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Old 07-15-2008, 02:09 PM
 
Location: Alaska
5,356 posts, read 16,719,765 times
Reputation: 4045

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Quote:
Originally Posted by sterlinggirl View Post
Why would the government pay interest to borrow dollars that it can just print?
Because the value of the money wouldn't be worth the paper it's printed on.
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Old 07-15-2008, 02:10 PM
 
Location: Ohio
21,270 posts, read 15,055,899 times
Reputation: 17677
Quote:
Originally Posted by mackinac81 View Post
So what you're saying is that the U.S. is slowly losing their sovereignty because of our inabilitiy to live within our means? That's scary. The sad thing is that nobody seems to notice this.
That is not what it means. A foreign company might buy any US company for any reason or no reason at all, with or without a national debt.

The reason one company buys another is to make a profit, expand its operations, eliminate a competitor, add to its repertoire of goods and services offered, or increase its control (by buying a supplier as an example).

A company does not buy a foreign company based on national debt, or trade deficit, or budget deficit.
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Old 07-15-2008, 04:23 PM
 
3,460 posts, read 5,069,002 times
Reputation: 6677
Quote:
Originally Posted by akck View Post
Because the value of the money wouldn't be worth the paper it's printed on.
Isn't the same thing happening now? Basically all of my nonfixed expenses have gone up about 50% or more in the last few years.
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Old 07-15-2008, 05:13 PM
 
Location: Ohio
21,270 posts, read 15,055,899 times
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Quote:
Originally Posted by sterlinggirl View Post
Isn't the same thing happening now? Basically all of my nonfixed expenses have gone up about 50% or more in the last few years.
That's because of Cost Inflation, not because of Currency Inflation, Wage Inflation or Fiscal/Monetary Inflation.

When commodities like wheat, corn or rice are in short supply but demand remains high, prices rise. Manufacturers and retailers have to pass those costs onto you. Those price increases serve to restore the profit margins of the manufacturers and retailers, not increase them, and as a result, wages become stagnant, eroding your disposable income.

That has no bearing on the currency or its value.

You might have seen photos from post-WW I Germany showing a guy with a wheelbarrow full of marks heading off to buy a loaf of bread that cost 201,000,000,000 German Marks.

While people marvel, no one stops to ask how the guy got 201,000,000,000 Marks. Well, he was probably getting paid 800,000,000,000 Marks per day.

And that's the point. When Currency Inflation exists, your wages keep pace with prices. If prices are rising and your wages are not, then you're looking at Cost Inflation, not Currency Inflation.
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Old 07-15-2008, 05:17 PM
 
Location: southern california
57,837 posts, read 76,796,090 times
Reputation: 51164
deadbeat itus is catching on fast. the nation is only a collective conscious.
we need to get back on the moral high ground. you need to pay for when you play.
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Old 07-15-2008, 05:32 PM
 
3,460 posts, read 5,069,002 times
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Quote:
Originally Posted by Mircea View Post
That's because of Cost Inflation, not because of Currency Inflation, Wage Inflation or Fiscal/Monetary Inflation.

When commodities like wheat, corn or rice are in short supply but demand remains high, prices rise. Manufacturers and retailers have to pass those costs onto you. Those price increases serve to restore the profit margins of the manufacturers and retailers, not increase them, and as a result, wages become stagnant, eroding your disposable income.

That has no bearing on the currency or its value.

Last time I checked, fence posts weren't in short supply. Yet they went from $4 to $6 in a year. Have you checked the price of tires lately? Its a thousand dollars to buy good tires for a contractors pickup.

Countries and individuals are dumping their dollars to buy commodities.....which inflates currency circulation.....which means more dollars chasing a fixed amount of commodities....which increases the price of commodities.....which encourages people to dump dollars to buy commodities....

The cost inflation you're seeing is a result, not a cause.
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Old 07-15-2008, 08:44 PM
 
48,509 posts, read 86,101,401 times
Reputation: 18105
Because foreing ers hold most of the treasury notes and if they loose confidence in its value they can call them in.Ask the governament to pay them real money. As it is we are paying more and more interest to them to borrow the money.
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Old 07-15-2008, 09:09 PM
 
3,460 posts, read 5,069,002 times
Reputation: 6677
Quote:
Because foreing ers hold most of the treasury notes and if they loose confidence in its value they can call them in.Ask the governament to pay them real money.
It only promises to pay dollars. There isn't a promise to give them anything of value.

So fire up the presses and give them dollars. I'd rather have a one time hit with some major inflation to clear out the excess than a lifetime of 50% taxes for our next generation. Since everything is pretty well shot to hell in the economy anyway, this would be one of the better times to do it.
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Old 07-15-2008, 10:12 PM
 
Location: San Diego California
6,797 posts, read 6,478,185 times
Reputation: 5180
Debt is a tool, used right it is constructive, used wrong it is destructive. When you begin to use debt for consumption, you are definatly heading off a cliff. As a country and a people we have been doing just that. We have neglected constructive investment in infrastructure, while financing luxuries and lifestyles we cannot afford. If we understand where we have gone wrong and corrrect it we will survive as a great country, if we contiue on the path we are on, we will not.
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Old 07-15-2008, 10:35 PM
 
3,460 posts, read 5,069,002 times
Reputation: 6677
Quote:
if we contiue on the path we are on, we will not.
You said it better than I could. I'd give you some more rep points if CD would let me.
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