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The Future Is Deflation
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There should be a modest uptick in GDP in either in the 4th quarter 2009 or the 1st quarter 2010. This will mark the end of the current 20 month-long recession, but not the end of the crisis. The blip in growth doesn’t mean that the troubles are over or that the economy is on the way to recovery. It simply means that Obama’s $787 billion fiscal stimulus is beginning to kick in, giving a boost to consumer spending and generating short-term economic activity. Regrettably, when the stimulus runs out, the economy will slide back into negative territory. That’s because the US consumer has crossed an important threshold and no longer has the ability to drive the economy through debt-fueled consumption. The data indicates a critical change in consumer behavior which portends a shift away from the current model for economic growth. It’s a whole new ballgame.
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| The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest. | |
From the mid-1980s to 2007, the ratio of debt-to-GDP rocketed from 165% to to over 350%; more than doubling in that same period. The build-up of personal debt follows the exact same trend-line as the aggregate profits of the financial sector; they’re opposite sides of the same coin. Financial institutions increase profitability by expanding credit and inflating asset bubbles, not by allocating capital to productive enterprises. Their business model is inherently flawed. Speculative bubblemaking is Wall Street’s method of shifting wealth from workers to the investor class. It never fails. It’s the reason why 42 states are now facing budget shortfalls, unemployment has risen to 9.5 percent, and $45 trillion has vanished from global equity markets. Financialization has created a global crisis, crushed consumer demand, increased systemic instability, and put the economy into a nosedive.
In the last decade, the shifting of wealth from one class to another has greatly accelerated due to deregulation and the Fed’s low interest rates. Stagnant wages have forced reluctant participants into the market seeking a better return on their savings, while lax lending standards and easy credit have seduced workers into increasing their personal debt-load. All of this has been done by design to ensure the profits for the few over the well-being of the many.
Wall Street has conjured up myriad complex debt-instruments (derivatives and securitization) which have been used to enhance leverage by many trillions of dollars so that financial mandarins and hedge fund managers can skim lavish bonuses and salaries on the front end before the Ponzi scam implodes. In the present crisis, the situation came to a head when two Bear Stearns hedge funds defaulted in July 2007, creating pandemonium in the stock markets while credit markets froze over. As housing prices fell and unemployment rose, households were left with little choice but to slash spending to pay-down debts. The sharp downturn has dramatically changed consumer behavior and lifted the savings rate to 6.9% in the last month, a 15-year high. Savings are expected to continue to increase despite the Fed’s attempts to restart the economy with zero-percent interest rates. A recent “Economic Letter: US Household Deleveraging and Future Consumption Growth” by the Federal Reserve Bank of San Francisco outlines the conditions which have triggered this dramatic change in consumer behavior. Here’s an extended excerpt:
“U.S. household leverage, as measured by the ratio of debt to personal disposable income, increased modestly from 55% in 1960 to 65% by the mid-1980s. Then, over the next two decades, leverage proceeded to more than double, reaching an all-time high of 133% in 2007. That dramatic rise in debt was accompanied by a steady decline in the personal saving rate. The combination of higher debt and lower saving enabled personal consumption expenditures to grow faster than disposable income, providing a significant boost to U.S. economic growth over the period.
In the long-run, however, consumption cannot grow faster than income because there is an upper limit to how much debt households can service, based on their incomes. For many U.S. households, current debt levels appear too high, as evidenced by the sharp rise in delinquencies and foreclosures in recent years. To achieve a sustainable level of debt relative to income, households may need to undergo a prolonged period of deleveraging, whereby debt is reduced and saving is increased.
Beginning in 2000, however, the pace of debt accumulation accelerated dramatically…Rising debt levels were accompanied by rising wealth. An influx of new and often speculative homebuyers with access to easy credit helped bid up prices to unprecedented levels relative to fundamentals, as measured by rents or disposable income. Equity extracted from rapidly appreciating home values provided hundreds of billions of dollars per year in spendable cash for households that was used to pay for a variety of goods and services….Rapid debt growth allowed consumption to grow faster than income.
