Replies

What is the risk of economic refugees?

Not much, IMHO. For a variety of reasons I don't see the immigration floodgates opening for them, or very many of them desiring to live here, even if the European standard of living deteriorates dramatically.

Or capital flight to the US from Europe worsening our inflation rate?

IMHO, I don't see that being significant and not very direct.

Most of our inflation potential is because of our high standard of living relative to other nations; there is still a lot of room, from the politician's point of view, to squeeze the population with inflation before they can't afford to eat. In America, even the poor have the "challenge" of obesity. The U.S. government and it's enablers are already well on their way in pushing inflation higher. The ethanol program is a great example, as well as obammycare, dude-frank, etc. The squashing of small business and competition, and the sweetheart deals that big business cronies get (like power and phone companies having increases happily granted by their government "regulators") also help to force consumers to pay more while getting nothing extra in return.

To drive up inflation, that capital would need to snake it's way to investments that pushed commodities higher, or somehow extracted more dollars from consumers while not delivering any additional usefulness to them. It all would not end up in those kinds of investements, though. Given conventional investing wisdom, a large portion would wind up being invested in "emerging markets", perhaps helping to build another "ghost city" in China. If it actually got invested in business operations inside the U.S. and increased employment, of course, that would be good; but all this is too complex, IMHO, to say inflation would necessarily be driven higher.

Also, there are a few alternative places for Europeans to keep their money.

Of course, any capital that is invested in government debt (some undoubtedly would wind up there) is part of the TreasuryPonzi(tm). While it's technically not "creating" money, it's diverting capital away from true investments in business operations and instead by borrowing against future tax revenues not receieved by the government yet. Since surpluses that pay down debt appear to be out of the question, IMHO it has the effect of money creation since it is generating an extra trillion in current economic spending by borrowing from bondholders that, when the music stops, won't be paid back in full.

On sort of another note but sort of always related, economic success ultimatly all boils down to "real" productivity (not many economists get this, of course), on the personal, corporate and national level.