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Strategies & Market Trends : The coming US dollar crisis
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To: axial who wrote (20938)6/23/2009 1:54:53 PM
From: GST2 Recommendations  Read Replies (1) of 71456
 
en.wikipedia.org

Australia has not experienced deflation, so it makes zero logical sense to talk about Australia as anything but a country with a weak currency whose fate is tied to commodity prices, as a rise in commodity prices will help them to improve their current account.

Now, if you want to talk about inflation in the USA (although it is never entirely clear what you are discussing), spare me the specious comparisons between Japan and the US.

Japan has no net debt. Get it? No, it seems you do not.

We have a net debt large enough to swallow the world in a gulp. Get it? No. it seems you do not.

It is our net debt that is destroying the value of our currency. We are defaulting because we have no choice but to default. The challenge we face is to try to persuade the world that we are not defaulting, even as we default. Our debts can no longer be financed with 'money' -- that is the opening act of default. A fiat currency makes it relatively easy to default a day at a time rather than all at once. That is the heart and soul of our inflationary destiny.

While I am at it, I have never suggested that the US economy will not survive -- it will. It could even do well over a ten or twenty year time frame. But along the way there will be hell to pay -- and in hell the dollar in your pocket won't buy much.
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