Posted on 02/12/2010 9:45:53 AM PST by UltraConservative
It seems that this morning, everyone is encouraging the US to print its way out of recession. First, there's the IMF's Olivier Blanchard:
The International Monetary Fund's top economist, Olivier Blanchard, says central bankers should consider aiming for a higher inflation rate than they do currently to lessen the chances of repeating the recent severe recession.
He suggests that the baseline rate in good times be 4%, not 2%. Then, there's Rachel Beck of the AP:
The dollar has surged to an 8-month high against the euro, and is also rising against other major currencies. If it keeps strengthening, that could damage the already fragile U.S. economic recovery. Gains in the U.S. currency will hurt exports, which are big contributors to the U.S. economy right now. American companies will find it more expensive to sell goods and services abroad, and imports here will be cheaper -- good for consumers, but bad for businesses.
This is absolutely idiotic. There are natural consequences to inflating your currency that will dump the US into a prolongued recession (yes, I'm an Austrian School guy, not a Milton Friedman Chicago school guy). First, it devalues everyone's savings. Everyone who has money in the bank can kiss it goodbye -- your money becomes worth less than it was before.
Second, it increases exports, but at the expense of domestic prices and consumption (because, as stated, your money is worth less than before). For all President Obama's focus on exports, as of October 2009, domestic spending accounted for 71% of US GDP. So we're supposed to sacrifice 71% of our GDP for perhaps 14% of our GDP. This makes no sense.
“Everyone who has money in the bank can kiss it goodbye”
I think that’s Obama’s general idea. Poor people need the giverment. That is not a misspelling. It’s the precursor to taking away all of our freedoms.
Well this should be an example, right? Everyone write checks for stuff that you don’t have money in the bank for ... then plead your case with the bank that the government is doing it so why can’t we .....
Might as well use Monopoly money.
The government, in effect, is printing counterfeit money, but on a scale that so-called ‘counterfeiters’, added all up together since the beginning of counterfeiting, could not have dreamed of. Is this perspective of mine unsound, is there anything wrong with it? Why is it still called
“deficit spending?”. Why has NO ONE called this just what it is? -—rhetorical question-—no one calls it what it is because it’s the government doing it. and that of course is because it’s for OUR own good, not THEIRS. After all, it’s we who got ourselves into this “mess”.(Long long pause..........)
By electing THEM.
Owebama HAS to let the dollar weaken in order to pay off his Chinese bankers...that’s why I like GLD
A recycled thing from me:
I believe the gov’t is going to have to print money. Already down about $14 trillion on deficit, and another $75 - $100 trillion coming in social security and medicare bubbles. This isn’t counting the ongoing yearly deficits, infrastructure needs, and relatively declining population.
I suspect we will all get a monthly BIG (Basic Income Grant) check, for necessities of life like food, shelter, utilities, and misc cash for other stuff. Health care will be single payer gov’t. Then, we can work additional income if we desire.
Don’t like it, but no way gov’t can balance budget without massive societal disruption. No way to collect enough taxes to pay the bills. I am practicing guitar so I can use my BIG check to travel around as a wandering poet and balladeer in New America. My first song:
BIG Check Blues (Annotated)
Written by the Freeper, parsifal.
(Spontanioso Bluesio)*
((This is a typical 12 bar blues song in the key of E. First line is E. Second line is A and E. Third line is B7 and E. By choosing this key, the Poet is forcing lazy guitar players to use their pinky on the B7.)
Gots my BIG** check this morning, already got the blues.
Gots my BIG check this morning, and already got the blues.
My BIG check’ ain’t big enough to even buy no booze.
When I first got my BIG check, I got me some womens, too.
When I got my BIG check, Lawd, I got me some womens, too.
Now my womens has left me, and Lawd I’m feeling blue.
Lawd, this nasty inflation sure is deflating me.
You know, this nasty inflation sure is deflating me.
I done shrunk so much I ain’t half the man I used to be.
In the good old days, the BIG check was the life of me.
When it first come out, Lawd, that BIG check was the life of me.
Paid my room and board and my medical care was free.
Didn’t need no time card, didn’t need no big boss man.
Lawd, didn’t punch no clock - didn’t need no big boss man.
Took my Dobro*** out serenading all across the land.
Lawd, I sang some songs and was alley cattin’ every night.
Yeah, I sang them songs and went Tom cattin’ every night.
Lawd, I had enough money to treat my womens right.
I needed some whiskey and needed some COLA’s, too.****
Lawd, I drank some whiskey but I needed those COLA’s, too.
Til ‘flation-itis set in, Lawd I caught the Weimar Flu.*****
Now hyper-inflation’s crashed the world down “round my head.
Lawd, that hyper-inflation’s brought the world down ‘round my head.
Need a wheelbarrow of BIG checks just to buy a loaf of bread.
If it gets much worse, I gots to get a job, Oh Woe!
If it gets much worse, I gots to get me a job, Oh Woe!
No Tom cattin’ “round with my old Dobro, no mo. . .no mo. . .
* Italian for “In a spontaneous blues style”
** “BIG check” is a Basic Income Grant check. The Poet is taking some poetic license as the money will probably come in the form of a renewable debit card.
*** Dobro is a registered trademark of Gibson Guitars of America.
**** COLA stands for “Cost of Living Adjustment”
***** There is currently no actual influenza variant known as the “Weimar Flu.” The Poet specifically disavows any implied aspersions upon any German, living or dead. There is no communicable disease known to be carried specifically by those of German descent. “Weimar” here refers to the hyper-inflationary period of the Weimar Republic.
parsy, who is shameless, and proud of his song, so please forgive the re-posting of this
The Depression of 1920 was huge yet very short-lived.
Funny, seems nobody has heard of the Depression of 1920.
That’s because the gov’t stayed out of it, and the market corrected itself in a few months - nothing much to remember about it.
Funny, what works doesn’t make news ... or history ... so few are inclined to repeat it.
Didn’t I hear some economist point out recently that there is NO INFLATION when you’re on the Gold Standard?
It works sort of like this — Each ounce of gold is worth X number of dollars. No additional gold means no additional dollars, unless you allow the pinheads in government to adjust the exchange rate.
No inflation ... ever? Sounds pretty good to me!
(But I may be wrong, in which case please ignore all of the above.
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