Thanks for your comments.
Your position is not that difficult to understand, just a bit implausible:
"Creditors of American consumers and businesses will not be repaid with cheaper Dollars. They will mostly not be repaid at all! Stop and think. U.S. banks are but a small part of this picture. Creditors around the world hold this debt. Debt which is being liquidated through foreclosure and bankruptcy. What part of this is difficult to understand?"
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Are you stating that the US Govt will default 100% on its debt, or just the US consumer and business debt will be defaulted upon? The US Govt/Fed have been and are buying up this MBS debt and other near worthless assets.
And what about the EU PIGS (Portugal, Italy, Greece, and Spain), not to mention Latvia and Eastern Europe, do all these business and consumer loans default as well...? I am sure you do not ignore other countries debt to GDP ratios that are similar or worse than US...?
So is your position one of a worldwide repudiation of consumer and business debt? And of government sovereign debt as well? Maybe you could provide me with a few links of articles that discuss such a worldwide repudiation of debt.
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Seems more plausible to me that the world economy goes through a series of rolling devaluations country by country, similar to the Great Depression. To wit:
"History is testament currency devaluation proved effective in ending the Great Depression. In 1930, Australia was the first to leave the gold standard, immediately devaluing the Aussie by more than 40%, and the economy quickly recovered. New Zealand and Japan followed suit in 1931, each with the same result. By 1933, at least nine major economies had enacted a devaluation of their currency by removing it from the gold standard, all of whom emerged from depression. In 1934, America realized a dollar devaluation of 41% when the price of gold was adjusted... only the French and Italians continued to adhere to the gold standard, and their economies remained depressed until finally, in 1936, they allowed their currencies to devalue".
Would appreciate your posting a few links to articles that discuss such a worldwide repudiation of debt.
Thanks. |
