Black fiat

Mish Shedlock has famously been a deflationist for some time, against our personal experience of the cost of living. In recent interviews, Jim Rickards posed the question, what if deflation and inflation are now contending with each other to produce an overall inflationsit or deflationist effect (or even a wash)? Today, on Keiser Report 507, Antal Fekete characterized the overall environment as profoundly deflationist based on the magnitude of the destruction of productive capital. Now considering the immense effects black gold can have on gold flows and gold pricing, it seems Fekete has developed an interesting fiat counterpoint. For where the river of black gold is a net positive (economically) that can help explain certain gold market phenomena, the black hole of ongoing, accelerating capital destruction explains much in finance and the general economy. The question arises, what if our insane money printing is an effort to replace continuously destroyed capital? Yesterday, Jim Willie told Greg Hunter that the fire consuming capital was a collapsing credit swaps derivatives market. He said that he believed the stated QE figure of a trillion-dollars-per-year was a fraction of the new money supply being created to stave off capital losses among the TBTFs. In other words, there is a river of black fiat being poured onto the fire of new bankster derivative losses. Capital destruction may have elicited black fiat. It's not far fetched.