I’m no economist so I can’t comment on your observation but this morning’s CNBC article is easier to get my brain around as it equates directly to the level of my business revenue right now, today! Also, the $8k tax incentive goes away soon but that didn’t seem to help much anyway. All this doesn’t seem to bode well for the RE future.
That “inflating away national debt” scheme seemed to work out pretty well for Wiemar Germany. ( other than the starvation, political unrest, wheel barrows of money for a loaf of bread, a world war, massive unemployment, collapse of manufacturing and uncle Adolf of course)
In a recession, when prices aren’t rising anyway, what is so wrong with inflating the money supply and leaving the Chinese with dollars that aren’t worth as much because we printed so many? How does this strategy harm Americans?
We are likely in a deflation mode for some assets but eventually that printed money will actually get into the economy and serious inflation is the likely to result.
Right now much of that printed money is sitting on the banks balance sheets and not being lent out.
inflating debt away is somewhat effective - but only for a short time.
I actually think we are in a deflationary period. Deflation is defined as too many goods chasing to few consumers (or markets). If that doesn’t describe the current business environment - well, nothing describes it better.
If I’m right, we have economic deflation balanced by gov’t induced inflation. That keeps us stable, right?
It’s a recipe for disaster.
We can’t spend our way out of this recession. That’s what got us into this recession.
Well, I agree, you can’t spend your way out of a recession… but you can print your way out of your debt.
Suppose you borrowed $250K to buy a home. Wouldn’t it be great if the government multiplied the currency 10 fold, making the dollars you pay the bank with worth only 10 cents each. Everything would times by 10. Bread would cost $20 a loaf. Inspections would cost $3500. Gold would be at 11,000 an ounce. If you add a zero to everything, what would be the problem?
Under that scenario, the only person screwed would be the bank holding your mortgage. You could pay them off easily… as paying off a $250K note would feel like you are paying off a $25K note once the monetary supply is multiplied 10 fold.
So if I get this right, China, with our help has just overrun us with cheap imports. So now in retaliation, we are no trying to overrun China with are own cheap imports, in this case Dollars… Brilliant…
What about those on fixes incomes like pensions, SS and Bonds? Their money is instantly worth 1/10 of what it was and they would all be eating cat food if they were lucky.
If they rent they will be out on the street.
If they only have only SS they gov will have to increase it by 10 times to keep even and where does that money come from when it’s already broke?
Sure we pay off our foreign creditors with cheap dollars but we will never be able to borrow again. Ever.
This will also result in a weak and devalued $ and something else will become the international reserve currency.
I WOULD JUST LIKE TO GO ON RECORD AS BEING THE FIRST TO MENTION “WIEMAR GERMANY” AND THE WHEEL BARROW OF MONEY FOR A LOAF OF BREAD IN THIS DISCUSSION . . . . . . . MICHAEL!:twisted:
"That “inflating away national debt” scheme seemed to work out pretty well for Wiemar Germany. ( other than the starvation, political unrest, wheel barrows of money for a loaf of bread, a world war, massive unemployment, collapse of manufacturing and uncle Adolf of course)