User 289645

Things Could Be Worse...

I was stuck for a while thinking that inflation would come as the money supply increased. As the banks are keeping their grip on the money (not lending it out to people who can't afford to pay it back), I don't think that there will be too much money in the system. However, start reducing the supply of products in the market (scarce goods), and inflation will come about anyway. This is the worst kind of inflation because prices rise as wages are decreasing.

We don't make anything here anymore, and the Chinese are done with giving us credit. The ships just aren't bringing many goods from China, and U.S. businesses are going through their existing inventory just hoping to pay the bills. I think what we're going to see is that inventories will drop off, and then businesses won't have the money/ credit to replenish their inventories.

Going to be some interesting times.