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"We cannot have hyperinflation in this country because we are America and bad things cannot happen here. Hyperinflation hasn't happened yet, so it probably won't happen." - Liberals
No, that's a false narrative. What liberal economists have been saying is that the prediction of conservatives that increasing the money base would cause inflation in the short run have been wrong for five years.
..., the prediction that increasing the money base and big government deficits will be neither inflationary nor cause high interest rates, if the economy is in a liquidity trap, is a fundamental reaffirmation of Keynesian models -- and that's what actually happened.
It's not that inflation will never arise. It's just that in the particular case of the liquidity trap, as we are in now, neither increasing the money base nor increasing fiscal government spending is inflationary; drives up interest rates or devalues the currency.
Once again, the problem today is unemployment and lower GDP than potential GDP and we shouldn't be worrying about possible phantom inflation, some time in the future that has long been predicted but hasn't materialized, when we have today's problems to deal with.
Hasn't Paul been saying essentially the same thing for a quarter century?
Pretty much Dude, he's kind of like either a parrot that nobody wants because it says the same thing over and over {polly want a cracker? polly want a cracker?}, or a record on a old Seeburg Juke Box that's stuck and needs a kick or a bump.
Hey, is this the same Paul that's been running for president for 50 years?
Quote:
Originally Posted by MTAtech
No, that's a false narrative. What liberal economists have been saying is that the prediction of conservatives that increasing the money base would cause inflation in the short run have been wrong for five years.
It's not that inflation will never arise. It's just that in the particular case of the liquidity trap, as we are in now, neither increasing the money base nor increasing fiscal government spending is inflationary; drives up interest rates or devalues the currency.
Once again, the problem today is unemployment and lower GDP than potential GDP and we shouldn't be worrying about possible phantom inflation, some time in the future that has long been predicted but hasn't materialized, when we have today's problems to deal with.
Isn't that exactly what conservatives? said about national defense during the 2008 presidential campaign too? That dems were weak on national defense and homeland security?
Location: By the sea, by the sea, by the beautiful sea
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Quote:
Originally Posted by VTHokieFan
"We cannot have hyperinflation in this country because we are America and bad things cannot happen here. Hyperinflation hasn't happened yet, so it probably won't happen." - Liberals
"We just couldn't be happy unless we're afraid of something"______conservatives
The lot of you don't seem to understand that while your FR is increasing its balance sheets (to $4 trillion by mid-2015) BRIC and Japan are essentially doing what they can to abandon the dollar as the world's reserve currency.
You might ask why that matters... It matters because inflation is based on supply and demand and the ability of the governors to predict when and how much to adjust interest rates. Since the FR announced not too long ago that they'd be using the metric of the UE rate to judge when to raise interest rates (abandoning the long held 2 - 3% target interest rate) you might want think about that when you think about high-fiving because your inflation rate is not what those on the right have predicted.
This is economics, not a text message. You think in the long term, not the next 30 seconds. Just as soon as you can explain how the FR is going to dump $4 trillion plus when your economy finally turns around just as the dollar officially enters global basket currency on the world market you'll be able to tell everyone just how wrong you were...
But that's not text message so remember that when you make claims that you're in great shape right up to the point where you're not in great shape.
[quote=BigJon3475;28057195]The lot of you don't seem to understand that while your FR is increasing its balance sheets (to $4 trillion by mid-2015) BRIC and Japan are essentially doing what they can to abandon the dollar as the world's reserve currency.
[quote]
For some reason other countries conducting trade in other currencies does not seem to register with some people. It sure does with our gvt see Libya and Iraq, the first thing that takes place after their defeat is they are back to trading in USD. Hmmm wonder why? Another point that is ignored is other countries stock piling of gold especially China, I think Germany just bought a load recently too.
The lot of you don't seem to understand that while your FR is increasing its balance sheets (to $4 trillion by mid-2015) BRIC and Japan are essentially doing what they can to abandon the dollar as the world's reserve currency.
You might ask why that matters... It matters because inflation is based on supply and demand and the ability of the governors to predict when and how much to adjust interest rates. Since the FR announced not too long ago that they'd be using the metric of the UE rate to judge when to raise interest rates (abandoning the long held 2 - 3% target interest rate) you might want think about that when you think about high-fiving because your inflation rate is not what those on the right have predicted.
This is economics, not a text message. You think in the long term, not the next 30 seconds. Just as soon as you can explain how the FR is going to dump $4 trillion plus when your economy finally turns around just as the dollar officially enters global basket currency on the world market you'll be able to tell everyone just how wrong you were...
But that's not text message so remember that when you make claims that you're in great shape right up to the point where you're not in great shape.
The reality is that U.S. ten-year Treasuries are 2%. That's around the inflation rate. So, investors are willing to lend the U.S. money at a real interest rate of zero.
When the Fed needs to float more debt it will do so at the prevailing rates, which won't be higher until the economy improves. When the economy improves, the government will have more revenue due to lower unemployment. That will reduce the amount of debt floated.
What you also should realize that old debt, issued 10, 20 and 30 years ago, are coming due. That debt, at 5-10% interest rates are being re-issued at 2.04-3.21% rates. That saves interest payments.
All in all, a recovering economy is good, not bad, as it will make the U.S. financial system far more sustainable. Now, I suspect interest on the debt will double by 2017 but with a growing GDP the debt to GDP ratio will fall.
With this much fiat floating around we will continue to see a major spike in goods and services.
barry is making great strides in his quest to turn America into a 3rd world cesspool.
If you don't have a gun you better consider getting one or you will become a victim!
From the man who should have been President, Ron Paul.
I have frequently made a point about the importance of 8-15-71, the day Nixon closed the gold window and severed the last weak link to the gold standard. Many charts on money supply, debt, size of government, current account deficits, price inflation, and financial bubbles, etc. dramatically demontrate the significance of this date. It's also related to war and loss of civil liberties. The attachment, showing just the supply growth of paper currency is frequently ignored but will be significant with runaway inflation. Take a look and prepare for the R3VOLution. REP
With this fiat currency worth apx 4 cents to the buck there really isn't any point being very upset is there?
I have noticed many items and products up since just mid December. percents around 600% for bronze round stick and more for alloy sheet.
Where I work we deal with these metals and many others, all costing us much more than in the past, but this rise started years ago.
It is to the point larger industry is not building production machine like they did, and when they build one, they just send it to China.
I just don't know what the govt will feed as pablum to the masses, but they better have a good plan for that, because when the piggy bank goes dry there will be that little problem....
How to care and feed for 51% of the slackers.......
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