CountryBoy
Market Veteran
- Reaction score
- 48
Something bad is coming, just pick your poison. :worried:
Worse than a Depression
Argument for Deflation
Servicing existing debt is impossible because income levels are not high enough to do so. The economy cannot grow large enough fast enough to offset this problem. Debt will be liquidated by default/forgiveness.
Government has been unwilling to accept a downturn, adding more debt in hopes of generating a miracle that cannot arrive. The danger, as expressed by Financial Armageddon, is that the presumed "untils" do not happen:
But what happens if all those "untils" turn out to be wide of the mark? What if the carnage we've experienced so far is structural, not cyclical? If that's the case, then Americans are going to find that instead of experiencing better times ahead, they are going to be much worse off than they were -- or are.
How We Get Inflation
Our government is bankrupt many times over (see Spiraling to Bankruptcy), as are the democratic socialist states of Europe (see Welfare States - R. I. P.). For political reasons, none of these countries is either willing to cut back on its spending or accept a recession. Mish provided a description of both the U.S. and Europe (my emphasis):
For Europe, $1 trillion is not enough, nor would $10 trillion. There is no plan that can possibly work. But that will not stop politicians from trying. Politicians do not care about math or logic, or the fact that piling on more debt cannot possibly be the cure for a problem of too much debt with no possible way to pay it back.
We are witnessing the death of democratic socialism. No politician wants it to happen, but none can prevent it. We are at the point where the Ponzi concept of "extend and pretend" has been extended beyond social commitments and banking systems to entire economies. We are approaching what Ludwig von Mises described as "the crack-up boom":
Political cowards around the world have chosen Mises' second outcome -- "a total catastrophe of the currency system involved."
None of the countries have the resources to continue to fund current programs. As their economies deteriorate, they will "print money" in order to continue meeting obligations and stimulating. At some point, the money supply will explode vis-à-vis the goods available.
We have seen many "impossibles" in the last couple of years. Be prepared for the next -- a hyperinflationary depression. It is not impossible, it is not an oxymoron, and it should surprise no thinking economist. It is nearly upon us.
Your lifestyle will depend on how prepared you are to meet this newest, biggest, and most horrific Black Swan. This beast will destroy economies, overthrow some governments, and alter the nature of the world.
Wake up, people! Your politicians have no intention of heading this off.
http://www.americanthinker.com/2010/06/worse_than_a_depression.html
Worse than a Depression
Argument for Deflation
Servicing existing debt is impossible because income levels are not high enough to do so. The economy cannot grow large enough fast enough to offset this problem. Debt will be liquidated by default/forgiveness.
Government has been unwilling to accept a downturn, adding more debt in hopes of generating a miracle that cannot arrive. The danger, as expressed by Financial Armageddon, is that the presumed "untils" do not happen:
But what happens if all those "untils" turn out to be wide of the mark? What if the carnage we've experienced so far is structural, not cyclical? If that's the case, then Americans are going to find that instead of experiencing better times ahead, they are going to be much worse off than they were -- or are.
How We Get Inflation
Our government is bankrupt many times over (see Spiraling to Bankruptcy), as are the democratic socialist states of Europe (see Welfare States - R. I. P.). For political reasons, none of these countries is either willing to cut back on its spending or accept a recession. Mish provided a description of both the U.S. and Europe (my emphasis):
For Europe, $1 trillion is not enough, nor would $10 trillion. There is no plan that can possibly work. But that will not stop politicians from trying. Politicians do not care about math or logic, or the fact that piling on more debt cannot possibly be the cure for a problem of too much debt with no possible way to pay it back.
We are witnessing the death of democratic socialism. No politician wants it to happen, but none can prevent it. We are at the point where the Ponzi concept of "extend and pretend" has been extended beyond social commitments and banking systems to entire economies. We are approaching what Ludwig von Mises described as "the crack-up boom":
Political cowards around the world have chosen Mises' second outcome -- "a total catastrophe of the currency system involved."
None of the countries have the resources to continue to fund current programs. As their economies deteriorate, they will "print money" in order to continue meeting obligations and stimulating. At some point, the money supply will explode vis-à-vis the goods available.
We have seen many "impossibles" in the last couple of years. Be prepared for the next -- a hyperinflationary depression. It is not impossible, it is not an oxymoron, and it should surprise no thinking economist. It is nearly upon us.
Your lifestyle will depend on how prepared you are to meet this newest, biggest, and most horrific Black Swan. This beast will destroy economies, overthrow some governments, and alter the nature of the world.
Wake up, people! Your politicians have no intention of heading this off.
http://www.americanthinker.com/2010/06/worse_than_a_depression.html