Since the start of the U.S. recession in December 2007, household leverage has declined. It currently stands at about 130% of disposable income. How much further will the deleveraging process go?
Going forward, it seems probable that many U.S. households will reduce their debt. If accomplished through increased saving, the deleveraging process could result in a substantial and prolonged slowdown in consumer spending relative to pre-recession growth rates. (”U.S. Household Deleveraging and Future Consumption Growth, by Reuven Glick and Kevin J. Lansing, FRBSF Economic Letter”)
Household wealth has dipped $14 trillion since the crisis began. Wages are slowly retreating and unemployment is at 9.5% a 25 year high. Also, the percentage of home equity has fallen below 50% for the first time on record. And—since one-third of homes have no mortgages (100% ownership)–the remaining homes have only 12% equity. If prices continue to drop in 2010, the vast majority of homeowners will be underwater presaging a sharp rise in the number of foreclosures.
In the last 18 months, the ratio of debt to disposable income has only eased to 128%, which means that it will take at least a decade to rebuild balance sheets enough to resume spending at pre-crisis levels. It’s going to be a long hard slog even if the stimulus works according to plan, especially since unemployment is headed for 10% by the end of September and higher by 2010. Household deleveraging will continue regardless of positive developments in the markets, which means that the economy will reset at a lower level of activity. This precludes any chance of a strong recovery. According to David Rosenberg, chief economist for Gluskin Sheff :
“By our estimates, there is up to another $5 trillion of household debt that has to be eliminated in coming years and that process is going to require that consumers go on a semi-permanent spending diet. Companies see this, which is why they are not just downsizing their payroll, but have also cut the workweek to a record low of 33.1 hours. Fewer people are working and those that are still working have seen their hours dramatically cut this cycle….
The op-ed column by Bob Herbert in the Saturday New York Times really hit the nail on the head on this whole ‘green shoot’ issue — how can there be ‘green shoots’ when the labour market is deteriorating at such a rapid clip fully nine months after the Lehman collapse. The full brunt of the credit collapse may be behind us, but please, the other two shocks, namely deflating labour markets and deflating home prices, are very much still front and centre. For every job opening in the USA, there are more than five unemployed actively seeking work vying for those jobs. That is unprecedented and nearly double what we saw at the depths of the 2001 recession. The official ranks of the unemployed have doubled during this recession to 14 million and if you take into account all forms of labour market slack, the unofficial number is bordering on 30 million, another record. For those who still believe that we somehow managed to avoid an economic depression this cycle because of a 13% fiscal deficit/GDP and a pregnant Fed balance sheet, the Center for Labour Market Studies at Northeastern University estimates that the real unemployment now stands at 18.2%, which is actually higher than the posted rate at the end of the 1930…
What makes this cycle “different” is that three-quarters of the workers that were fired over the last year were let go on a permanent, not a temporary basis. A record 53% of the unemployed today are workers who were displaced permanently — not just temporarily because of the vagaries of the traditional business cycle. This means that these jobs are not going to be coming back that quickly, if at all, when the economy does in fact begin to make the transition to the next expansion phase.” (David Rosenberg chief economist Gluskin Sheff)
Rosenberg’s comments should be carefully considered in relation to the scaremongering about inflation by conservatives and alarmists in the media. Inflation is not serious danger for the foreseeable future. The velocity of money has collapsed and deflation is pushing down asset prices and wages. Every sector is contracting. Without stimulus, the economy will remain in negative GDP. Here’s Scott Patterson from the Wall Street Journal:
“A rule of thumb is that inflation doesn’t become sticky until the unemployment rate dips below 5%. Since 2001, the Nonaccelerating Inflation Rate of Unemployment, or NAIRU, the rate at which economists estimate the labor market can trigger inflation, has stood at 4.8% unemployment, according to the Congressional Budget Office.
