“Your DEBTs will be forgiven like in biblical times”
http://old.charlestonfishing.com/forum/topic.asp?TOPIC_ID=77971
And yes, PQ, I am ready to hop on the INFLATION train (just not the hyperinflation train)…
Consider me flopped at this point, but it might take a little while to plan out…
Yes, there’s something to be said for paying off debt in cheaper dollars;if our gov’t wants to take that risk.
In view of the latest bank bailout plan; I must question your tenant that the gov’t’s is “brilliant” by forcing inflation as a way to relieve the our crisis. (Perhaps you are speaking tongue in cheek?)
Inflation is nothing more than a another tax; the worst tax of any.
My impression is that they are doing everything possible to continue to bail out their pals in WS by screwing the taxpayers again; and that they greatly underestimate the fury of the American people against WS and Washington.
Foreign holders of our debt will probably not be too happy to be screwed once again this time by inflation and a cheap dollar.
Sea Hunt 2002
Yamaha 150
Sternline, I appreciate the comments, but the way I see it we have a few options:
<> Raise taxes on our children and make them pay for this debt that they didn’t accumulate. This would also crush the economy.
<> Let the entire system falter which could trigger a depression, civil war, etc.
<> Inflate the debt away slowly as a magician would hide a quarter behind someone’s ear.
I don’t think that you can argue that they aren’t taking the risk. Unless we raise taxes, it’s a no brainer that the printing presses are firing. I didn’t believe that lowering interest rates alone would do it because of the credit crunch, but spending trillions of dollars of money that we don’t have to pay for more cops, firemen, and teachers was the icing on the cake for me.
Unfortunately, I think it’s their ONLY feasible option and I think that it’s being executed brilliantly. The practice of debt resets were prominent amongst kingdoms of biblical times where a new king would come into power and erase all debts. Thus, I feel this is exactly what is going on, but I call it “brilliant” because it’s being executed in a brilliant fashion without people realizing what’s going on. Those who realize what’s going on can adjust accordingly.
Furthermore, inducing a weaker dollar will buy us a lot of time (as it won’t happen over night) to get our trade deficit back in order. Thus, the plan will be fabulous over the next 30 years.
ALL ABOARD!!!
Keep in mind J, my last “economic manifesto” called for an 80% devaluation. As scary as that sounds, I would not quantify that as “hyperinflation” on the Zimbabwe or Wiemar scale.
Regardless of how morally corrupt it sounds, inflation is in the playbook, and I believe it s less undesirable than some some of the alternatives. In the meantime, it’s the “what if’s” that could happen along the way, that worry me…
The G20 pushing for a new world currency.
Another 9/11.
Any number of oil rich nations deciding to un-peg from the dollar.
China not showing up to buy T-bills.
Or a combination of of any of the above…
Edited to add:
Almost forgot, I wasn’t able to get that thing in the mail until today, but its on the way…
It’s really difficult to predict anything these days; there are just to many unknowns in our equation.
Many govt’s have defaulted on debt as a way to start over; Russia and Cuba after their revolutions for example.
Castro expropriated my Grandfather’s sugar company in 1960 along with all other American assets-who knows where our current situation will lead.
Maybe we can get away with inflating our debt away-maybe not.
Here’s an interesting link- www.vimeo.com/3722293 -just puts some of the “stuff” that has been going on into perspective.
Sea Hunt 2002
Yamaha 150
quote:
Originally posted by sternlineIt’s really difficult to predict anything these days; there are just to many unknowns in our equation.
Many govt’s have defaulted on debt as a way to start over; Russia and
It is not difficult to predict the inflation that is coming down the pipes. It’s basic Keynesian economics. It’s the FED playbook. If we default, it’s more of an “endgame scenario”. Think regime change or some major geopolitical event. There is way too much at stake for this country to “choose to default”, and it is evident by the FED and Treasury’s actions, that default isn’t in the cards…
And btw, I’d like to take this time to remind skinneej that on the twenty fifth day of February in year two thousand and nine I said:
“we’re heading towards 650 sooner than later IMO.”
The bottom was 666 on the S&P. I was 16 points off, but the phrase “good enough for government work” comes to mind…
If we close above 815 next wednesday (End of quarter, end of month) I think the 666 botttom will be safe for awhile.