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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (28456)	3/11/2005 8:02:19 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

You're right in saying, the easier it is to obtain money through credit the less valuable the money. When discussing a situation where "the Fed gives the government $2 trillion and the debt is gone", I think it is best to call this by its true name - a Monetarist Tax. The baffle-flab of the Reagan "supply-siders" amounted to nothing more than this - replace Income Tax with an equal amount of Monetary Tax while at the same time growing the size of the government at an extra-rapid pace, but that's a different kettle of fish. I'm sure you agree that new debt, which is not borrowed from someone's savings, is simply a monetary tax, not a miraculous new efficiency. home.pacbell.net .

To: LLCF who wrote (28456)	3/13/2005 12:54:56 PM
From: benwood	Read Replies (1) \| Respond to of 110194

DAK, my debt is only easier for me to pay back if I get my hands on more dollars, regardless of how worthless the dollar has become relative to other currencies. That only makes it easy for a foreigner to buy my house. You are assuming that a declining currency is accompanied by an equal wage inflation. It may, as in your Germany example, or it may not. This is the exact reverse of all those years of our appreciating clownbuck -- we could travel more and more easily abroad, but that didn't help the locals at all. In reality, it generally made it worse for them because their import bills went up. We'd suffer the same fate, at least from the 1/2 the world that's unpegged, and so we'd need some wage inflation just to keep up with buying the stuff to live. There may or may not be a surplus that makes it easier to retire the old debt.