Posted on 04/11/2011 7:17:35 AM PDT by SeekAndFind
The ostrich like approach is not looking at debt but they think one can spend out of debt however A good old fashioned major war is about to start.
That chart's been showing up a lot lately, and I was wondering why it only tracked commodities and Fed purchases for two years. Here's the comparison going back four decades:
--apparently the 'marekts' don't really have anything to do with Fed purchases after all.
.....We have to continually refinance the debt and will get killed on interest charges .....
I didn’t say it would be easy or even possible. It seems however to be the consensus course.
It would also reduce real wages by that amount. The Country might owe less, but the citizens will be much poorer. Wages rarely come close to increasing at the same rate as high inflation.
I want to go long but I just can’t pull the trigger.
Everything is at the mercy of forces beyond any market control and until the fed decides about QE we won’t know about that factor either - by then that will be factored in and it will be too late to buy.
I’m sitting this one out, but if I had to choose I would go long again.
I agree.
Inflating/defaulting is the only way out of this mess.
It's a way to tax everyone without the need for legislation.
As always, the poor and middle-class will be hit the hardest.
(They may revolt though)
Yep, you speak truth. I agree with every word you wrote. The currency devaluation is by design. It is the only politically palatable form of default. We just have no clue if they can navigate the minefield and pull it off per plan. There will be unintended consequences - we just don’t know what they will be whether we lose reserve currency status, initiate hyperinflation, whether it fails and we deflate, or what.
But yes, this is strictly by design. They want 10% inflatino for several years to re-inflate housing prices and to shrink the relative scale of the national debt.
I always thought the threats to disrupt some family event were real, just because they were outrageous enough to be denied and portrayed as paranoia. What better way to take Mr. Perot down? It was a lesson in media perception games, and they've been roundly attacking Sarah Palin and Michelle Bachman and others and trying the same Alinsky tactics on them that were used on Ross.
Now, if people would just pay attention and apply their lessons for a change, maybe this whole mess can be straigntened out with a minimum of blood in the streets.
-——but the citizens will be much poorer———
I will agree to poorer. Much poorer, perhaps not.
Here is Bert’s unified theory of inflation......
The union clamor is for raises. During the period of low/no inflation, the complaint has been “ we get no raises”. Those who excel get raises. Those who plod along do not. The plodders want raises. They will get raises because in addition to dealing with increased material and energy costs, if companies do not provide raises, the good people holding jobs will move. Even in an economy with excess labor, the good and the plodders will be more valuable than the mediocre.
The unions I think welcome inflation because they will claim credit for a breakthrough that finally raises wages albeit across the board.
Then there is the health care problem. I don’t know how it is affected but my gut tells me that inflation will sweep some of the problems under the inflation rug. I don’t know which problems or how, but suspect it will happen.
The same is true for housing in spades. A general inflation will float the underwater loans back to the surface. The inflation might not end the spate of foreclosures, doomed in any event, but it will save many in the areas where prices declined precipitously. At least, the very least it will provide a faint light way down at tunnels end, and believe it or don’t, hope that the situation is improving.
One really terrible problem is state retirement benefits. If they are not inflation adjusted the burden will dissipate and maybe become tolerable. The removal by law of the inflation adjustment factor can be made politically palatable.
Finally, and proof of malice aforethought, those who will lose are the creditors, lets call them the banks. The banks will be the losers as their loans are repaid in $$ that are devalued. Not to worry for the bankrs......... they were compensated before the inflation. They are already whole. The TARP and the stimulus loans took care of them at the outset.
I do not believe there will be national economy killing hyperinflation in the USA. I think there will be a world epidemic and there will be revisions to the current status quo but it will not be terminal.
Yep. They're going to 'break eggs and eat omlettes'.
Unfortunately, the eggs that are getting broken are 'nest eggs'.
Orwell described it as Reality Control.
It only takes a little chaos, really, the 'reality control' is done by the media, which can portray one city block of unrest as an entire city in flames and pipe it into your living room, with full hyperbole about how there is 'widespread unrest', 'looting', and 'lawlessness', and how 'the death toll may reach the thousands' (note: may is the key word, in case anyone considers them liars). Perception is key.
OTOH, if the 'trains keep running on time', no one will believe there is a problem until it is too late.
I've been expecting this for a while.
The only way to meet the numbers pledged in obligations such as Social Security for the Baby Boomers after buying votes wholesale with the welfare teat (and slaughtering 45,000,000 other contributors via abortion) is to inflate the currency so the numbers can be met.
That and a C-note will get you a cup of coffee, soon (maybe).
I keep a quadrillion dollars (Zimbabwe) on my desk as a reminder that currency is only worth what you can get for it.
Maybe when the Caliphate attacks we'll have the war, too. Unfortunately, we're running out of other places to fight it.
True, Soros may glory in it, but it is the political and business powerbrokers of America that are responsible, aided by a foolish electorate.
In a nutshell, we beat ourselves.
An excellent example of reality control is watching the BBC reporter report on the collapse of WTC 7 about 20 minutes BEFORE it collapsed and can see in the video in the background.
http://www.youtube.com/watch?v=PNK1V6S2cbo
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