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The fed's just gonna have to print...and print...and print. hyperinflation here we come.
by stuffthatmatter 17y ago
The fed's just gonna have to print...and print...and print. hyperinflation here we come.
- ars 17y agoLet's not exaggerate. Inflation? Probably. Hyperinflation? No.
- sengan 17y agoGermany just reported its first DEFLATION in 22 years... Almost like we're sitting the top of an unstable equilibrium that is only getting taller.
- stuffthatmatter 17y agoYup...Germany has savings, while we have a negative savings rate (think it was -5% in 2008....might be better now)
- scotch_drinker 17y agoThe US Savings Rate briefly fell into negative territory in Q2/Q3 of 2005. It has been positive in all other quarters. In 2008 it was well above 2%. People quote the low US savings rate like it's a doomsday scenario but in reality, it's a rational decision when your interest rates have been below 5% for a decade or more. Saving money when you make 1% on it is actually losing money due to inflation. Why the Germans save as much as they do with such a low interest rate is a topic for another discussion. http://www.bea.gov/briefrm/saving.htm http://www.bea.gov/briefrm/saving.htm
- stuffthatmatter 17y agohyperinflation has to do with a loss of faith in the currency. Foreign debt holders know that this America empire is sailing into sunset, and has no way to pay its trillions of dollars back. They'll all dump it one night, causing the dollar to drop 30-40%
- gasull 17y agothis America empire is sailing into sunset, and has no way to pay its trillions of dollars back. The US will be able to pay the trillions of dollars back. How? Just printing more dollars and using them to pay. The problem for the investors is that those dollars might not be worth it too much. But this will be in many years. Right now US creditors don't want to dump the dollar because it would decrease the value of what they hold.
- stuffthatmatter 17y agoRegarding the currency crash, actually you just need one country (i.e Russia) or a hedge fund dumping a large amount of dollars, forcing others to dump theirs as well in a speedy fashion (kinda like everybody rushing toward the fire exit when someone triggered an alarm)
- anigbrowl 17y agoEven if this happened (which I very much doubt it will because Japan, China etc. don't want to write off 40% of their holdings or get into a vicious economic war with the US), that's a long way from hyperinflation and general fiscal Armageddon. US business would love the dollar to fall by 30%, our exports would soar and those companies that depend heavily on manufacturing in China could probably use other hard currency like the Euro. It would crimp our military operations overseas, but when you get down to it a lot of countries still want to be under the American nuclear umbrella and we paid for the nukes a long time ago.
- stuffthatmatter 17y agoTrue....to a degree. Our agriculture exports would soar. But alot of other things we produce are complex/advanced products, which depends on cheap parts/oil from....other countries. As for the military, well, China will pick a good time to crash the dollar (when they've liquidated most of their dollar reserves). Then they'll be able to bring US to its knees without firing a single bullet. Why shouldn't they? it's their turn to be the empire.