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The ramifications of hyperinflating ones currency to make war reparations vs making programs like SS solvent, or other federal spending is one of the same..
No it is not.
Money debasement will continue to happen in any successful modern sovereign nation. But it is low and slow and controlled.
Weimar is the result of a failed state. And without any 'faith and trust', there is no money. Suddenly.
Weimar hyperinflation was precipitated by a failed state, failed industry, failed Gov't and then currency. It was a symptom of failure, not a result from money debasement primarily.
The US could go hyper too. But it would require an ongoing and huge physical disaster that ruined our national productivity, people and/or Gov't. i.e. loss of a war, loss of industrial capacity, and having to pay war reparations in gold and/or foreign currency. As in Weimar.
The United States has had a significant loss of industry. We have an almost insurmountable debt. Servicing that debt will become increasingly difficult in addition to our social programs. A government that continues to print money ad infinitum will suffer the same fate as past governments that failed to pay attention to history. The amazing thing is the people who always assume that this time will be different.
The United States has had a significant loss of industry. We have an almost insurmountable debt. Servicing that debt will become increasingly difficult in addition to our social programs. A government that continues to print money ad infinitum will suffer the same fate as past governments that failed to pay attention to history. The amazing thing is the people who always assume that this time will be different.
Eh, in part, sure, but the US gov wouldn't be able to issue us $100K checks from newly printed money and let us retire at 30. Well, they could, but the dollar value would drop. I hold most of my money is dollars, some Euros, and a few AUD, but none in rubles because I have concern over inflation.
Currency inflation is curtailed by interest rates.
Quote:
Originally Posted by pghquest
Yes it was..
if you dont want to be called out on your stupid theories that keep moving the goal post, then stop creating stupid threads to discuss them.
I haven't moved the goalpost at all. It just sounds like you're being irrationally angry.
You specifically talked about exchanging $1 between you and I. That $1 is wealth in the private sector. A transaction between the two of us is just money changing hands. It still represents $1 worth of debt.
Quote:
Originally Posted by pghquest
Hey Opin.. if the federal government cant go bankrupt, what do you think would happen if the Federal Reserve raises interest rates to say..
50%
How would we pay the $10 TRILLION a year in interest alone?
The Federal Raising interest rates has no effect on the government's ability to issue currency. Perhaps you are confusing why the Fed sets the interest rates... it does so out of a response to inflationary pressure, or as a means to stimulate lending, not just for laughs.
It's beein going on for decades. We have been a "ticking time bomb" for decades. Today, at least 99% of Americans are still ignorant (whether or not the choose to be) to the meaning of public debt and its implications.
Let's clear the air:.
1) The United States is monetarily sovereign.
Sovereign adj. holding supreme power to govern
Canada, Japan, Australia, the UK... they are also monetarily sovereign.
The U.S. makes all rules regarding the U.S. dollar. No other country or individual has any effect on the U.S.'s ability to issue or make laws regarding U.S. dollars. China does not control U.S. dollars. Investors do not control U.S. dollars.
Even if the United States had $1,000 trillion in debt, it would have no bearing on the ability to issue U.S. dollars. This is an undisputed fact.
2) Households, businesses, cities, and states are NOT monetarily sovereign. This also includes Eurozone countries. You have to borrow money. You don't have the authority to issue U.S. dollars. You can only spend what you can earn and borrow.
3) The United States become divorced from gold in 1971. Therefore, all U.S. dollars are not "backed" by gold. They are backed by "full faith and credit."
4) The only constraint to the U.S. government's spending ability is runaway inflation. This includes inflation that cannot be cured through raising interest rates. Since 1971, there has been no link between "printing money" (i.e. spending) and inflation. Inflation is closely correlated to oil & energy prices.
5) The United States cannot default unless it chooses to. No authority can "force" the United States into default.
6) All U.S. government agencies are funded by the government, therefore cannot be insolvent. Social Security cannot be insolvent. Taxation does not fund government services.
7) The United States creates currency by spending money. The federal deficit is the amount of currency created (spending) minus the amount of currency destroyed (taxing). This process is done through the banks. We have run deficits almost every year for over 200 years.
8) National "debt" is the running count of Federal deficits. It is an accounting notation. It isn't a mortgage or a credit card.
Takeaways:
The following formulas can be verified at your discretion (do the research):
Stop the fearmongering! The "debt bomb" is rhetoric used for manipulation.
Tot cut and paste BS - it's a mortgage on the future freedoms and future human capital of future generations. Many people today are less free due to oppressive taxes levied to satisfy servicing a debt which allows a solid 50% of the country to live a higher standard of living than almost 80% of the rest of the world at the expense of others.
The government has no recourse but to tighten its power over the masses in order to perpetuate the system. The banks sit back and skim off the top. You guys are so blinded by ideology you don't realize you've been hoodwinked.
If you think the fools at the helm will stop printing money before the crap hits the fan you are more than optimistic.
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