patrick.net

I saw this article in Bloomberg Businessweek magazine. It's title read something along the lines "Would you invest into a company that lost $2 trillion last year and is $44 trillion in debt?" followed by small font of "Yes we all know it's a country, not a company".

I said it in the past and I’m saying it now, politicians do not have the will power to make the necessary sacrifices to save this Country. Hyperinflation is pretty much the only way this thing is going to end

Um, the fact that we're BORROWING dollars from people who can LEND them should tell you there's no inflation going on.

Weimar Germany hyperinflated because they were simply PRINTING papiermarks to pay STRIKING workers who were no longer working because French armies had seized the Ruhr.

What we're doing now is just trying to stay one step ahead of the bear.

The Federal deficit is going to be $1.6T this year.

$965B of that is defense sector, $600B more than 2001.

Health care was $400B, now it's $900B.

If we want to spend big we have to tax big. I fail to see why people are avoiding this. Nation of morons I guess.

Can't cut spending or the economy will crash.

Can't raise taxes or the economy will crash.

Thanks, Ralph.

http://research.stlouisfed.org/fred2/series/MZM

Inflation can not fix a deficit problem. It can only fis a debt problem. We must restructure government for long term sustains sustains before we inflate away the current debt.

We need a tax base guaranteed not to fall rapidly out of line with GDP, and a spending policy guaranteed not to outpace inflation or an aging population.

This means eliminating the concept of mandatory spending, by tying social security payouts to tax receipts rather than fixed incime, cutting defense spending back go actual defense requirements, and completely overhauling the medical system so that costs are cut dramatically and then only grow based on inflation and actual life improvement

My generation may be the last chance we get to fix this mess. If we fail, then the most likely outcome will be the united states of my children's generation looking a lot like a late nineties Russia. Not the worst place in the world, but bad enough that you'd rather be an immigrant worker in s foreign country than try to make it at home.

It's possible it will end in hyperinflation, but that's still many years off.

Hyperinflation doesn't happen suddenly, except in countries that have large debts in a foreign currency and there is a capital flight. Does not apply at all in the US.

If/when there is hyperinflation in the US there will be high inflation first for several years, like in Wiemar Germany. Again: does not apply in the US currently.

Troy says

http://research.stlouisfed.org/fred2/series/MZM

Yeah, and M3 has been *shrinking* for over a year. Hyperinflationistas used to love to post MZM and M3 charts. Not so much any more.

Will never apply in the us because we do not owe our debts in gold like Germany did. Hyperinflation happens when ordinary inflation has no impact on your debt standing because you owe your debts in something that you can't print

Kevin says

Will never apply in the us because we do not owe our debts in gold like Germany did. Hyperinflation happens when ordinary inflation has no impact on your debt standing because you owe your debts in something that you can’t print

er what? What will end up happening is no one will lend the government anymore money to finance there budget. The government will resort to printing more money to pay there bills. With more dollars in circulation, the exchange rate will be higher with other countries, thus it will take 2 dollars to equal 1 euro (currently exchange rate is $1.39 = 1 Euro), oil will be priced in euros, so a barrel of oil costing $139, it will up to $200 and continue to increase in price as there are more dollars chasing the same amount of goods. As oil and other imported goods increase in price, fewer people will be able to afford buying them. At some point minimum wages will have to be increased to allow people to afford basic necessaries, other wages will follow suit. There is currently 3.3 trillion dollars in the world today, weather it through printing, or electronic increases in the dollars supply, I say were looking at 30% inflation and increasing from there (figure there a 1 trillion dollar shortfall this year, it's only going to get worse from there). Once the inflation ball gets rolling, pretty much nothing is going to stop it until currency is reissued from the old dollar into the new dollar and public confidence in money is restored.