In the first quarter, the spread between the NAIRU and the actual unemployment rate averaged 3.3 percentage points, the widest spread since 1983, when unemployment hovered around 10%. A high spread suggests the labor market needs to get stronger before inflation is a concern.” (”Inflation fears? Not in this job market”, Scott Patterson, The Wall Street Journal)
- A d v e r t i s e m e n t
The inflation hobgoblin is a political ploy by the Republicans to derail Obama’s recovery plan. And, in some respects, it’s working. Public support for a second stimulus package has withered, and with it, any hope for sustained rebound. Pressure on wages and prices are growing while the effects of deflation are becoming more and more apparent. Delinquencies, defaults, bankruptcies and foreclosures are all up, while state budgets buckle and joblessness mushrooms. The Republicans are following the neoliberal handbook, trying to crash the economy so that public assets can be privatized and public services terminated They’re being helped in their campaign by bailout-weary citizens who don’t understand that short-circuiting government spending during a deep recession can precipitate a bigger catastrophe.
That said, liberal economists have made poor case for more stimulus. Stimulus is not a panacea; it’s merely a bridge from Point A to Point B. Government spending can take up the slack in demand, but it can’t fix the economy’s underlying problems. That takes policymakers who are willing to do-battle with the big banks and re-regulate the financial system. No one in the Obama administration is willing to perform that task, so the economy will continue its downward drift.
Presently, the banks have more than a $1 trillion in toxic assets on their balance sheets and the wholesale credit markets (securitization) are in a shambles. Nothing has been done to separate commercial from investment banks, force all derivatives onto regulated platforms, unwind insolvent financial institutions, establish prices for complex securities, increase capital requirements, or put an end to off-balance sheet operations.
If the underlying problems are not going to be fixed, than why are liberal economists so eager to use their talents to minimize the effects of the recession? They’re just making it easier for Wall Street huckster’s to start gaming the system again. The job of progressive economists is to promote a more equitable system that reduces inequality and provides for the basic material needs of all its citizens. There’s no sense in cheering on stimulus if it just perpetuates the same dog-eat-dog system.
The subtext of the financial crisis is class warfare, a fact that mainstream economists would rather ignore than invoke the musty imagery of disheveled revolutionaries and Soviet-era repression. Nevertheless, during the Bush years, the chasm between rich and poor widened to levels not seen since the Gilded Age. Now the top 1 percent of wealth holders own more than twice as much as the bottom 80% of the population. All of the real gains in national income, total net-worth, and overall growth in financial worth have gone to the same 1 percent.
But the strides in personal enrichment have come at great cost. The US consumer, long considered an inexhaustible resource, is tapped out. Without job security and access to easy credit; consumer spending will slow, prices will fall, demand will flag and the economy will tank. There won’t be a recovery, because pre-crisis levels of consumption will not return; that much is certain. Sustainable growth requires higher wages and longer working hours; neither of which are likely anytime soon. The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest. The future is deflation.
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July 14th, 2009 at 9:26 am
“crazy fun breadlines” lol, I don’t think it will be quite that exciting
July 14th, 2009 at 9:41 am
Another sobbing real estate tycoon. I feel almost as sorry for them as the banksters.
Where were these deflation guys when the engine of the new economy, technology, was going into the crapper? Oh yeah, they were telling everyone there’s no problem because the price of their home was going up.
July 14th, 2009 at 9:48 am
Get you solar powered system for under $1000.
http://www.ogrecontrol.com
danny2 Reply:
July 14th, 2009 at 1:09 pm
hell yeah my buddy is getting some of these…
July 14th, 2009 at 9:53 am
Anyone know how to invest to hedge deflation? We need to find a way to profit off of their agenda.
July 14th, 2009 at 9:53 am
Well, it looks to me like the criminals on wall street, the banksters, and their lackeys in Washington have just about played this game out.
I’ll help all I can with this. I spend no money I don’t absolutely have too, and I’m always mindful of new ways to stop doing that.
Screw them and their scam. Screw them and that Obongo Congo and all of his Nazi advisers. So we are witnessing the rise of the fourth reich? So here we go again!
