china was quietly stopped buying our debt and is now buying commodities (with our dollars). add to this the fed printing money 24/7 and record deficit spending and you have only 1 possible outcome: Hyperinflation and complete economic collapse. I don’t think the average american understand economics enough to understand why this is the case, but I do think that they have a instinctual feeling that things aren’t right and we’re headed for rough times. Unfortunately, people don’t know just how rough. If they did, many of our “leaders” would find themselves not only out of office, but also out of breath.
This is certainly a forgotten point in most news coverage, and even in most business news coverage. Most financial historians would say that we have to be into a recover (and perhaps well into a recovery) for inflation to begin to set in. They point to past economic downturns, like the GD when deflation was actually the problem. And in all fairness, so far deflation has been more of a problem with this latest downturn than inflation.
But, to borrow an overused idiom, we are in a new paradigm. Never in the history of the country (perhaps in global economic history) has one country (the US) owed another country (China) so much money. If I didn't have to actually live through it, it would/will be fascinating to see where this takes us.