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False dilemma. Let the bubble deflate slowly in a controlled way, it is not a choice between total collapse vs. continued destabilization. The only problem is political will.
Especially as a counter to Pandemic necessary deficits, many central banks all over the world are buying vast amounts of their nation's debt. As per Trump/Mnuchin, our own Fed has of course pursued this course and now again has an expanded balance sheet.
So much of the current balloon in debt is Fed held. Interest paid to the Fed by our Treasury is essentially all returned to the Treasury. And if the US bonds that they hold are held into perpetuity, our taxpayers are barely involved. Aside from any induced inflation. And there is nothing to pay back or explode.
Allowing the entire world to crash is going to cause a lot of civil unrest. If it gets bad enough it will become almost like a war crime where hostages are held in a battle between the haves about who will feed the have-nots!
does hyperinflation lead to a crash and therefore civil unrest?
False dilemma. Let the bubble deflate slowly in a controlled way, it is not a choice between total collapse vs. continued destabilization. The only problem is political will.
you assume that's possible.
how's the post 2008 slow deflation working out?
That's fine and correct. But allowing the worldwide economy to collapse as would have happened this year without strong central bank and governmental interventions would have yielded far worse than a series of recessions.
You confuse recession with a collapse? You also imply that we can control or stop “it”. The truth is we can only delay the inevitable and by doing that it creates a further drop the will be incurred.
Our currency will become worthless the moment anyone questions or ability to repay our debt.
You confuse recession with a collapse? You also imply that we can control or stop “it”. The truth is we can only delay the inevitable and by doing that it creates a further drop the will be incurred.
Our currency will become worthless the moment anyone questions or ability to repay our debt.
It has to go at least one step farther than merely questioning our ability to repay.
Of course the USD can inflate, but it never becomes worthless as you suggest because our federal gov't can repay any debt of any size as long the debt is denominated in USD's.
You confuse recession with a collapse? You also imply that we can control or stop “it”. The truth is we can only delay the inevitable and by doing that it creates a further drop the will be incurred.
Our currency will become worthless the moment anyone questions or ability to repay our debt.
I know the difference between a recession and collapse.
"We" seem to be better able over time to manage what would have been utter blowouts in the past.
A lot of people parrot your third sentence. I disagree.
Your last sentence is nonsense. People have been questioning our debt for decades.
Having enough savings to survive the Pandemic and support yourself, family and business is easy for the rich. But the poor and broad middle class, along with many smaller businesses of all sorts everywhere will not be able to.
In fact, the only beneficiaries of a hard crash are the mega-rich. Even if the stock market lost 95% of its value, Jeff Bezos would still have more money lost in his couch cushions than you or I will ever possess. And he and his fellow formerly-mega-rich-but-now-merely-rich colleagues can go and use that money to buy up hard assets like land at fire-sale prices from sellers desperate for money.
In a real crash, the rich get richer, the middle class becomes poor, and the poor become dead. I'm not sure that's the sort of outcome the OP is wishing for, but that is what true economic collapses produce.
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