Time to get it on! Read up on your WW-II history. Learn how the partisans worked, learn guerrilla warfare. The enemy is here! Get ready to defend your nation!
LONG LIVE THE REVOLUTION! GOD SAVE AMERICA!
OzyBoy Reply:
July 14th, 2009 at 12:25 pm
And then you’ll get an EX-wife. And then you’ll be part of THEIR system against your will.
madman Reply:
July 14th, 2009 at 1:04 pm
Oh yeah,
Ex Wives will bankrupt a man faster than a Bank could ever think of.
I’ve never been married, but, my friends have… my friend lost his house, and gained 100K in debt, when his wife kicked him out.
Save that cash, buy your food, guns and ammo… I’m sure we’ll all find useful, productive, loving wives, if and when the SHTF, till then, improve your mind, and your aim… we’ll all need them to be as sharp as possible coming soon.
Deflation will basically make prices FALL, especially on things like, you guessed it, gold and silver… so, when it hits the 200 an ounce range for gold, buy some… when silver is worth a dollar an ounce, buy all you can. Silver is high demand in the electronics industry, so eventually, it will be worth 10 times what it is selling for now. Just don’t waste your money, until the prices fall…
It’s a much better investment to get some food, water, etc in preparations for all the fun stuff happening in September.
Corporate Death Reply:
July 14th, 2009 at 12:27 pm
“Well, it looks to me like the criminals on wall street, the banksters, and their lackeys in Washington have just about played this game out.”
NO. They still have half of everybody’s money in the 401K. Wait for that egg to crack and the deal is done. They completely stole decades of accumulated middle class wealth upon completion of the “crash”. It’s coming.
July 14th, 2009 at 9:55 am
The worlds economic planned downturn is brought to you by the same criminals and murderers that brought you the commercial planes on 9/11. There were no commercial planes on 9/11. Any plane-hugger that says there were commercial planes on 9/11 should be charged with conspiracy to murder. There were NO commercial planes on 9/11. NOT ONE SINGLE SPECK OF DEBRIS FROM ANY OF THE 4 PLANES FROM ANY OF THE 4 LOCATIONS ON 911 HAS EVER BEEN VERIFIED IN ANY WAY BY ANYONE ON THE PLANET. There were no commercial planes on 9/11. These same economic terrorists that are causing this downturn have committed murder on a global scale.
Corporate Death Reply:
July 14th, 2009 at 12:25 pm
401k was biggest scam in history. Middle class wealth put in “risky” instruments completely ripped off by the investment class. Thanks for pushing that one gubment. The people just do as you say.
The Anti-Beast Chip Man Reply:
July 14th, 2009 at 12:50 pm
Okay Dahh!! What type of planes where they then!!?? Were they halograms!!?? Or empty planes loaded with plenty of fuel for the great explosion and fire!!?? I would say that if they planes were commercial and had people in them; that some of the people would have remained intact and fell to the ground!! Though smashed up; they still would have been body parts!! Even if badly burned; there would have been body parts!! You could be very right !! I would say that they were taken to a political European prison and are still there waiting for the time that they will a choice to be a part of the new world order or be executed!!
freedom suffragette Reply:
July 14th, 2009 at 1:20 pm
I agree– the planes were an optical illusion that the media coordinated to distract the public from the fact that they were likely missiles. Supposedly some official FEMA videographer (who just wrote a book “El Perseguido” documenting his experiences/ consequences in Spanish) got footage of some turbines in debris, however, he contends that they were entirely too small to be commercial aircraft. What I still wonder to this day is this: IF the planes were not the commercial aircraft that they were claimed to be, then what really happened to those planes and passengers? What about the audio tapes of messages that were received by loved ones of the passengers? Were they led to believe that the planes they were on were being hijacked only to be transported to a secret location for detention? Most 9/11 videos don’t discuss this part of the mystery… What are everyone’s ideas?
donald Reply:
July 14th, 2009 at 5:30 pm
check out :http://www.voltairenet.org/article160636.html
andhttp://pilotsfor911truth.org/media.html
thanks
jim cunningham Reply:
July 14th, 2009 at 6:05 pm
if you were on a plane hijacked by guys with box cutters, would you just sit there? i wouldn’t. i dont think many other people would either.
