Posted on 06/01/2011 2:51:40 PM PDT by frithguild
They are setting up the crisis needed to get a “deal” on raising the debt. We should be deflating. But they are trying so hard to create inflation it ain’t working.
I liken this to “reverse musical chairs”. Neither party wants to be in the hot seat when the music ends.
Well written and very informative article.
lets hope it comes BEFORE people have to vote
in fact, if you are a good conservative business owner, it might be time to take that nice long vacation that you KNOW you always wished you had time for.
Do it now, while you still have a business, and help defeat the communists BEFORE YOU HAVE NO MORE BUSINESS
GO GALT NOW~!
Those that are too big to fail have the bailout politicians in their pocket so they don't care. The rest of us get screwed either way.
Wall Street, as with the rest of our financial system, is in serious need of correction but as long as these idiots expect and get the Fed and the US government to bailout their collective, idiot-ridden, scamming lamearses, there will be no correction and we the people will forever be screwed beyond our own imaginations......at least until this country financially implodes via a default....and one can only hope such does occur, because as is, a default is exactly what is needed to make the ultimate correction. =.=
It has to be broken before they can fix it . . .
We could have both at the same time.
Anything produced outside of this country will become expensive. Cheap clothes from India will still be poorly made, but they'll cost a lot more. Food grown here will be higher because the rest of the world will buy our food. American's worthless dollars won't be able to compete - food will be expensive.
Labor - people working for each other - cutting hair, flipping burgers etc will become cheaper. Lower wages, lower prices for the service. Having a horrible job that doesn't pay squat will be a status symbol compared to being unemployed with you and the kids bunking in with an older brother... and his wife and four kids...
Then again, this economic can will probably be kicked down a year of so from now with QE3 - which will make things better in the short run - and much worse in the long run. Put in fruit trees...
They wish they could create inflation.
Take away the hyper, and this describes the situation.
Monetary policy seems completely ill equipped to address residential real estate deflation and simultaneous comodity and food inflation. Fiscal policy attacks small business on multiple fronts. The only thing left to do while getting hit from three sides is stay inside and hide. That is what seems to be happening RIGHT NOW.
If the debt cieling is not raised, and the executive branch comits to paying treasury holders first, spending for the rest will have to be cut about 30%. I actually like that idea.
However, Politicians have become so jaded that they laughingly ignore economics and common sense. A poke in the eye to treasury holders ... wow. They are just about stupid enough to do it.
That is the sentiment that concerns me - raised debt cieling or not. A total loss of confidence first by smart money, with everyone else running for shelter not long after. I haven't seen this in my lifetime.
You don’t.
You get hyperinflation followed by a deflationary collapse.
I am not even sure the inflation thing is going to happen this time, the money from the growth in the U.S. money supply is going overseas, not where it can be spent here in the U.S.
It may happen that we go directly to a deflationary collapse from a collapse in the labor market. We are very near that now.
Post 13 depicts the progressives’ “transformation of America”.
That chart, adjusted for inflation, doesn’t look as bad, but still bad. Yours shows the trouble started around 1975, the inflation-adjusted shows it started around 1985. Either way, no president or congress has done anything about it for 25-35 years.
http://www.marktaw.com/culture_and_media/TheNationalDebt.html
I think we are much more likely to have hyperinflation after a deflationary collapse, not before. One reason is the one you cited — the US dollar is really the world’s currency, and increases in money supply get dispersed overseas.
If there is going to be hyperinflation it will be when those dollars start returning home. This would occur if more countries started closing off exports (such as Russia and China have done recently — agriculture and oil, respectively, IIRC), or participated heavily in non-dollar markets. Also, if the US debt continued to go upward, and we started really monetizing that debt (or defaulted), confidence in the dollar would trump both the lack of confidence in other currencies, and the inertia of having international trade conducted in dollars. But all of this would occur after a deflationary collapse.
I do believe that you are right in saying that we are very close to a deflationary collapse (possibly accompanied by increasing prices in commodities). It is not just the labor market. It is real estate, and the horrific conditions on Main Street. And also that the bad debt never left the system. And Europe. And Japan.
There will certainly be more QE. The government’s not going to shrink willingly. Only the climax of the default will do that.
I don't understand why you say this?
Everything I buy has gone up substantially in price. It is obvious to the consumer that the dollar is worth less than a few months ago. Food, fuel, & utilities are all way up in price. Maybe the gov’t inflation indicators say different, but LaLa Land does not pay my bills.
Obama will not default when he has access to the money printing presses.
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