quantitative easing is the Feds cure for deflation actually. If you don’t think we’re in a deflationary spiral, take a good hard look at the value of your home today and compare it to the value of your home a few years ago. I read a really good article over at USAGold regarding this situation of competing hyperinflation and deflation actually. here’s the link if yer interested:
http://www.freerepublic.com/focus/f-chat/2340851/posts
This from the article: “When fiat money economies break down, inflationary and deflationary tendencies blend producing what appear to be conflicting symptoms. As someone once said, it doesn’t matter the color of the cat. Black or white, it still catches the mouse”.
That all depends where you live. If you live in one of those areas where housing prices shot up 300% or more over the past few years, of course they are dropping. Some places have dropped beyond that 300% back to 70's prices. I've seen some auctions where new 1800 sq ft bungalows are selling for $29k.
The inflationary spiral is far more prevalent in everyday life. Groceries are up 30% on average over a year and a half ago. Just about every consumer product you buy is up 10-20% over last years prices.
Housing is just the exception. People can afford to buy houses even if they drop to 70's prices cause they have no jobs.
No jobs equals no government revenues.
Complicating that, the rapid expansion of government has increased the cost of government horrendously, while revenues have dropped horrendously. we can't even pay the interest on our debt, And the government can't borrow any more money. So it prints it to pay the bills, but that just reduces the value of the dollar. Severe hyperinflation is inevitable, especially because there is no end in sight of this government stopping this huge amount of spending. With this health care bill, tax and cap, we are going to have hyperinflation like Zimbabwe.
The thing is the monetarists, like Friedman/Greenspan, thought that pseudo scientific, socialist money planning by a supposed scientific elite would stabilize the value of money and dampen pre 1913 Federal Reserve depressions and panics. So far they have been wrong. The swings have been worse.
Almost every country in the world, all are now fiat paper, central bank, monetarists. I’m feeling that they will fail, in a novel, unthought way.
We may get to a point were even united action( read economic/political manipulation ) by all the Central Paper Money Banks may not only not work, but cause the whole world to blow up.
That’s the problem with centralized systems.