July 14th, 2009 at 10:02 am
Most people are in for a lowered standard of living. That is what the globalists want for us and it is happening. The USA, as you know is gone and so is the “The American Dream”.
Corporate Death Reply:
July 14th, 2009 at 12:28 pm
at least bring back my motocross trails…
danny2 Reply:
July 14th, 2009 at 1:15 pm
i know right? they disappear more every year, i got a ticket for riding in a once free open riding area.
July 14th, 2009 at 10:14 am
thats putting it lightly.
July 14th, 2009 at 10:26 am
If I am reading this author correctly, he seems to be saying that the economy is destined to a long slow death. I was hoping for a rather quick crash so that I might see a recovery before my grandchild is ready to leave the nest. However, I won’t waste my time speculating on what might happen; I’ll leave that to the experts like Bob Chapman.
In the mean time, I hope others will do as I have and stock up on food and the other necessities that will be needed in a protracted crises leading to a martial law scenario or a natural disaster; even a common event such as an ice storm can leave a family cold and hungry for weeks; and here in the Midwest we are overdue for another huge earthquake from the New Madrid fault such as happened in 1811-1812. Regardless of the event, it’s always best to be prepared. Do yourself a favor and keep a good supply of food, medical supplies, toiletries, and especially a means to purify water. And don’t forget to have some plan in place to protect your stores; guns and ammo are of little use if you let a thief overtake you while you are off guard.
Just my 2 cents…
OzyBoy Reply:
July 14th, 2009 at 12:30 pm
Thanks infowars staff. That was a great way to promote your sponsors. And I should click your links, not look these guys up on Google, cause then you wouldn’t get your cut right. But hey. I know you need your cut, so I’m ok with it anyway. Just don’t like thinking someone thinks I don’t KNOW money is important for any cause. Cheers
July 14th, 2009 at 11:19 am
Bernanke said on “60 minutes” that we will expertly pull back the money supply the very second we get indications of inflation. Therefore, inflation is not a worry; deflation is. Bernanke himself said this. You gonna believe goldman sachs? ‘ Inflation is a republican plot’???
By 2012 ( arbitrary, not the end of the world) we will have a hyperinflation that the u.s. has never seen. The fools who went long on gold, silver and ammo will be sitting pretty and happily paying capital gains taxes to a grateful and kindly irs. We cant just shut off the tap and recall all that imaginary currency. Near-term deflation (doldrums) leading to hyperinflation ( Mr. Toads wild ride).
notso Reply:
July 14th, 2009 at 12:22 pm
Here’s what mr. “republican plot if obama fails” said in April:
http://www.infowars.com/more-t.....sing-bust/
July 14th, 2009 at 11:26 am
Please remove all posts that are not arguing religion vs atheism or selling something bogus on Ebay. Thanx.
July 14th, 2009 at 12:29 pm
Where will you be living when it all really hits the fan?
danny2 Reply:
July 14th, 2009 at 1:19 pm
the woods
mercyflush Reply:
July 14th, 2009 at 1:58 pm
In the big bad city shivering in the dark with a bunch of latte- sipping trustafarians who have no idea that it has even hit the fan…sad but true. It is actually going to hit the fan this time and I am staying in town.
July 14th, 2009 at 12:45 pm
Household wealth has dipped $14 trillion since the crisis began. Wages are slowly retreating and unemployment is at 9.5% a 25 year high
QUESTION IS : HOW IS THAT WE CAN AFFORD DEFLATION AND NOT TO DEFAULT ? WE NEED A LITTLE BIT INFLATION
July 14th, 2009 at 12:48 pm
we can not afford deflation ,period we will default currency will collapse anyways
we need inflation and we need very high real estate prices ,
July 14th, 2009 at 12:53 pm
That is quite a bunch of crap you’re selling and spamming a comment section to do it too…..Just shameful.!
thriller Reply:
July 14th, 2009 at 4:07 pm
it’s so sad about Micheal Jackson huh? gosh I will miss him.
