When people  buy things that’s inflationary. 
When you expect the price of fuel will go up tomorrow you may run out and fill your tank. If everyone does that the huge increase in demand does drive the price of fuel up.  People think they are saving by buying early but are instead increasing the cost. Spending is always anti-saving.
 
When people stop buying things that drives prices down. 
I’ve mentioned this before, prior to the 2008 financial collapse Fed Wire statistics show that 3 trillion dollars transferred every day.
They say that $3Tn (that was changing hands every day) is a sum  equal to more than 3 times as large as what Economists say is the total money supply. Do you believe the entire money supply was changing hands every 3 days? Obviously, Economists have a severe problem with understanding accounting when they were thinking the amount of money in the system is less than $9Tn and Fed Wire does not even account for all the money spent in each day. Local monetary exchanges aren’t counted.  Economists also have a very flawed understanding of the velocity of money.
 The Financial collapse came in 2008 and Fed Wire transfers drop by 1 trillion dollars a day. That is a whopping amount of savings. In other words, that huge amount of not spending (i.e. saving) daily caused a collapse of prices, a collapse of economic activity.
Now move forward to the spring of 2020 when Covid came, and in theory one would expect to see the same thing. In 2020 more people lost their jobs more businesses closed than in 2008 but the huge amount of  saving in the economy did not materialize. In fact when the govt bailouts started in March 2020 the Fed Wire daily transfers actually went up 1 trillion dollars. The govt tossed out money to laid off workers and businesses like it was candy at a 4th of July parade and it has caused a huge amount of inflation.  In contrast, the actions that the govt claimed were a bailout in 2008 resulted, in total, to actually make the US Treasury $100s of billions of dollars in profit. Govt expenditures did not go up. In other words, the govt also was saving and contributing to  the economic downturn.  In Q2 of 2020, under Trump, govt expenditures increased $4 trillion. That was almost a 100% increase in Federal spending.
 
 
 
 
 

Posted by: jinn | Jan 29 2026 16:23 utc | 318

Posted by: jinn | Jan 29 2026 16:23 utc | 318  In a way I hate to question someone who seems to mostly agree with me, but…why was there such a lag in the supposed inflationary effects of the massive government spending under Trump and Biden’s first year or two. Biden wound back the programs as quickly as possible but the inflationary burst came after he was decreasing the discretionary spending, sparing the military of course. Payments on the federal debt increased. But that is determined by the prevailing rate of interest.
 
And aside from the curious lag between alleged cause and effect, there is the quantitative issue: Why did such a titanic increase not induce hyperinflation? Or at least one comparable to the early Seventies? Personally I think genuine hyperinflation is caused by defeat in war, either a literal defeat by armies, or by a small country being whacked by economic war on its currency by a great financial power. But that is not the general view. A large increase in total debts/credit, private and public, that can’t be repackaged in some form by an economy in crisis due to a fall in profits, would lower the value of money, I would think. A general rise in the average prices of goods is not quite the same thing. But I think that an actual shortage due to loss of supply, whether induced by declining production or disruption of essential foreign trade can occur. And I also think a highly concentrated economy can have price-gouging on a wide scale too. I’ve never seen the usual theory, which seems to be yours too, is that only government deficits can be inflationary justified in a plausible way. 

Posted by: steven t johnson | Jan 29 2026 17:22 utc | 320

Posted by: steven t johnson | Jan 29 2026 17:22 utc | 320
######
 
Overwhelmingly, the most ignorant about economics are people who have never been in business or cannot grasp the supply/demand dichotomy.

Posted by: LoveDonbass | Jan 29 2026 18:07 utc | 322

Exile and too scents.
I much appreciate your comments. Physical metals vs the fiat petro-dollar. Interesting times.

Posted by: Peter AU1 | Jan 30 2026 11:20 utc | 324