User 196790

The American Crisis and the Case for an Inflationary Depression

Euro toast. Europe is too socialist, more and more deficit financing = more debt. Debt culture in Europe is just as bad if not worse than America's.

The American Crisis and the Case for an Inflationary Depression

www.federalreserve.gov...

look at our external debt under clinton and our trade deficit under clinton. he vehemently fought for increased trade with china and the rest of the world, thinking the united states would gain from exporting its expensive goods and services to the chinese, who couldn't afford any of it.

he financed the strong economic growth of the 90s through foreign debt, the issuance of which has caused a debt bubble whose collapse could spell a devalution of the USD.


On Dec 03 01:15 PM VennData wrote:

> "...President Bill Clinton's strong encouragement of globalization
> and foreign trade led to a dependence on debt that will deepen the
> current recession into a possible depression and cause rampant inflation..."
>
>
> What are you talking about? Your ability to pick and choose causality
> is fanciful.

The American Crisis and the Case for an Inflationary Depression

You're right, asset prices are not immune from inflationary pressure, and may in fact rise in nominal terms. However, I still see the Dow below 4000 within the next few years and a real decline beyond that as well.


On Dec 03 10:55 AM paultaut wrote:

> Thank you all, I only got into this article because N. S. appeared
> to be getting a bum rap. I personally disagree with the 3,300 level
> since I can't see inflation without inflated assets of some sort.
>
>
> There are opinions and then there are opinions held by only one person.
> Those who are selfopinionated will never listen to anyone else. Hopefully,
> I will, at least listen. IMHO

The American Crisis and the Case for an Inflationary Depression

what bias? what wrong conclusions exactly? and yes gold, like everything else in the world, has no inherent value other than the value given to it by mankind. however, fiat money can be printed, causing an increase in money supply, which lowers the value of that money. gold supply is nothing like fiat money supply, and its merits as an inflationary hedge will cause demand for it to rise sharply, just as fiat money demand decreases.


On Dec 03 10:04 AM TimT wrote:

> Probably a smart man but clearly lacking in any kind of wise judgement.
> He uses good facts but his obvious internal personal bias causes
> him to come to extreme and wrong conclusions. Gold only has value
> because people perceive it to have value--no different from fiat
> money.

The American Crisis and the Case for an Inflationary Depression

Helicopter Ben has already stated several times he is committed to printing money and inflating us out of economic contraction.

Japan and the US are different in two FUNDAMENTAL ways: 1. Japan did not have a massive exernal debt and 2. Japan did not have the global reserve currency.

There is a GLOBAL economic contraction and every nation is going to focus on DOMESTIC growth first. How do they finance that? Calling in loans to America and selling US treasuries.

There is no liquidity trap here, the Fed won't allow it. And even if somehow it occurs, the debt bubble will collapse itself... simply put, America cannot pay off its debt and there won't be enough demand for US debt to keep the USD afloat.

The Perversion of American Capitalism

Deflationary pressure will not be an issue in this case, because no one will want to hoard the USD once it is no longer the strongest investment in the world. The GBP will be the global reserve currency in ten years, mark my words.

The Perversion of American Capitalism

I am 100% a proponent of capitalism and I understand the merit in a debt-driven economy, with or without industry. But if this is the system that is to work, then we have to PRIVATIZE rather than SOCIALIZE. We're headed in the wrong direction, there was misdirection of capital when the Fed kept rates low in the 90s and now the only way to fix it is suffer the consequences short term to regain long-term stability. We are socializing further for short-term benefit at the expense of the longer term.

The "American people" will not get us out of this. Their collective merit in intellect and ingenuity is irrelevant. We need libertarian economic policy to get us out. We have to understand that artificially high money supply caused the misdirection of capital that we are falling off of right now. And if we are to remain the economic superpower of the world, we have to let the markets do their work and maintain purchasing power for America.

America works because it is, like everyone is saying, debt-driven. America is the best investment in the history of the world. Or at least it was. We rely on that image for foreign investment and reliance. We rely on that image for purchasing power. We have to prove it now. We need to get Alexander Hamilton on their ass.

Dawg, free market FOR THE WIN.

The Perversion of American Capitalism

I am 100% a proponent of capitalism and I understand the merit in a debt-driven economy, with or without industry. But if this is the system that is to work, then we have to PRIVATIZE rather than SOCIALIZE. We're headed in the wrong direction, there was misdirection of capital when the Fed kept rates low in the 90s and now the only way to fix it is suffer the consequences short term to regain long-term stability. We are socializing further for short-term benefit at the expense of the longer term.