July 14th, 2009 at 12:58 pm
I have never seen so much praise for soo much Failure!!!
Praise the SEC and Federal Reserve for working with Madoff and Banksters to usher in more power for them to bring in such a wonderful thing called NWO.
Global governance has just been waiting for the right failure to undue prosperity and jobs.
If you ask me which system works better. I would say the old one without their manipulation.
The new direction looks like crap and smells like crap. I think it is crap!!!
Your failure stinks to high heaven!!!
Because when a system works..No one wants NWO!!!
Even when you screw it up, we still ignore your ideas regardless of how many of your puppets call for NWO and global governance.
July 14th, 2009 at 1:01 pm
Are you deft. There has been an uptick because people are using what few extra dollars that they have left to stock up for the collapse of civilization…
QUENTIN SNAVELY Reply:
July 14th, 2009 at 5:31 pm
RIGHT ON JAMES. AND IF AND WHEN TPTW SAY ‘LINE UP AND GET AND YOUR H1N1-00X-2211 SHOT REFUSE IT, REFUSE IT, REFUSE IT, UNTIL THE AUTHORITIES LINE UP FIRST IN A PUBLIC SQUARE AND RECEIVE THEIR INNOCULATION. THEN WE WAIT A WEEK OR TWO AND SEE IF THEY ARE DEAD. MAKES SENSE TO ME.
July 14th, 2009 at 1:27 pm
BOHICA- Bend Over Here It Comes Again. Oh wait, have I said that before?
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July 14th, 2009 at 1:37 pm
ILLUMANTI DEALS SELLS MOST KRUD..
NOW I LOVE THE SITUATION IN THIS f---ED UP COUNTRY
July 14th, 2009 at 1:37 pm
the economy is already hurting big time , just look around the mall areas , the only thing I see moving is gasoline, prescription drugs, and sad to say Washington DC gone wild ….
jim cunningham Reply:
July 14th, 2009 at 6:23 pm
things seem relatively the same in the Boston suburbs. in the city is different though, a lot less traffic on the roads, less activity in the shopping centers.
July 14th, 2009 at 1:41 pm
We will have inflation and deflation at the same time… Anything we own that gives us wealth will be deflated. All consumed goods will be inflated.
they know exactly what they are doing… they are some mother f---ers!!!!!! They need to be brought to justice.
The biggest problem that we have now is that it our government has more to gain doing their will and not ours… That will be changing soon when they realize how limited their days really are. Our government needs to be put on notice that when the s--- goes down they better choose sides wisely!
July 14th, 2009 at 3:02 pm
This guy has it wrong. We have all this money printed, but has yet to be circulated (velocity of money)
Also, US will see commodity prices rise as they become the new currency and in high demand from India, China, and Indonesia.
make your own conclusions Reply:
July 14th, 2009 at 7:18 pm
I read similar argument, essentially you need to look at the global picture, not just the US. The US population is dwarfed by other countries like China and they will be on a steep slope of consumerism (cars, homes, durable goods, etc). Their demand on materials/commodities will far exceed the US pullback and prices for raw material will go way up. We in the US will be getting a double-whammy of a big drop in our biggest GDP contributor (consumerism) while at the same time major inflation.
I’d say, if you are able, by the stuff you want/need now, cause in the future it will cost a lot more relative to your income…
July 14th, 2009 at 3:05 pm
My wife makes our bread.
July 14th, 2009 at 3:11 pm
Bernanke has stated several times, he will no allow a deflationary depression happen again. If the FED has to pump $5k into everyones bank account each month to get spending started again, Bernanke will. There is a decrease in prices in stocks, real estate, cars and other items, but inflation (growth in money supply) is alive and well. Imported items will skyrocket in price, when the dollar collapses due to the hypergrowth in money supply. Only time will tell how this all plays out and when, but storable food is always a good investment.
