patrick.net

this guy forgets one important thing. US government budget cannot survive a strong USD. The deflationary will give the government extremely small tax receipt while it has to increase its expenditure several times to prevent a social meltdown from lack of jobs, and there will be no foreigners who can afford to buy our Treasury, because the Chinese and Japanese will have no dumb Americans to sell to, and they cannot print USD.

Um, we survived a strong currency in the past, did we not? We were even a creditor nation, in fact!

A strong USD will spur both demand for U.S. treasuries and assets, as global investors look for a safe place to park their dollars. It will also create new demand for our #1 export, paper currency.

I admit it will make our debt more expensive, but I see this as a good thing. More of an incentive to pay it off rather than add to it.

Like it not that seems to be where we are going. Too much credit produces phony wealth that is not sustainable. That is what we are seeing right now, the collapse of this phony inflated wealth to real levels.

No debt?

Imagine: No savings. Banks just store cash for you. Pay no interest.

"What if we all just rented until we could pay cash?"

Patrick, you are missing something fundamental: How could 1/2 the population save to pay for a house with cash? There isn't enough cash in existence for everybody to save until they can pay with cash Not unless we want to have homes that cost no more than a few months labor. The only way this savings can happen is if the money is multiplied though lending, and redeposits. You know.... borrowing and lending in a fractional reserve system.