July 14th, 2009 at 3:32 pm
This guy’s video on youtube has been so popular that Obama
Called him personally. He said that he was very disturbed with the video and
Invited him to the White House. Obama also said he wanted the White House to
Handle the Press and not to talk about the video or the White House visit. That’s interesting.
Watch it now. This may be the best six minutes invested in
Your future
You may have to turn your Sound Control up some.
http://www.youtube.com/watch?v=jeYscnFpEyA
July 14th, 2009 at 3:37 pm
while there are deflationary pressures from unemployment, monetary policy will largely trump all effects with money supply, whether it is contracted or expanded. technology and productivity increases will cause deflation. unemployment will cause deflation. the federal reserve not putting more money in the system while they erase paid principles will cause deflation. likewise, inflation is caused by supply shortages, increase money supply, and low unemployment.
furthermore, small aspects can affect inflation and deflation. for example, commodities. investors buying commodities to protect values of cash can cause inflation. this creates a bubble of excess investory (increased supply), which can start to cause deflation as excess inventory must be sold, and investors start selling commodities. also, the inflation of commodity prices reduces demand, which also has deflationary pressure.
there are deflationary pressures, however, there are other factors in the picture which aren’t certain.
July 14th, 2009 at 3:45 pm
deflation would be frightening unless you have a lot of cash in your pocket. bankruptcy would be rampant. the whole system would collapse under deflation.
July 14th, 2009 at 3:48 pm
wishes
July 14th, 2009 at 4:32 pm
i think that deflation isnt even a concern. bush borrowed more in his presidency than every previous president combined. i think that a f--- load. now Obama and the rest of the dumb asses have spent almost 10 trillion to so called “fix the economy”. our total debt here in the USA, that’s real debt meaning EVERY cent spent and projected is around 69 trillion, and you wonder why almost every country in the world wants to get rid of the dollar as the reserve currency. Obama wants to spend another trillion on health care reform. WTF? the dollar has seen a 97% devaluation since 1913 because of the quantitative easing the fed does. which really is news speak for we are artificially inflationing the money supply..
Austrians argue that the state uses inflation as one of the three means by which it can fund its activities (inflation tax), the other two being taxation and borrowing.[32] Various forms of military spending is often cited as a reason for resorting to inflation and borrowing, as this can be a short term way of acquiring marketable resources and is often favored by desperate, indebted governments.
we are f---ed and inflation is baked into the f---ing cake
July 14th, 2009 at 5:23 pm
i think that deflation isnt even a concern. bush borrowed more in his presidency than every previous president combined. i think that a f--- load. now Obama and the rest of the dumb asses have spent almost 10 trillion to so called “fix the economy”. our total debt here in the USA, that’s real debt meaning EVERY cent spent and projected is around 69 trillion, and you wonder why almost every country in the world wants to get rid of the dollar as the reserve currency. Obama wants to spend another trillion on health care reform. WTF? the dollar has seen a 97% devaluation since 1913 because of the quantitative easing the fed does. which really is news speak for we are artificially inflationing the money supply..
Austrians argue that the state uses inflation as one of the three means by which it can fund its activities (inflation tax), the other two being taxation and borrowing.[32] Various forms of military spending is often cited as a reason for resorting to inflation and borrowing, as this can be a short term way of acquiring marketable resources and is often favored by desperate, indebted governments.
we are f---ed and inflation is baked into the f---ing cake
July 14th, 2009 at 5:48 pm
The White Beast is coming to kill you!!!
July 14th, 2009 at 8:56 pm
I don’t think the author understands monetary theory at all. The Obama “stimulus” will cause massive inflation. This is because the vast amounts of money that was given to the bankers will be spent on real assets. Eventually everyone will be left with a pile of paper and nothing of real value.
July 15th, 2009 at 2:16 am
What’s this for article?
Obamania?
Stimulus programs never work, is has nothing to do with campains for the GOP
July 15th, 2009 at 7:29 am
I’m beginning to wonder if the staff of Infowars even reads something before they post it.